In order to protect your rights and your personal assets, every driver needs to understand his or her automobile insurance policy BEFORE being involved in an accident.
Bodily Injury and Liability Insurance: This term defines how much coverage the insurance agency will be liable for if you cause an accident occurs and someone is injured. Usually split into two numbers, the first covers the maximum they will pay for one person’s injuries and the second is the maximum they will pay for all injuries sustained in the accident.
Almost all states require a minimum level of bodily injury and liability coverage. Examples of such include:
- District of Columbia: $25,000/$50,000
- Maryland: $20,000/$40,000
- Virginia: $25,000/$50,000
Collision Insurance: This term defines how much an insurance company will pay for damage to your vehicle if it is damaged by another vehicle or fixed object (tree, stop sign).
Comprehensive Coverage Insurance: This term, sometimes called “fire and theft” coverage, covers all damages to your car that are not caused by a collision. For example, it may cover tornadoes, floods, fire, theft, hitting a deer, etc.
Car Rental: If your car is in the shop for more than a day, many insurers will pay a per diem for your rental car while you wait for repairs, if you have this coverage.
Full Glass Coverage: Full glass coverage eliminates any deductible payments for broken glass on the car. In most states there is no deductible for windshield damage (because it is illegal to drive with a broken windshield), but for all other window damage to the car, you will have to pay the deductible for comprehensive coverage. Full glass coverage is an extra feature that you can buy to eliminate the deductible payment.
Medical Benefits Coverage: Covers medical expenses that you and your passengers sustained during an accident, no matter who was at fault.
No Fault Insurance: No Fault insurance currently exists in 12 states and Puerto Rico. Essentially, "no fault" means that, if injured, you can recover certain damages from your own insurance company. However, you cannot sue the other party unless your injuries rise to a certain level. If you live in Florida, Michigan , New York, New Jersey, Hawaii, Kansas, Kentucky, Pennsylvania, Massachusetts, Minnesota, North Dakota, Utah, or Puerto Rico, be sure to ask you insurance agency about your state's laws.
Personal Injury Protection: Personal Injury Protection (PIP) covers medical and rehabilitation expenses, work loss, funeral, and other expenses incurred by you, your family, or passengers in your vehicle. PIP pays for those damages no matter who was at fault.
Uninsured or Underinsured Motorist Coverage: This coverage pays for your injuries in a crash where the other motorist either does not have insurance or does not have enough insurance to cover your damages. For instance, if the other driver has the minimum coverage in Virginia ($25,000) and your damages are $75,000, his insurance company will pay for the first $25,000 of your injuries and you may or may not be able to collect the remaining $50,000 from him. If, however, you have underinsured or motorist coverage, you can make a claim against your uninsured motorist coverage carrier for the remaining portion. This coverage often covers hit-and-run drivers as well.
Resources: Virginia Auto Insurance Requirements Virginia Auto Insurance Consumer Guide DC Auto Insurance Requirements Maryland Department of Motor Vehicle Maryland Auto Insurance Consumer Guide
