Your Auto Policy

What You Should Know About:

“The Big Five” Auto Insurance coverages that protect what you love

Liability insurance is required, but these optional coverages are essential, too.

Three things you should know:

  1. All states but one in the U.S. require drivers to have liability insurance (or a bond) to pay for injuries or damages to others if they cause a motor vehicle accident.
  2. Liability insurance doesn’t pay for YOUR damages, like when you hit a guard rail or deer, or if your car is damaged by a hit-and-run driver or is stolen.
  3. Talk to your insurance company or agent about the coverage you need to protect yourself, your passengers and your investment in your vehicle before you get on the road!

The “Big Five” types of auto insurance coverage are:

  1. Mandatory Liability Coverage - Bodily Injury (BI) and Property Damage (PD) (BI) Provides coverage for injury or death claims made against you or any driver of your vehicle involved in an auto accident and the cost of legal defense. This protection pays up to the dollar limit you've purchased. (PD) Provides coverage for damage to the property of others caused by you or any driver of your vehicle. This coverage pays up to the dollar limit you've purchased and the cost of legal defense.
  2. Medical Payments/Personal Injury Protection (PIP) (optional) Pays for medical and hospital expenses and the expense of funeral services for all persons injured in your vehicle, regardless of who is at fault for the accident. This coverage pays up to the dollar limit you've purchased.
  3. Uninsured/Underinsured Motorists- BI and PD (optional) Provides insured drivers and passengers with payment for bodily injuries or vehicle damage, up to the policy limits, for those involved in an accident caused by the owner or operator of an uninsured vehicle, a "hit-and-run" driver, or when the at-fault driver's policy limits are insufficient to cover your injuries or damages. Learn more about UIM Coverage.
  4. Collision (optional) Collision coverage pays for damages to your car from an accident, regardless of fault.  It is available with a deductible you choose, meaning that when you file a claim, you the insured pay a specified amount before the insurance company pays for the remaining damages up to the current value of your vehicle.  The higher the deductible you choose, the less you’ll pay for this optional coverage.
  5. Comprehensive, or “Other Than Collision” (optional) Comprehensive coverage pays for vehicle damages other than those caused by a collision, overturn, depreciation and normal wear and tear.  Examples of what is covered include: auto theft, fire, hail, windstorm, flooding and glass breakage. Covered perils are listed in your policy. Be sure to review exclusions. This coverage is also available with a deductible.

BONUS FIVE: Here are the five basic “parts” of an insurance policy

  1. Declarations Page This part of a standard auto policy is what makes it specific to you. It includes such information as name and address, make and model of the automobile, vehicle identification number (VIN), policy period, policy number, other drivers covered, types of coverage purchased, policy limits and deductibles, premium and additional forms or endorsements. Understanding your policy and coverage starts here.
  2. Coverage Provisions This part of your policy details the types of coverage purchased.  These types of coverage parts usually include: Liability, Medical Payments (also called “Personal Injury Protection,” or PIP), Uninsured/Underinsured Motorist, Collision and Comprehensive (also called “Other Than Collision”).
  3. Exclusions This part states what is not covered by the policy.  This is a very important part of the policy because it explains the policy's limitations. If you’re willing to pay a bit more, you may be able to add coverage for some exclusions by purchasing endorsements for an additional premium.
  4. Conditions This part outlines the duties and responsibilities of both the insurance company and the policyholder.  It includes premium payment obligations, steps you must take in filing a claim, and disagreement resolution and policy cancellation notice procedures.
  5. Definitions/General Provisions This part includes items such as definitions of terms and miscellaneous conditions regarding the rights of the policyholder and insurance company.