Typical Components Of An Auto Insurance Policy:
- Liability Coverage – Auto Liability coverage
- Uninsured/underinsured motorist coverage
- Medical Payment Coverage
- Personal Injury Protection (PIP), no-fault protection
- Comprehensive coverage
- Collision coverage
We are just going to discuss liability coverage, and uninsured/underinsured liability in this post.
Liability coverage – 3rd party insurance coverage. If you are deemed to be negligent in an auto accident and the other parties are injured. Your insurance will defend you and will pay out (if required) to the other party for their injuries.
Let’s say you carry Liability coverage of 100/300/50. Do you know how these coverages work? If you are sued due to an accident, these numbers represent in order; Payment Per Person (100k – or first number), Per Accident (300k per total payout, no matter how many people injured, insurance will not pay over this number), Property Damage ( 3rd number) Insurance will pay for any property damage caused by their insured up to the limit of liability . (in this scenario $50k). Think about if you are in a multi vehicle accident, is $50,000 enough?
Think of liability as protecting your assets – this is how it is sometimes explained. Imagine if you slide on ice, hit another vehicle that has 4 people in it, and they are all injured. If your insurance policy has $100,000/$300,000/$50,000, This may mean, the first person gets $100k, the second person gets $100K , the 3rd person gets $100k and the 4th person gets YOUR HOUSE! Now, not necessarily will that happen. However, if your ASSETS EXCEED $100,000 then you need to speak with an agent from NORTHEAST PROTECTION GROUP to discuss what coverage you need so this doesn’t happen to you and your family. We always say, “saving 15% on your car insurance if you do not have the CORRECT protection, could cost you a lot more in the long run. Are you willing to put your assets on the line?
Uninsured/Underinsured Liability coverage. This is the coverage that protects you (the named insured) and your passengers in the event that you are injured in a vehicle where the other party is deemed to be at fault.
Let’s say the other party let their insurance lapse due to non-payment. This would be UNINSURED, and if the insured did pay his insurance however his Uninsured/Underinsured liability coverage was $25,000/$50,000. You would then have a scenario of, the other party didn’t have insurance coverage at the time of the accident, therefore, there is no insurance money/protection to go after if you have extensive injuries. If the other party carried the minimum allowable in New York state of $25,000/$50,000. Then that would be the most you could get out of the other insurance provider. Unfortunately often this is when the injured party sues the at fault party PERSONALLY.
However, here at Northeast Protection Group, we ALWAYS recommend that you carry the same uninsured/underinsured coverage on your policy as you did for the liability coverage. Therefore, if you Bodily injury coverage is 100/300, then you would want the same on your Uninsured/Underinsured. This way if you are injured by an UNINSURED or UNDERINSURED party, you can fall back on your own policies coverage for your injuries.
There are a lot more “technicalities” and contractual verbiage that goes into these coverages, but this will at least give you a better understanding of what and why you are getting and paying for the insurance you have. As always, reach out to us for any questions, we would be happy to answer them.
