My Insurance Policy

Since we gone through some of the basics of insurance policy terms and definitions, perhaps its best if we start getting a bit more specific, a little closer to the pocketbook…I mean home.  Let’s talk about automobile insurance.

This multi-part series will briefly explain some of the various coverages that can or may be included in an auto insurance policy.  This will bring additional understanding to the enigma that is automobile insurance.

Liability Coverage

First, let me just suggest that your in most cases insurance coverage follows the vehicle and not neccessarily the driver.  Thus, if someone else is driving your vehicle and is involved in an accident - it is your coverage that will have to pay out the damages.  During these explainations, we will not complicate the information with extenuating considerations, such as ’secondary coverage’ or ‘no-fault coverage.’

The liability portion of your auto insurance policy covers damages for which you are directly, and in some instances indirectly, involved in causing to another party. 

–> Bodily Injury
Medical injuries that your vehicle causes which are sustained by another driver, their passengers, or pedestrians.  You can be held liable for indirect damage if the accident causes the other driver to additionally injury other persons (i.e., multi-car collision injures other drivers in various vehicles involved).

–> Property Damage
Physical damages that your vehicle causes which are sustained by another vehicle, building, and possibly a privately or publicly-owned object (statue, fence, etc).  Again, you can be held liable for indirect damage if the accident causes the directly hit item to cause additional damages to other property (i.e., struck vehicle damages a house).