Understanding Auto Insurance

Understanding Auto Insurance

Auto insurance is actually made up of a number of different types of insurance coverage.  Let’s go over what each is called and how it protects you.

Auto Liability – Commercial auto liability covers your financial responsibility if you are at fault in an accident (work-related or personal) and people are injured or property is damaged. It also pays for attorney’s fees to defend you from accident-related lawsuits.

Auto Medical Payments – Pays for the injury-related expenses or medical bills you incur as a result of an auto accident, up to the limits on your policy. It’s not meant to replace your health insurance, but rather supplement you in the event some of your expenses may not be covered by your health insurance policy.

Uninsured Motorists Liability (UM) – Provides bodily injury protection for the driver and passengers if a driver of another vehicle is legally responsible for an accident causing injury but fails to carry auto liability insurance.

Underinsured Motorists Liability (UIM) – Provides the same protection as UM coverage, except that it’s meant to cover the gap in payments you can recover when the other driver fails to carry a high enough limit.

Physical Damage – Collision – Collision coverage provides protection against loss or damage to a covered auto resulting from the impact with another vehicle or object. Collision losses are paid regardless of fault.

Physical Damage – Comprehensive – Also called, “Other Than Collision”, this coverage provides protection against loss or damage to a covered auto resulting from a cause other than a collision or upset of the vehicle.  This could include theft, vandalism, hail, flood and fire.

to apply for insurance. or

for more information about obtaining auto insurance through A4DD.

Coverage Symbols

Number symbols and definitions are utilized in quotes and policy forms to designate categories of vehicles that will be insured.  Symbols can range from 1 to 10 or higher.  Two that are especially common and important to understand are:

Symbol 7 – indicates that coverage applies for those autos specifically described on the policy. Auto liability coverage also applies to temporary substitute vehicles you do not own if a described vehicle is out of service due to loss or damage, breakdown, repair, or servicing. This symbol also provides coverage for newly acquired or replacement autos so long as they are reported to the insurance company within 30 days.

Symbol 8 – indicates that coverage applies for hired, leased, rented or borrowed autos.

Extra Protection Available

Business Auto policies may feature the following additional coverages:

  • Extra Expense Coverage for Return of a Stolen Auto
  • Rental Reimbursement Coverage with a daily allowance up to 30 days
  • Electronic Equipment Coverage
  • Hired Auto “Loss of Use” Coverage
  • Blanket Waiver of Subrogation (sometimes required by work contracts)

If you purchase physical damage coverage for your covered auto(s) you may select from these options:

  • Hired Auto Physical Damage Coverage.   Note: there is no coverage for a leased auto where the lessor agrees to insure damage to the auto
  • Towing & Labor Costs Coverage
  • Accidental Airbag Discharge Coverage – pays for costs to restore/replace airbags
  • Glass Coverage – eliminates any deductible for glass that is repaired vs. replaced

to apply for insurance. or

for more information about obtaining auto insurance through A4DD.