Every month you make a payment to your insurance company, but do you really understand what it all means? What are the different categories, and what do they mean to you? Pennsylvania automobile insurance coverage can often be confusing – not only to new drivers, but also to those with many years of driving under their belts. Terms such as coverage, bodily injury liability, personal property, uninsured motorist, and comprehensive can be puzzling and frustrating. This article, and the ones that follow, will help to dispel the confusion and arm you with facts and information.
To begin, we will discuss liability insurance. Simply put, it’s insurance on “the other guy.” It pays for injury to others and damage done to other people’s cars or property. Liability insurance is a requirement for all drivers, in almost all of the 50 states. There are 2 types of liability insurance – bodily injury and property damage. Let’s discuss them individually, and answer some questions that you may have.
Bodily injury liability insurance:
What is it?
The term liability is defined by Webster’s dictionary as “an obligation under law. A legal responsibility for something, especially costs or damages.” As we said earlier, liability insurance covers “the other guy.” Bodily injury liability insurance is insurance that covers the “bodily injuries” of the other guy. In the event that you are responsible for an accident, this is insurance coverage that pays the medical costs of injuries sustained by others.
What does it cover?
Bodily injury liability insurance covers the cost of injuries sustained by other people involved in an accident where you are at fault.
Who does it cover?
It covers people riding in your car, people in a car that you hit, or anyone else injured in an accident that is your responsibility.
Why do you need it?
You need it because in the event that you cause an accident, you are financially responsible. This means that you are personally responsible for the medical costs of any and all people that are injured as a result of the accident. Medical costs are the currently the leading cause of personal bankruptcy in the United States. When you purchase bodily injury liability insurance coverage, then your insurance company will pay the medical costs up to the amounts of your coverage.
What types of coverage are available?
Generally, bodily injury liability insurance coverage is listed in two parts, such as $25,000/$50,000. The first number is the maximum amount that your insurance company will pay “per person.” The second amount is the maximum amount that will be paid “per accident.”
Let’s say, for instance, that you are responsible for an accident that injures 2 people. The first person’s medical bills come to $15,000. The second person’s injuries amount to $35,000. Your coverage only allows for $25,000 per person, in other words $25,000 + $25,000. In this case, the second person’s medical bills are $10,000 over the maximum amount of your coverage, and that additional amount won’t be paid.
What happens if you don’t have enough coverage?
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As in the scenario above, if you don’t have enough coverage, then you will be personally liable for the additional costs. This means that you could be sued for the additional $10,000 by the person involved in the accident above. In that event, you would not only incur the medical costs, but also the legal fees involved.
How much coverage do I need?
Pa Car Insurance coverage exists so that you can protect your assets. Purchasing as little as you can get by with is short-sighted; it is also a great personal risk. You should purchase as much coverage as you can afford. The current cost of automobile accidents far exceeds most state minimums. Both the insurance industry and consumer groups recommend that you carry a minimum of $100,000 coverage per person, and $300,000 coverage per accident.
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