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What's in my Policy (cont.)
Uninsured Motorist Coverage — Pays you for property damage or bodily injury if you are in an auto accident caused by an uninsured motorist (a driver who does not have the minimum level of insurance required by law). Claims that you would have made against the uninsured driver who caused the accident are paid by your own policy. Uninsured motorist coverage does not pay benefits to the uninsured driver.
Underinsured Motorist Coverage — Pays you for property damage or bodily injury if you are in an auto accident caused by a driver who is insured, but who has less coverage than your underinsured motorist coverage. When damages are greater than the limits of the other driver’s policy, the difference is covered by your underinsured motorist coverage.
*Claims paid under uninsured or underinsured motorist coverage exclude the first $500 in damages.
Collision Coverage — Pays for damage to your vehicle as the result of a collision with another car or other object. Collision coverage pays you for damage that you cause to your automobile. You can also make a claim under your own collision coverage for damage to your car from an auto accident you did not cause. This may take less time than making a property damage liability claim against the driver who caused the auto accident. Your insurer then seeks reimbursement from the insurer of the driver who caused the auto accident. (See page 27.)
Comprehensive Coverage — Pays for damage to your vehicle that is not a result of a collision, such as theft of your car, vandalism, flooding, fire or a broken windshield. Comprehensive coverage also pays if you collide with an animal.
What does Underinsured Motorist Coverage pay for?
Jane purchases $100,000 in liability coverage and $100,000 in underinsured motorist coverage. Sam purchases only $15,000 in liability coverage.
Sam crashes his car into Jane’s car, causing $25,000 in damages. Sam’s insurance company pays Jane $15,000 of the damages, while Jane’s insurance company pays the remaining $10,000 (*less a $500 exclusion) from her underinsured motorist coverage.
Remember...
Comprehensive (also known as “comp” or “Other Than Collision”) and Collision coverages are not required by law, but may be required under the terms of an automobile leasing or financing contract.
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