Insurance Matters - Insurance 101
Understanding insurance can often be like trying to learn a foreign language. Many find it confusing and intimidating. Fortunately, there’s help. Here is a quick reference designed to help you understand some of the most common kinds of coverages.
Liability covers bodily injury and property damage (BI/PD). This covers your legal liability, up to the dollar limits you select, for damages caused to others in a covered vehicle accident. In most states today, liability insurance is mandatory.
Liability limits generally appear as three numbers, for example, 25/50/25 or 100/300/100. The first number refers to the maximum amount, in thousands, that your insurance company is obligated to pay for bodily injury per person. The second number is the maximum that would be paid out for bodily injury per claim and the third number represents the maximum amount your insurance company is obligated to pay for property damage you cause.
Uninsured/Underinsured Bodily Injury (UIM BI)
is coverage for injuries to you and your passengers when there is an accident and the other driver is both legally responsible for the accident and considered uninsured or underinsured. It also pays if you are hit by a hit-and-run driver.
Uninsured/Underinsured Property Damage (UMPD)
is coverage for your insured auto if damaged by an uninsured motorist or hit-and-run driver.
Collision. When you buy collision coverage, your insurance company pays for damages to your vehicle if it collides with another vehicle or object. Collision coverage involves a deductible amount you select when you purchase your policy. This amount is what you are required to pay before your insurance company starts picking up the tab. Remember, the deductible amount is the amount you need to pay in the event of a claim.
Comprehensive covers damage caused by events other than a car collision—such as fire, theft, vandalism, hail or flood. It also covers damage caused by your vehicle colliding with an animal. And if your car is stolen, it will cover the cost of a rental, subject to a daily limit. Like collision coverage, a deductible usually applies.
Personal Injury Protection (PIP). PIP covers your medical bills and lost wages, and personal services you must pay someone esle to do for you as a result of a car accident.
North Shore Insurance can help you determine the price, coverage and service that best meets your needs.