Bodily Injury Liability
Bodily injury liability coverage applies when, through the use of an insured auto, you (or another insured person) injure other people - such as pedestrians, passengers in your car or people in other vehicles. If injury claims or lawsuits are brought against you, bodily injury liability coverage provides for your legal defense. Also, if you are found legally liable by an investigation or by a judge, this coverage pays the damages assessed against you up to the dollar limits in your policy.
Property Damage Liability
If you caused an accident and damaged someone else's car, how would you pay for the damages? Suppose you caused damage to a telephone pole, a light post or a building? Property damage liability coverage applies in these situations. Property damage coverage does not pay for the damage to your property, but pays, up to your policy limits, for the damaged property of others. If claims or lawsuits are brought against you, property damage liability coverage provides for your legal defense. And, if you are found legally liable by an investigation or by a judge, this coverage pays the damages assessed against you up to the dollar limits in your policy.
Tennessee Financial Responsibility Law requires minimum auto liability coverage limits of $25,000 per person, $50,000 per accident for bodily injury, and $10,000 for property damage. Most companies also offer higher coverage limits. If you'd like more coverage than what your auto insurance offers, an "umbrella" type policy may fit your needs.
Medical Payments
Medical payments coverage pays for medical expenses, no matter who's at fault, if you and/or occupants in your car are injured. It also protects you and relatives living in your household if injured in someone else's car, or by a car as pedestrians. All reasonable and necessary medical expenses are covered up to the amounts and within the time specified in your policy.
This coverage is valuable if you do not have health insurance because payment will be made while liability is being determined. This should not be used as an alternative to medical insurance as the coverage provided under Medical Payments is a limited.
UMBI/PD
Uninsured Motorist Coverage is optional in the state of Tennessee. It is however a very economical coverage to have on your auto policy, and also a very important coverage to protect you and your family. UMBI offers protection for you and any passenger in your vehicle when injury is caused by an accident resulting from an uninsured motorist. UMPD affords you protection for your vehicle, which may be damaged by an uninsured motorist.
With an example of UMBI/PD coverage of 50/100/50, you would receive up to $50,000 in protection for one person; up to $100,000 in protection for all persons in an accident. This would also afford up to $50,000 in property damage protection.
With today's very high cost of medical insurance, the UMBI portion of your Auto Insurance Policy does become an important part of your financial security to you, your family and any occupants that may be injured in your vehicle due to an accident caused by Uninsured Motorists.
Suppose you are injured in an accident caused by an uninsured motorist? Or, what if you are injured by a hit-and-run driver?
In both cases, uninsured motorist coverage (a hit-and-run driver is included in the definition of an uninsured motorist) will pay for the bodily injury damages that you would normally recover from an insured driver. In addition to your medical expenses and loss of earnings, this can also include damages for pain and suffering. This means your insurance company will pay, up to your policy limits, you, relatives who live with you, and the occupants of your insured car for bodily injuries caused by an uninsured driver or by a hit-and-run accident. Uninsured motorist coverage also covers bodily injury costs for you and relatives who live with you if injured by an uninsured motorist as pedestrians or while riding in someone else's car.
Underinsured Motorist
What if you are injured and the coverage limits of the person at fault are not enough to pay your medical bills? Underinsured motorist coverage provides you with extra protection for bodily injury or death, which results from an accident where the party at fault is underinsured. If the bodily injury liability limits or bond limits of the person at fault are not sufficient to cover you, then your underinsured motorist coverage will pay the difference up to your policy limits.
Coverage For Your Car
Comprehensive
If your car is damaged by fire, theft, vandalism, glass breakage, windstorm damage or even contact with an animal, comprehensive coverage will pay the repair costs up to your policy limits and less your deductible (policies are available without a deductible). Comprehensive coverage does not include wear and tear, engine failure, or other mechanical difficulties. When you are financing your car, comprehensive coverage may be required by the lien holder.
Collision
The cost to fix or replace your car if it's overturned, or damaged in a collision with another car or object, is paid by collision coverage. Your insurance company pays for damages, up to your policy limits, regardless of who is at fault. Collision coverage is usually sold with a deductible, an amount you must pay from your own pocket before your policy pays. Generally, the higher the deductible, the lower the premium.
Many people decide not to carry collision insurance on an older model car, which is fully paid for and has no lien against it. You might want to discuss this cost cutting measure with your insurance agent or company. But remember, if your car is damaged in an accident caused by you or an uninsured driver and you do not carry collision insurance or uninsured motorists property damage coverage, you could very well be responsible for the repair of your own car.
A Final Note
As you can see, the importance of understanding the basics of auto insurance is critical to your financial and physical well being. Choosing the coverage that's right for you is essential. This information is not offered as a legal interpretation or explanation of any coverage limits you may have under your current policy. Therefore, if you do not know the full extent of your automobile insurance coverage, discuss the policy with your insurance representative as soon as possible. We will not be held responsible for any misinterpretation of any description or presentation of any terminology as listed here. You should always consult your insurance agent or legal representative for proper descriptions and coverage's of any insurance policy.
