When dealing with auto insurance, it sometimes is a challenge to fully understand what it is you are covered for and when the policy applies to you. Getting into an accident is stressful enough already so don’t add more pressure by not understanding your policy!
Here is a rundown of the various types of coverages within a Car Insurance Policy:
- Liability: This type of coverage covers other people. This coverage applies to personal injury claims and property damage claims of other people when the insured vehicle is the cause of a car wreck.
This is the portion of the policy where the other driver’s insurance company will pay out to our injured client for medical bills, lost wages, other out of pocket expenses allowed by law and the pain and suffering damages of the injured client. Some policies will include the property damage limits in this section of the insurance policy. This coverage is required in almost all states, including Georgia and Alabama. This is the minimum by law and some sales agents call this “full coverage”. However, it is not. As stated below, there are additional types of coverage for people to purchase.
The minimum Liability Coverage in Georgia and Alabama is $25,000/50,000. The first amount listed is the maximum amount that a single individual person can get from a single event. The second amount is the total amount the auto insurance will pay out to ALL claimants involved in a single event. For example: if 10 people were hurt in a single car wreck and the Liability Coverage policy limits are 25,000/50,000; then all 10 people must split the $50,000 (max amount per event), but 1 person possibly could get as much as $25,000 (max per individual) and if so then the other 9 people must split the remaining balance of $25,000.
When the property damage limit is included the Liability Coverage insurance is broken down into three amounts: first, per person limit for bodily injury; second, per event limit for all bodily injury claimants; and the last amount is the maximum amount payable for property damage. As an example, these limits are generally written as 100/300/100.
- Collision: This type of coverage covers the insured vehicle. This type of coverage pays for any damage to owner of the car resulting from a collision with another car or object, regardless of who was at fault. This generally has deductibles which often range from $250 up to $1,000. Typically, a higher deductible means a lower premium.
- Comprehensive: This insurance will pay for damage to the insured vehicle that is caused by theft or something other than a motor vehicle accident. This covers events such as: fire, falling tree limbs or other objects, earthquake, storms, sleet/hail, water, vandalism or striking an animal, such as deer. This type of coverage generally also has a deductible amount similar to Collision Coverage.
- Medical Payments (Med Pay) or Personal Injury Protection (PIP): This coverage covers the owner of the policy and people within the car and resident relatives. This will pay for the medical treatment resulting from injuries sustained in a car wreck, regardless of fault. PIP may also cover lost wages and funeral costs. Requirements for this coverage vary by state. This is not required in Georgia or Alabama.
- Un-insured and Under-Insured Motorist Coverage (UM or UIM): This type of coverage covers personal injury claims for the owner of the policy, a family member, resident relative or a passenger in the car when the car wreck was caused by another person. The other person’s Liability Coverage is priority, but in the event that the at-fault driver does not car insurance, of if they don’t have enough car insurance to cover the full value of the claimant’s case, then this type of coverage would apply as additional car insurance for personal injury claims. Requirements for this coverage vary by state. Georgia requires that this type of coverage must be offered but it can be rejected when the policy is purchased.