When your automobile insurance bill arrives in the mail, you will
see that the premium is broken down into a bunch of different
sub-totals. Each one corresponds to a particular "coverage,"
or type of insurance. So what are they? Here is a quick
primer:
| 1. |
PIP Insurance |
In so-called "no-fault" states like Florida, the basic
coverage is Personal Injury Protection, or "PIP" insurance.
This is insurance which covers the driver, and any uninsured
passenger in the car (or any uninsured pedestrian or bicyclist)
up to a particular "coverage limit" for the their medical
expenses or lost wages and their out-of-pocket expenses arising
from a crash. It pays regardless of whether you are
responsible for the accident or someone else is. That is
why this coverage is sometimes called "No-Fault."
|
| 2. |
Liability Insurance |
Wherever your are, you should have "liability insurance."
This is insurance to cover you for injuries and damage which you
cause to others while you are
driving. This is the insurance which pays if you should be
sued. In addition to paying for the amounts which you
might be sued for, it also pays for your defense. That is,
your liability insurance provides you an attorney, at the
insurance company's expense, to protect your interests.
|
| 3. |
Medical Payments |
This insurance is similar to PIP insurance, in that it pays
for your own expenses regardless of who causes the accident.
In "no-fault" states like Florida, it is supplemental to your
PIP coverage, and covers both your PIP deductible and your
medical expenses in excess of the mandatory PIP coverage.
|
| 4. |
Collision Coverage |
This is coverage for damage which occurs to
your car because of a collision. It
is usually subject to a deductible, but the deductible might be
reimbursed by the other fellow's liability insurance, if he is
at fault for the crash.
|
| 5. |
Comprehensive Coverage |
This is very similar to Collision Coverage, but it covers
damage to your car from anything other
than a collision. This means things like flood damage,
wind damage, vandalism or the like. Once again, this
coverage is subject to a deductible.
|
| 6. |
Uninsured/Underinsured |
This is a kind of insurance that every
driver should have. What it really is is a separate policy
of liability insurance which you buy to cover whatever idiot
might crash into you and not have insurance (or not have enough
insurance.) It's important because your PIP insurance may
not be enough to pay for all of your damages. And there is
nothing more frustrating than to find out that the guy who ran
into you has no insurance. When you buy insurance, you get
"UM/UIM" automatically unless you
affirmatively decline it. It is remarkably
inexpensive and is worth having. DON'T DECLINE IT!!
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Insurance companies aren't the easiest to love, but they perform a
very important function. We should never forget that driving
is a dangerous activity, and any driver can be responsible for a
catastrophic crash with just a moment's inattention. Having
adequate insurance coverage is absolutely essential. Don't
sell yourself short. It can
happen to you.
Thomas S. Hudson, Attorney
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