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Auto Insurance Coverages
Rental and Towing Reimbursement
Liability Coverage in Most States (Except No-Fault States)
Automobile Liability coverage pays for bodily Injury and property damage to a third party if you or other insured drivers on your policy caused an accident. Your insurance company will pay compensation to a third party, for their medical bills, vehicle/s repair or replacement, out of pocket expenses, loss of earnings and punitive damages for pain and suffering. If other party/ies has caused an accident, their insurance company will pay you and your passengers, if any, compensation for medical bills, vehicle/s repair or replacement, out of pocket expenses and loss of earnings, as well as punitive damages for pain and suffering. If the party at fault does not have Liability Insurance you may be compensated by your insurance company if you have purchased Uninsured Motorist Coverage.
Liability coverage is required by most States Financial Responsibility Law. Department of Motor Vehicles is vigorously enforcing the law. Failure to show prove and maintain Liability Insurance may cause suspension of Driver's License, substantial penalties and years of mandatory monitoring by the State's DMV. The Uninsured Motorist coverage is not required by State Financial Responsibility Law. Required minimum limits of Liability vary from State to State. Leasing Companies usually required much higher limits of Liability than State required limits, because leasing company as a legal owner of leased vehicles can be held responsible for injury and loss caused by leasers.
It is an optional coverage which may be purchased as addendum to your Liability Coverage. Uninsured Motorist pays you for your bodily injury and Property damage if the accident caused by other party, which was driving without liability Insurance, in violation of the State law.
It is an optional coverage you may purchase as addendum to your Liability and Uninsured Motorist Coverage. It will pay you for your damage and bodily injury caused by third party in excess of third party policy liability limits.
Under collision coverage, your insurance company pays for damage to your car that results from a collision or from overturning.Under comprehensive coverage, your insurance company pays for damages when your car is stolen or damaged by fire, flood, hail, or other perils; but not when it is damaged by a collision or from overturning.
While neither of these coverages is required by law, they are both usually required by lienholders (finance companies) who hold the title of your car when you have an outstanding car loan.
Most people think they have so-called "full coverage" because they see "comprehensive coverage" listed on their policy and they think that means they are fully covered. This is not the case. Comprehensive insurance does not mean full coverage. In reality, this coverage pays for damages caused by so-called "acts of God" - e.g. lightening strikes, earthquake, etc. It goes hand in hand with your collision coverage which pays for damages to your vehicle if you are hit by another car, your car overturns, you back into a pole, etc. Remember: Comprehensive insurance does not mean you are "fully" covered. If you hold the title to your car, you may consider dropping collision and/or comprehensive coverage on older cars worth less than $1,000 value.
Word "Deductibles", applies only to Comprehensive/Collision or Physical Damage Coverage. In essence its a co-payment. The amount you pay for repair or replacement of your vehicle. The insurance company pays the rest. The higher the deductible you chose, the lower is the cost of your physical damage coverage.
The Medical Expense Benefit on your insurance policy covers your medical bills that result from any injuries you suffer in an auto accident. This benefit is important in case of at fault accident. The medical expense coverage ranges from $5,000 to $10,000 per accident. The above shown limits are insufficient when you're dealing with medical bills, especially when you consider the potential costs of hospital treatment, surgery, extensive physical therapy, rehabilitation, and other medical services. We recommend a minimum coverage of $10,000 or possibly even more, especially if you do not have other medical insurance. If you are not at fault in accident, you must file a claim with the insurance company of the party at fault to access higher limits than those on your Medical Expense policy.
If you have other medical insurance:
If you use up the limit of Medical Expense Benefit on your automobile insurance policy, you may be able to pass the excess charges on to your own medical or health insurance plan (such as Blue Cross/Blue Shield). However, you should be aware that some medical plans may not cover certain treatments or may only pay a portion of your bills.
You should also know that your health insurance plan, or any other assistance program, may demand that you reimburse them if you recover other money for your injuries. Remember: If the only coverage you have is the auto Medical Expense Benefit, you may be personally responsible for any bills over the limit of that coverage.
Rental and Towing Reimbursement:
This optional coverage pays for out of pocket costs of towing your vehicle to a repair shop and cost of rental vehicle while your covered vehicle is being repaired. This coverage is usually sold as an addendum to comprehensive/collision coverage of your auto insurance policy. If other party is at fault it usually pays for your out of pocket cost, including your Towing and Rental reimbursements.