Understanding Auto Insurance

Have you ever looked at your auto insurance policy and saw numbers such as 50/100/50 and wondered what they mean? Or have you seen symbols such as UM, and never bothered to ask because you did not want to be perceived as not knowledgeable! Well anyway I hope you learn something new today.

Auto Insurance Liability Coverage

Seeing numbers like 50/100/50 is nothing new on the auto insurance policy. The first 50 or $50,000 is the maximum amount your policy will pay for bodily injury in a single auto accident, for any one person, which you are legally responsible for damages. These people must not be in your car to be eligible to collect under this section of your coverage. The 100 or $100,000 represents that highest amount your insurance policy will pay all parties in one accident, for which you are legally obligated to pay. It does not matter if two or twenty people are injured. The last 50 or $50,000 is the most your auto policy will pay for the physical damage to a vehicle you damage. Those Benz's are getting expensive!

Auto Medical Coverage

By now you probably grabbed your auto insurance policy! Look for a number between $1000 - $5000. Underline or highlight this number because it is important to you. This number pays necessary medical and burial expenses up to that dollar limit. The benefit covers you, and anyone in your auto only, regardless of fault in an auto accident.

Uninsured Motorist Coverage

Maybe the most misunderstood concept in auto insurance history is Uninsured Motorist Coverage. This coverage in your policy covers your bodily injury if you injured in an auto accident, the court rules in your favor for bodily injury, and the other driver is classified as an uninsured driver. Are you wondering who is an uninsured driver? An uninsured driver is any of the following:

• A person who does not have enough liability insurance according to the laws of that state (e.g.. Indiana 25/50/25)

• A driver who hits your vehicle and their identity remains a mystery

• A person who has no insurance and cannot pay the judgment against them

• An individual whose insurance company is broke or refuses to pay

Auto Physical Damage Coverage

This section of your auto insurance policy covers damage to your vehicle. If someone in another vehicle hits your auto it is called a "Collision" Otherwise if hail, theft, explosion, fire, etc., destroys your car it is "Other than Collision" or commonly referred to as "Comprehensive Coverage." What is next, pay the deductible and file the claim and get your car fixed. Your insurance company goes after the bad guys. Remember if you are involved in an accident to call your insurance company first. Some people do not realize that your insurance company will represent you in court! You usually pay for that right in your policy, so use it!