Buying car insurance can be a confusing process. Understanding the various coverages associated with your auto policy can be challenging. Here we will outline the various terms and what they mean to you. By the end you should understand exactly what you are paying for.
Bodily Injury Liability - (BI) Coverage is provided for bodily injury for which an insured becomes legally responsible because of an auto accident.
Property Damage - (PD) Property Damage is provided when an insured is legally liable for physical damage to tangible property of others as result of any one accident occurring outside Michigan.
Property Protection - This coverage pays for damages up to $1,000,000 to property and parked vehicles of others.
Uninsured Motorist Coverage - Coverage is provided for bodily injury sustained by an insured when caused by a motorist who is uninsured or insured for less than the limits required by law. The limits selected for uninsured motorists coverage must not exceed the limits selected for bodily injury liability.
Underinsured Motorist Coverage - Underinsured motorists coverage is mandatory if the uninsured motorists coverage limit selected is $25,000/50,000 or greater. The underinsured motorists limit must equal the limit selected for uninsured motorists. The limit selected for uninsured/underinsured motorists coverage must apply to all vehicles on the policy and cannot exceed the limit selected for bodily injury liability coverage.
Personal Injury Protection - In the event of an injury, this coverage pays medical Benefits for medical expenses and work Loss Benefits for loss of income and for substitute services. In the event of death as a result of the injuries, this coverage pays survivors’ Loss Benefits for certain benefits to dependents.
Collision Coverage - The coverages shown below are available for protection from loss due to collision damage to an insured vehicle.
Limited Collision: This coverage pays, without a deductible, for damages only when the driver of an insured vehicle is not substantially at-fault in the accident.
Basic Collision: This coverage pays for the damages, less a deductible. The deductible applies regardless of fault.
Broad Collision: This coverage pays for damages, less a deductible. The deductible is waived if the driver of the insured car is not substantially at-fault in the accident.
Comprehensive Coverage - Coverage is available for loss to an insured vehicle, less the deductible shown on the policy, resulting from fire,
theft, vandalism and certain other causes. A full glass option is available for which no deductible applies to claims for safety glass.
Car Rental Coverage - Coverage is available for car rental charges incurred when the insured vehicle has been withdrawn from service for more than 24 hours due to a comprehensive or collision claim. This coverage must be written in conjunction with bodily injury liability and comprehensive coverages.
Extra Equipment Coverage - Coverage in excess of $1,000 is available for parts, equipment and accessories that are non-OEM equipment (Extra Equipment) that is permanently attached to that vehicle. This coverage may only be purchased in conjunction with comprehensive coverage.
Loan/Lease Gap Coverage - Coverage is available when the remaining balance of a loan or lease arrangement exceeds the actual cash value of the insured vehicle at the time of a total loss. This coverage may be purchased only if all of the following apply:
• comprehensive coverage applies to the vehicle.
• the vehicle has not been previously titled.
• coverage is first added within 3 years of the purchase or lease date.
• coverage is added within 90 days of the date the vehicle is first insured with the company.
Broadened Other Car Coverage - Extends bodily injury liability and property damage liability to cover the regular and frequent use of a Non-Owned Motor Vehicle not shown on the policy. Coverage is provided for use by the Principal Named Insured and Resident Relatives. When selected, coverage will be shown on only one vehicle regardless of the number of drivers or vehicles on the policy. Individuals employed by an automobile dealership, auto service or repair facility or car rental agency are not eligible for coverage.
Enhanced Exterior Repair Option - Coverage is available for repairs to exterior parts of an insured car using new original equipment manufacturer (OEM) replacement parts, excluding window glass and mechanical parts. Coverage may only be purchased in conjunction with comprehensive coverage/comprehensive coverage full glass for vehicles less than 10 model years old at the time the coverage is added.