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PERSONAL AUTO COVERAGE DESCRIPTION
Liability Coverage
The liability coverage of the personal auto policy provides protection against legal liability arising out of
the ownership or operation of an automobile. The insuring agreement agrees to pay damages for bodily
injury or property damage for which the insured is legally responsible because of an automobile accident.
The liability limit can be written as a single limit that applies to both bodily injury and property damage.
The policy can also be written with split limits in which the limits of insurance for bodily injury and
property damage are stated separately.
The insuring agreement also states that in addition to the payment of damages for which the insured is
legally liable, the insurer also agrees to defend the insured for all legal defense costs. The defense cost is
in addition to the policy limits.
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Medical Payments Coverage
The insuring agreement states that the insurer will pay all reasonable and necessary medical and
funeral expenses incurred by an insured because of bodily injury caused by an accident. Payment
can be made for expenses incurred within three years from the date of the accident. The insured is
the named insured and family members, and any other person injured while occupying a covered
auto. Pedestrians or cyclists are also considered the insured when struck by a vehicle. These
payments are made without regard to fault.
Uninsured/Underinsured Motorist Coverage
Uninsured Motorist Coverage
This insuring agreement pays for bodily injury to an insured who is injured by an uninsured
motorist, a hit-and-run driver, or a driver whose insurer becomes insolvent. Some states offer
coverage for property damage as part of the uninsured motorist coverage. Usually when
property damage is added a deductible would apply.
Underinsured Motorist Coverage
This coverage can be added to the policy to supplement the uninsured motorist coverage.
The coverage must be added to all automobiles listed on the policy, and it must be added for
the same limit as the Uninsured Motorist Coverage. Underinsured motorist coverage applies
when a negligent driver has liability limits at the time of an accident, but the liability limits
carried may be insufficient to pay for damages that the negligent driver is responsible for.
This is when the insured's underinsured motorists coverage would apply and payment for the
difference could be made. The two coverages are mutually exclusive and do not overlap or
duplicate each other. An insured can collect under one coverage or the other depending on
the situation, but not under both.
Physical Damage Coverages
- Collision Coverage
This coverage provides protection against the upset of your auto or non-owned auto or a collision
with another vehicle or object. Collision losses are paid regardless of fault.
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Specified Cause of Loss Coverage
This coverage provides protection only for certain losses. The losses are fire, lightning, explosion,
theft, windstorm, hail, earthquake, flood, mischief, vandalism, and the sinking, burning, collision,
or derailment of a conveyance transporting the insured vehicle.
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Comprehensive Coverage
This coverage provides protection against any loss or damage to a covered auto resulting from loss
other than a collision or upset, or a loss specifically excluded. This coverage also provides for
supplemental payments for transportation expenses in the event of total theft of a covered auto or a
non-owned auto. The auto must be insured for comprehensive or specified cause of loss coverage.
Coverage begins forty-eight hours after a theft of a covered auto. Payments end when the auto is
returned to use or the insurer pays for its loss.
Endorsements
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Extended Transportation Expense Coverage (Rental Reimbursement)
This coverage applies when a covered auto or non-owned auto is withdrawn from use more than
twenty-four hours due to a loss, other then theft. The insuring agreement agrees to pay up to the
stated amount for expenses incurred in renting a vehicle. The coverage usually carries a per day
limit and a maximum amount limit.
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Towing and Labor Coverage
This coverage pays for towing and labor cost each time a covered auto or non-owned auto is
disabled, up to the stated amount.
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Personal Injury Protection (PIP)
This is an endorsement that adds no-fault benefits. No-Fault means that in the event of an
automobile accident, each party collects from his or her own insurer regardless of fault. No-fault
benefits are limited to the injured person's actual economic loss, and are paid as specified by the
law of the insured's state. Payment could be made for such losses as loss of earnings resulting from
bodily injury and medical and funeral expenses. Other expenses can also be considered. The PIP
endorsement is only available in certain states with No-Fault Laws. The endorsement applies only
to bodily injury and not to property damage. (The state of Michigan is the exception to property
damage.) No-Fault Laws vary widely from state to state.
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