Motor Vehicle Insurance: What's Covered?

Motor vehicle insurance is a legal requirement for drivers in many parts of the world. The primary use of vehicle insurance is to provide financial protection against physical damage or bodily injury resulting from traffic collisions. It also covers liability that could arise from incidents in a vehicle. The specific terms of vehicle insurance vary with legal regulations in each region.

There are several types of motor vehicle insurance available to drivers. These include comprehensive insurance, third-party liability insurance, collision insurance, uninsured motorist insurance, medical payments coverage, and personal injury protection insurance. Comprehensive insurance provides an extra level of coverage in the instance of an accident involving another vehicle. It may help pay for damage to your car due to incidents besides collisions, including vandalism, certain weather events, and accidents with animals. Third-party liability insurance is mandatory for every vehicle owner in some places, such as India. This type of insurance protects the policyholder's interests from damages caused to property or an individual by the policyholder.

Comprehensive insurance

• Financial security and peace of mind in case of emergencies
• Covers lawsuits and legal fees against policyholders due to accidents
• Protects policyholders and their vehicles
• Covers damages caused by the policyholder to their vehicle
• Allows policyholders to claim incurred losses if they are at fault for an accident

Some things that comprehensive insurance does not cover include:

• Damage caused by drunken driving or drug use
• Damage caused by an unlicensed driver
• Damage caused by mutiny or war
• Mechanical or electrical breakdown, and wear and tear of the vehicle

Third-party liability insurance

In the context of motor vehicle insurance, third-party liability insurance covers the costs of injuries or damage caused by the insured driver to another driver or their property in an accident. This includes medical bills, legal fees, lost wages, and funeral costs, as well as repair or replacement costs for the other person's property, such as their car, building, fences, or other structures.

The first party in this scenario is the insured driver, the second party is the insurance company, and the third party is the driver who makes a claim against the insured for injury or property damage.

It is important to note that third-party liability insurance does not cover damage to the insured's own vehicle. For this type of coverage, a comprehensive insurance policy or additional coverage, such as collision insurance, would be needed.

Collision insurance

• Crashes with other vehicles
• Collisions with objects such as trees, poles, guardrails, or curbs
• Roll-over accidents
• Hit-and-run incidents
• Damage caused by uninsured or underinsured drivers
• Damage from potholes

It is important to understand the exclusions of collision insurance. It does not cover:

• Damage to another person's car
• Damage to your car related to weather events, such as hail or flood damage
• Repairs to objects you crash into, such as fences or poles
• Theft, vandalism, or fire damage to your vehicle
• Medical costs from injuries sustained by you or your passengers
• Personal belongings inside your car
• Normal wear and tear

Uninsured motorist insurance

Uninsured motorist coverage can include protection for injuries to you and your passengers, as well as damage to your vehicle. It is important to note that there are two types of uninsured motorist coverage:

• Uninsured motorist bodily injury (UMBI) coverage, which pays for medical bills related to a crash.
• Uninsured motorist property damage (UMPD) coverage, which pays for repairs to your vehicle.

In some states, only UMBI coverage is available. Additionally, underinsured motorist (UIM) coverage is separate but is sometimes packaged with UM coverage. UIM coverage pays for medical bills and other expenses if you are in an accident with a driver who does not have enough insurance to cover your costs.

The cost of uninsured motorist coverage varies, but on average, it is around $136 per year. While not all states require this type of insurance, it is highly recommended as it can provide financial protection in the event of an accident with an uninsured or underinsured driver. Without this coverage, you may be responsible for paying for medical bills and vehicle repairs out of pocket.

To determine if you need uninsured motorist coverage, consider the following:

• Do you have other insurance to cover car accident injuries and damage?
• Is there a high percentage of uninsured drivers in your state?
• Do you want coverage for lost wages, pain and suffering, and other benefits that may not be included in your health insurance?

Medical payments coverage

MedPay can help cover medical costs for you or your passengers, regardless of who is at fault in the accident. It can also cover medical expenses if you are hit by a car while walking or biking, or if you are injured in an accident in someone else's car. MedPay covers a range of medical expenses, including ambulance and EMT fees, health insurance deductibles and copays, chiropractic services, hospital visits, nursing services, surgery, X-rays, and dental procedures. It can also cover funeral expenses in the event of a fatal accident.

MedPay is typically low-cost and can give you added protection, ensuring that you won't be burdened with high medical bills for yourself or your passengers. You can choose the amount of coverage you want and pay monthly premiums, which are usually rolled into your existing auto insurance policy. The coverage limits typically range from $1,000 to $10,000, and you can select the amount of coverage based on your health insurance deductible and other factors.

It's important to note that MedPay does not cover lost wages due to recovery from medical treatments, childcare costs, or medical expenses for anyone in the other vehicle involved in the accident. Personal injury protection (PIP) is a similar type of coverage that is required in some states and offers additional benefits, such as wage reimbursement and childcare cost coverage.

Frequently asked questions