Understanding Auto Insurance: What Does P&R Mean?

In the context of auto insurance, PR stands for Personal Liability. This is a type of car insurance that covers bodily injury or death to another person as a result of an accident caused by the policyholder. Personal liability coverage includes medical bills, lost wages, pain and suffering, and legal expenses if the policyholder is sued as a result of the accident. PD insurance typically has a higher coverage limit than PL insurance because medical expenses can be significantly more expensive than property damage.

PL and PD

PL, or property liability, covers damage caused to someone else's property by your vehicle in the event of an accident. This includes damage to another car, fence, building, or any other type of property. PL insurance covers the cost of repairing or replacing the damaged property up to the policy's limit but does not cover the cost of repairs to your own vehicle or property.

PD, or personal liability, is a type of car insurance that covers bodily injury or death to another person as a result of an accident for which you are at fault. Personal liability coverage includes medical bills, lost wages, pain and suffering, as well as legal expenses if you are sued as a result of the accident. PD insurance typically has a higher coverage limit than PL insurance because medical expenses can be significantly more expensive than property damage.

Both PL and PD coverage limits can vary depending on the policy and the state in which you live. State laws may also require you to carry a certain amount of PL and PD coverage to legally operate a vehicle. It is important to speak with your insurance agent to ensure that you have adequate coverage to protect yourself financially in the event of an accident.

Bodily Injury Liability Insurance

In the event of an accident, bodily injury liability insurance can help protect your assets if you are sued. It is important to note that this type of insurance does not cover your own medical expenses or property damage; separate coverage is required for those instances.

Comprehensive Coverage

When purchasing comprehensive coverage, you don't select a limit. The most it will pay is based on the actual cash value of your vehicle, and you will be responsible for paying your selected deductible. Comprehensive coverage is typically added to existing policies, such as classic car insurance, motorcycle insurance, and more. It is not required by law but is a valuable addition to your auto insurance policy to ensure you're covered in the event of unforeseen circumstances.

Declarations Page

A declarations page, also known as a "dec page", is a summary of your auto insurance policy. It is usually the first page or pages of your insurance policy document. It contains important information about your policy, such as:

• Policy number and term period: This includes the effective date when coverage begins and the expiration date.
• Insured drivers: A list of all insured drivers, including the policyholder and any additional drivers covered under the same policy.
• Vehicle details: Information about the covered vehicles, including the make, model, year, and Vehicle Identification Number (VIN).
• Coverage types and limits: Details about the types of coverage included in the policy, such as liability, collision, and comprehensive insurance, along with the limits of liability.
• Deductibles: The amount you are required to pay out of pocket before the insurance company covers the rest.
• Premiums: Information about the total cost of the policy and how frequently you pay it.
• Agent and insurance company information: Contact details for your insurance agent and the insurance company.
• Lienholder: Information about the entity that holds your lease or loan if you lease or finance your vehicle.
• Loss payees: Any individuals or companies with an insurable interest in the vehicle, such as a lender or lessor.
• Excluded drivers: A list of any drivers specifically excluded from coverage under the policy.
• Discounts: Details of any discounts applied to your policy, such as safe driving or multiple vehicle discounts.

Your insurance company will typically send you the declarations page when you purchase or renew your policy. You may receive it via mail, email, or fax, or access it through your insurance company's website or mobile app. It is important to review your declarations page to ensure that all the information is accurate and reflects the coverage you have selected.

Deductible

A car insurance deductible is the amount of money that a policyholder must pay out-of-pocket before their insurance provider covers the remaining costs of a claim. The deductible only applies to comprehensive and collision coverage and must be paid every time a claim is filed. The deductible amount is chosen by the policyholder when they purchase their insurance and can typically be selected from a range of options, such as $250, $500, $1,000, and $2,000. A higher deductible results in a lower insurance premium, whereas a lower deductible leads to a higher premium.

For example, if a policyholder has a $500 deductible and files a claim for $3,000 in damage from a covered accident, they will have to pay their $500 deductible, and their insurance provider will cover the remaining $2,500. It is important to note that the deductible only applies if the damage is covered and the claim is approved.

In some cases, the cost of repairs may be less than the deductible. In such situations, the policyholder would typically pay for the entire cost of repairs out-of-pocket, as the insurance only covers damages above the deductible amount. Additionally, there may be certain scenarios where a deductible does not need to be paid. For instance, if a policyholder causes an accident but does not damage their car, they will not pay a deductible as their liability coverage takes care of the other driver's injuries and property damage without a deductible.

When choosing a deductible, it is essential to consider factors such as affordability, the potential savings on insurance premiums, the value of the car, and the requirements of the lender if the vehicle is financed or leased. Ultimately, the decision comes down to the policyholder's preference for a higher or lower deductible and their comfort level with the associated financial implications.

Frequently asked questions