Explanation of Insurance Coverage for Auto and Motorcycles Polocies
What is Bodily Injury Liability?
Bodily Injury Liability coverage typically provides coverage for damages which a person insured under this coverage is legally obligated to pay because of bodily injury they cause to others in a covered accident.* If you are responsible for injuring someone in an accident, you may be liable for, among other things, the costs of their medical treatment, lost wages, and pain and suffering. These losses can be significant (sometimes totaling hundreds of thousands of dollars) and, if you do not have adequate amount of insurance coverage to cover the losses, the person you injured may pursue your assets and income to cover the losses not covered by your insurance. For this reason, one rule of thumb for Bodily Injury Liability coverage is to purchase the highest limit you can afford.
Because you are married, have children, own a home, and your salary and assets are substantial, you might consider carrying limits of $500,000/$1,000,000. (In addition, depending on your individual situation, you may also want to consider a Personal Umbrella Policy. This can be a very cost-effective means of extending your liability protection). While such a selection would exceed that most commonly chosen by our customers in New York, your circumstances indicate that you may want to seriously consider higher coverage levels.
What is Property Damage Liability?
Property Damage Liability coverage typically provides coverage for damages which a person insured under this coverage is legally obligated to pay because of damage they cause to the property of others in a covered accident.* Consider the potential costs if you destroy someone else’s expensive new car, or cause structural damage to a home, or storefront. As with Bodily Injury Liability coverage, some believe the most prudent decision here is to purchase the highest limit you can comfortably afford.
*Some of the factors you’ll want to consider when making your decision include: the total amount of assets you have to lose, your future earnings, your need to protect your savings for retirement and/or education, any contractual obligations you may have to a lessor/lender, the high cost of some automobiles on the road today, and the very low cost of higher coverage limits.
Your circumstances suggest you might consider carrying a $300,000 coverage limit, higher than the coverage level most commonly-selected by our New York customers. In making your decision as to whether this is the right amount of coverage for you, you’ll want to consider the factors identified above as well as any other factors you consider relevant.
What are Liability Split limits?
Split limits are the liability limits of your automobile policy. Split limits may appear as 50,000/100,000/50,000. This means that you have $50,000 in Bodily Injury coverage per person, $100,000 Bodily Injury coverage per accident and $50,000 in Property Damage coverage. For example: John Doe’s car skids on ice and hits another car. Passengers in the other car are injured. If the passengers were to file lawsuits, the most each could receive would be $50,000 per person, and no more than $100,000 total for all passengers. The Property Damage portion of John’s policy would cover the damage he caused to the other vehicle.
What is Uninsured Motorist Bodily Injury Coverage?
Unfortunately, not every driver on the road maintains insurance coverage, even though the law of most states requires drivers to carry liability insurance. And, of those who do carry liability insurance, many have very low coverage limits.
If you were injured in an automobile accident by a negligent uninsured or underinsured driver, would you need some help meeting your medical expenses and financial obligations? Generally, Uninsured Motorist Bodily Injury coverage provides coverage in the event you (or other persons insured under this coverage) are injured in a covered accident caused by a negligent uninsured or underinsured driver.*
*Some of the factors you’ll want to consider when making your coverage buying decision include: the high cost of health care, any health insurance plan (s) you have, your ability to make ends meet if you are out of work for an extended period, any short-term and/or long-term disability plan (s) you may have, your need to protect your savings for retirement and/or education, the cost of higher coverage limits, and the amount of assets you may have to liquidate to sustain you while you heal.
Many insurance consumers purchase Uninsured Motorist Bodily Injury coverage with coverage limits equal to their Bodily Injury Liability coverage limits. After considering the factors identified above, together with any other factors you think are relevant to your specific situation, you ay decide that limits of $500,000/$1,000,000 are right for you.
What is Personal Injury Protection– No Fault Coverage?
Personal Injury Protection (PIP) Coverage, also known as No-Fault coverage, typically provides coverage for reasonable and necessary medical expenses, income loss, other expenses, and death benefits for persons who are injured as a result of a covered accident. The Basic New York PIP plan covers:
· You, your spouse, and relatives living with you (for injuries sustained in motor vehicle accidents which occur either in or out of state), and
· Guest passengers and pedestrians (for injuries arising from accidents occurring in New York State only) And includes the following benefits (subject to an aggregate limit):
· Medical Expenses– reasonable and necessary expenses incurred for the care, recovery or rehabilitation of the injured person
· Work Loss– wages you would have earned if you had not been hurt (subject to maximum monthly amount and time period)
· Other Expenses– expenses for services you are no longer able to provide for yourself or your family because you are injured, such as housekeeping and yard work (subject to maximum daily amount and time period)
· Death Benefit– up to a specified limit per person
Note: the applicable limits for each of the above are established by New York law and may be adjusted periodically.
Options also exist which allow you to customize your PIP coverage to suit your individual needs an/or save on your insurance premiums. For example,
· You can choose to waive the medical expense portion of this coverage, if you have a current health care carrier who will provide this benefit.
· You can elect to have your employer’s wage continuation plan provide you primary income continuation benefit, with your PIP policy as secondary coverage.
· You may specify a deductible. A deductible is the portion of a covered loss that you pay before the insurance company makes payment under the policy. A higher deductible usually means a lower premium.
Some of the factors you’ll want to consider when making your decision to purchase Personal Injury Protection and in selecting your deductible include: the high cost of health care, your ability to pay for medical expenses out of your own pocket, any health insurance plan (s) you have, your ability to make ends meet if you are out of work for an extended period, any short-term or long-term disability plans you may have, any deductibles, co-pay arrangements, and/or waiting periods which may apply to your existing plan (s) and the cost of the different deductible options.
Even though you have a health insurance plan, you are required by law to carry PIP coverage. Additionally PIP can offer supplementary benefits (Work Loss, Other Expenses, etc.), likely not available through your health insurance provider, which you may find reassuring in your overall protection plan.
Since New York law both mandates PIP coverage, and specifies the limits of that coverage, the main decision you face isn't whether to purchase PIP, but how to customize it to best suit your needs:
· For example, if your health insurance provider certifies that they can provide the mandatory PIP benefits as required by law, then you may be able to waive the medical expenses portion of this coverage, and receive a premium credit. But, before making this decision, you will want to consider carefully who is covered under your health insurance policy, the extent of the coverage provided, and the importance of maintaining your policy (this may be a particularly important consideration if your health insurance is provided through your employer).
· Another decision you face involves the deductible option. You might elect (as many of our policyholders do), to carry a $200 deductible. Such a selection would help keep your premiums lower without significantly impacting your potential out-of-pocket costs.
Note– Additional PIP: A separate, optional coverage– Additional PIP– is also available for your your consideration. Additional PIP provides a very cost-effective means of increasing your PIP limits over the basic level required by law and/or extending coverage to guest passengers out of state. Many of our New York customers choose to purchase Additional PIP for the added benefits it provides. You may want to consider whether this coverage would be of value to you.
What is Collision Coverage?
This coverage helps pay for damage to an insured auto as a result of a covered accident with another car, or a covered collision with most anything else (such as a tree). *If your auto were damaged in an auto accident, could you afford to repair it?
A deductible—the amount of loss you’ve agreed to pay out of your pocket before the insurance company pays for any covered losses—applies to this coverage.
*Some of the factors you’ll want to consider when making your decision to purchase Collision coverage and in selecting your deductible include: the age and value of your vehicle, your ability to pay for repairs out of your won pocket, and the cost of the different deductible options. If you purchase this coverage, remember that the higher you set your deductible, the lower your rate fir this coverage will be, but the more you’ll have to pay out of your own pocket in the event of a loss.
Given the age and value of your vehicle, you may want to consider purchasing Collision coverage with a deductible of $500. this deductible amount would provide protection against more significant losses while keeping your premiums lower.
Other deductible amounts are available to you. You can opt to have a lower deductible, but a lower deductible will increase your premium. By carrying a higher deductible, you’ll save premium dollars—dollars which you may decide are better spent on other coverages.
What is Comprehensive Coverage ?
Comprehensive coverage helps pay for damage to an insured auto not cause by collision. This coverage typically includes, among other things, coverage for damage caused by falling objects, hail, fire, theft and vandalism, explosion, and earthquake. * As with Collision coverage, a deductible you choose will apply.
*Your decision regarding Comprehensive coverage will be influenced by many of the same factors you consider when evaluating Collision coverage: the age and value of your vehicle, your ability to pay for repairs out of your own pocket, and the cost of the different deductible options. If you purchase this coverage, remember that the higher you set your deductible, the lower your rate for this coverage will be, but the more you’ll have to pay out of your own pocket in the event of a loss.
Some consumers prefer to minimize their potential out-of-pocket expenses for the types of losses which Comprehensive would cover. It is, therefore, a fairly common practice to select a deductible for Comprehensive coverage that is lower than that for Collision coverage. With this in mind, you may wish to consider whether a $250 deductible for Comprehensive coverage is right for you. Higher and lower deductible amounts are, however, available for your consideration.
What is Supplemental Spousal Liability Insurance?
Supplemental Spousal Liability Insurance means coverage against liability of an insured because of death or injuries to his or her spouse up to the liability insurance limits provided under the policy even where the injured spouse, to be entitled to recover, must provide the culpable conduct of the insured spouse.
Ryde Insurance Agency