Auto Insurance Basics
The terms and definitions you’ll need to be a smart auto insurance shopper

How do you know what coverage is right for you? First, you need to know the same information the auto insurance companies know — the terminology they use and the explanations of the coverage offered. *

Bodily Injury Liability (BIL)

Protects you and your assets when you are legally liable for the injury or death of others due to an auto accident. Also covers your legal and court costs. The split limits for this coverage refer to the maximum amount the insurance company will pay in the event of a claim. For example, $100,000/$300,000 means the company will pay up to $100,000 to each injured person, but not more than a total cost of $300,000 per accident. Bodily Injury Liability coverage is mandatory in most states, although minimum limits vary.

Property Damage Liability (PD)

Pays to repair or replace another person’s property when you are responsible for the damage due to an auto accident. For example, $50,000 coverage means the company will pay up to $50,000 for damages to the other persons property, such as their auto, a tree, wall or other object that has been damaged.

Personal Injury Protection (PIP)

This pays for reasonable and necessary medical, dental, hospital and rehabilitation expenses related to you, occupants of your vehicle and pedestrians. This coverage is mandatory in many states and higher coverage is generally available. Minimum limits vary by state.

Medical Payments

Pays medical bills and other related costs for you and household relatives, regardless of who is at fault in the accident.

Uninsured/Underinsured Motorists

Protects you and others in your vehicle if you are injured by a driver who does not have liability insurance; a driver who is under-insured; or in a hit-and-run by a driver who is held legally responsible for your injuries. In some states this coverage may be offered separately or packaged together. It is sometimes called Supplementary Uninsured/Underinsured Motorist (SUM).

Comprehensive

Optional coverage that pays for loss or damage to your vehicle caused by fire, theft, vandalism, storm, riot, falling objects, floods and other causes. For example, if your auto is stolen and not recovered, the company will pay the actual cash value of the auto minus your selected deductible amount. The company pays regardless of fault.

Collision

Optional coverage that pays for damage to your vehicle caused by a collision with another object. For example, if your auto is damaged in an accident, the company will pay up to the actual cash value of the auto minus your selected deductible amount. The company pays regardless of fault.

Towing & Labor

Optional coverage that pays up to a specified amount for towing and labor if your vehicle is disabled.

Extended Transportation Expenses

Optional coverage that pays for renting a car if you have a loss covered by the Comprehensive or Collision coverage and, generally, if the vehicle is disabled for longer than 24 hours.

* Unless specifically noted, the coverage available in your state may be mandatory, optional, or may be packaged differently. Check with your insurance company or State Insurance Department for the requirements in your area and for the minimum level of coverage that may be required in your state.

*All features, discounts, benefits and payment plans are not available in all states or in all operating companies.