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At the Merriam
Agency, we speak
ordinary English
when you call,
but there are
times when we do
need to use
insurance terms.
We’ve created a
glossary here to
help you
translate some
of that
insurance jargon
into something
everyone can
understand. We
hope you find it
helpful. The
following are
terms are
associated with
an Automobile
Policy.
Liability:
A
person's
responsibility
to another for
injury he/she
caused or
damages he/she
caused to
another’s
property.
Bodily Injury:
(aka the two
letters, "BI")
Your
insurance
company will pay
for Bodily
Injury to
another that you
are legally
responsible for
because of an
accident. The
limits are
usually shown as
100/300. This
means that the
policy will pay
up to $100,000
per person and
up to a maximum
of $300,000 for
any one accident
resulting in
Bodily Injury.
Some insurance
companies offer
a Single Limit
of Liability
such as $300,000
which means they
will pay up to a
maximum of
$300,000 for any
one accident for
Bodily Injury
and/or Property
Damage.
Property Damage
Injury:
(aka the two
letters, "PD")
Your
policy will pay
up to the limit
stated in the
policy, say,
$100,000 for
damage to some
else's property
that you cause
in an accident.
Personal Injury
Protection:
(aka "No-Fault",
or "PIP")
This one's for
YOU! In NY you
must buy $50,000
of PIP. This
varies by
company-NYCM
Drive can only
go to $125,000.
This necessary
medical and
rehabilitation
expenses, 80% of
last earnings
from work up to
$2,000 for Work
Loss, a $2,000
Death Benefit
and $25/day for
Essential
Services. This
is paid to YOU
by YOUR
insurance
company for
injuries you or
your
passenger(s)
sustain in an
accident. (It
also covers you
if you are a
pedestrian who
is injured by a
hit-and-run
driver).
WAIT A
MINUTE!
You just
said I had to
buy Liability
coverage for
Bodily Injury I
caused someone
else, doesn't
everybody have
to buy it? I can
collect from the
person who
caused my
injury, why do I
need Personal
Injury
Protection?
GOOD
QUESTION!
In an effort to
unclog the court
system and keep
it that way, the
Personal Injury
Protection
coverage was
created so that
people can have
minor injuries
paid for by
their own
insurance
company,
regardless of
who is at fault
in an accident.
(Thus, the term:
No Fault). If
death,
disability,
disfigurement or
fracture occur,
a suit can be
brought and then
the Bodily
Injury Liability
coverage of the
person who
caused the
accident will
pay.
Medical
Payments:
This
coverage is in
addition to PIP
and will pay up
to the amount
shown on the
policy, for
necessary and
reasonable
medical expenses
incurred by you
or an occupant
of your vehicle,
if accident
occurs involving
your car. If you
are charged with
DWI or DWAI at
the time of an
accident, your
PIP coverage
will not pay.
The only
recourse for
medical expenses
may be this
coverage. The
coverage is
relatively
inexpensive.
Deductible:
You
agree to be
responsible for
when "Other
than Collision" coverage is
used.
Deductibles can
range from $50
to not all -
offer $2500. The
higher the
deductible
amount you
choose, the
lower the
premium is for
that coverage.
Other than
Collision:
(aka
"Comprehensive")
This coverage is
for your car(s).
It always has a
deductible for
any claim that
is made. It will
pay for
accidental
damage. If your
car is stolen,
vandalized, bums
in a fire, if
any of the glass
gets cracked,
even if your dog
eats the
upholstery, your
insurance
company will pay
for the damage.
You can buy it
with a ZERO
deductible for
damage to any of
the glass,
including the
windshield (this
is called "Full
Glass
Coverage"). The
price for this
coverage is
generally based
upon the value
of the vehicle
insured.
Collision:
This coverage
has a
deductible. If
your car is
damaged by
colliding with
another vehicle
or a fixed
object, if your
car overturns or
is damaged by a
hit-and-run
driver, this
coverage will
pay for your
damage. One
advantage to
this coverage is
that when an
accident occurs
that was caused
by another car,
you can get your
car fixed right
away by
collecting the
damage expenses
from your own
insurance
company (less
your
deductible).
Then your
insurance
company will
attempt to
collect from the
insurance
company of the
responsible
party. If and
when they do,
your deductible
will be returned
to you.
Roadside
Assistance:
(aka "Towing &
Labor')
Insurance
companies
provide
coverage.
ANYTIME your car
needs to be
towed, for ANY
REASON, up to
the limit you
choose. The cost
and limits
available vary
by company.
Other than
Collision
coverage must be
purchased along
with this
coverage.
Transportation
Expenses or
Rental
Reimbursement:
This coverage
pays a flat
amount per day
toward renting a
car if your own
car is not
drivable due to
the damage it
suffered in a
covered
accident. You
can buy
amounts-from $15
to $100 per day
up to a maximum
of 30 days of
coverage.
Credits:
There are many
credits
available on an
Automobile
Policy:
Anti-Lock Brakes
, Air Bags or
Automatic Seat
Belts
Anti-Theft
Devices ,
Defensive
Driving Course
Credit, Mature
Driver Credit,
Account Credit,
Glass Etching
(When auto &
home policies
are in same
company),
Daytime Running
Lights, Students
over 100 miles
from home, Good
Driver Discount
(accident free
for a certain
number of
years), Renewal
or Retention
Credit (after a
certain number
of years w/same
ins. company).
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