Auto

When you buy an auto insurance policy, you are buying a package of individual coverages. Each coverage protects you against different types of losses. Once you understand the various coverages, you can decide which ones to include in your personal insurance package. You can also determine the limits of coverage you will need. The following are some common coverages found in an auto policy. NOTE – Your policy may not contain all of these coverages.

Bodily Injury (BI) Liability– Coverage pays, up to the coverage limits, for damages due to injury or death of others in a vehicle accident for which you or the operator of your vehicle are legally responsible. It also pays your legal defense costs. In Texas the minimum required BI liability limits are $30,000 per person and $60,000 per accident.

Property Damage (PD) Liability– Coverage pays, up to the coverage limits, for another individual’s vehicle or property that has been damaged in an accident for which you or the operator of your vehicle is legally responsible. In Texas the minimum required PD liability limit is $25,000.

Medical Payments– Coverage pays, up to the coverage limits, for reasonable and necessary doctor, hospital and funeral expenses for you and your passengers injured or killed in an accident, regardless of who is at fault. Payments are usually limited to one to three years after the accident. This coverage can be waived in Texas.

Personal Injury Protection – Like Medical Payments, this coverage pays, up to the coverage limits, for reasonable and necessary doctor, hospital and funeral expenses for you and your passengers injured or killed in an accident, regardless of who is at fault. Also included, up to the coverage limits, is the payment for lost wages while you are off from work. Payments are usually limited to one to three years after the accident. This coverage can be waived in Texas.

Uninsured/Underinsured Motorists (UM/UIM)– Coverage pays up to the coverage limits for pain and suffering which is not covered by medical, disability and PIP. Underinsured motorist coverage pays for bodily injury to you or your family resulting from the negligence of someone whose liability insurance limits are insufficient. This coverage can be waived in Texas.

Collision – Coverage pays, up to the coverage limits, for damage to your vehicle or a vehicle you are operating caused by a collision or rollover. This coverage is usually required if you have a vehicle loan.

Comprehensive Physical Damage – Coverage pays, up to the coverage limits, for damage to your vehicle or any vehicle in your custody resulting from theft, fire, vandalism, flooding, hail or other perils (but not damage by collision or overturning). It is usually required if you have a vehicle loan.

Rental Reimbursement– Coverage pays up to a specified amount for rental vehicle charges while your vehicle is being repaired for damage covered under your policy. If you prefer not to incur the cost of renting a vehicle yourself and cannot be without a vehicle while yours is being repaired, you might consider this coverage.

Towing and Labor– This covers some costs incurred for services rendered at the place of breakdown or for towing to a repair shop. It covers the delivery of gas, oil or a battery, but not the cost of these items. If you lock the keys in the vehicle or need a tire changed, this may also be covered. These services are often included in auto club memberships, which can result in unnecessary duplicate coverage.