Liability - In the event of an accident that is your fault, this is what protects you, should you be sued as a result of that accident. Bear in mind there are several law firms advertising on TV and in newspapers asking people to call them if they have ever been in an accident. Literally, they are asking people to help them sue YOU. This portion of your auto policy is what protects you from these lawsuits, both the money you are found legally obligated to pay as well as legal defense costs. It is vitally important that you purchase adequate insurance limits because the insurance stops paying and the legal defensse ends when the amount of insurance coverage you purcahsed is used up. As an example of how important adequate coverage limits are, consider this small example: - The NY State minimum for bodily injury liability is $25,000 per person, $50,000 per accident. In an accident, you are at fault and an entire family is injured in an accident. The wife is in a coma, the husband becomes a quadraplegic, and there are young children needing a full-time provider. Admittedly, the NY minimum limits are not going to provide you with adequate protection. There are two portions to the liability coverage - bodily injury and property damage. This can be purchased in what is called "Split Limits" (a separate limit shows for bodily injury and for property damage), and CSL, or "Combined Single Limits" (where the limit for bodily injury and property damage is combined).
PIP (Personal Injury Protection) - also known as "no-fault" insurance coverage, this is what provides medical coverage for you and all occupants of your auto should you be hurt in, on, getting in or out of your auto. New York State law states $50,000 must be carried as a minimum. You also have the option of buying an additional $25,000 or $50,000 or even $100,000 in additional PIP coverage. Other coverages included in PIP are work-loss coordination money as well as death benefit provisions.
SUM (Supplementary Uninsured/Underinsured Motorist Coverage) - This coverage works in reverse of liability insurance. This protects you in the event of an accident that is the fault of the other driver. To collect on the "uninsured" portion, the accident must be the fault of the other driver, and the other driver must have NO insurance in effect at the time of the accident. Coverage is limited to the amount of coverage you purchased (for example, you could not collect $100,000 in uninsured costs if you only carry $50,000 in SUM coverage). To collect on the "underinsured" portion, you must carry limits that exceed the limits the other driver carried. (For example, if you carry $100,000 SUM coverage and you are in an accident that is the fault of the other driver, you could collect under the "underinsured" portion if that at-fault driver had limits less than the $100,000. If the driver had limits of $100,000 or greater, there is no "underinsured" claim, because the other driver had limits equal to or greater than what you established as a minimum insured limit). Therefore, it is important you carry SUM limits that adequately address those needs - the established norm is to carry limits that match your liability limits. In other words, if you carry $500,000 liability coverage, you should carry $500,000 in SUM coverage.
OBEL (Optional Basic Economic Loss) - This is an optional coverage. If you purchase this coverage, it provides an additional $25,000 coverage in addition to you PIP limits. An added benefit is that it gives YOU the option of directing to the insurance company how to apply it. You have the right to specify to the company whether to increase the the medical coverage limits, apply it to loss earnings from work coverage, or even psychiatric, physical or occupational therapy and rehabilitation.
Collission - This is an optional coverage. This provides coverage for damage to your car following a collision with a fixed object (another car, a tree, ditch, etc).
Comprehensive - This is an optional coverage. This provides coverage for damage to your vehicle following losses other than a collision loss. Some examples of coverage include striking an animal, the car is damaged by fire, by hailstorm, a tree falls on it, it is stolen, etc. FULL GLASS COVERAGE is often attached to this coverage. This means there is no deductible for a broken windshield.
