| The auto insurance
"commodity" is actually a product
with six distinct coverages:
Let's look at them here.
1. Bodily
Injury Liability - It pays the medical
and other expenses of those people injured or
even killed in accidents you cause. This is
required by most states; the mandatory coverage
in Ohio is $12,500 for any person involved in
an accident with you and no more than $25,000
for all the persons in the accident.
2. Property Damage Liability
- It covers the damage your car causes to property.
Usually, that's the other car or cars involved
in the accident, but it also covers damage you
do to any object you hit. Garages, buildings,
lampposts, fences, whatever. This is also required
in most states; the mandatory limit in Ohio
is $7,500.
3. Collision - This is for
damage done to your car when it collides with
other vehicles (your fault) or other objects
(again, your fault).
4. Comprehensive - This covers
damage to your car that results from something
other than a collision with another vehicle.
An example is damage caused by vandals or a
wind-blown tree hitting your car. It also includes
coverage for theft.
5. Medical Payments - It pays
medical, and even funeral, expenses for you
as well as members of your family and passengers
in your car if it is involved in a collision,
regardless of who caused the accident. It also
covers you as a pedestrian if you are hit by
a vehicle.
6. Uninsured/Underinsured Motorist
- This pays for injuries to you and, in some
policies, damage to your car if you are hit
by a driver who doesn't have insurance - or
by someone who doesn't have enough insurance
to cover your losses. In most states, more than
10% of motorists don't have any insurance. In
some states, as many as 3 out of 10 drivers
don't have coverage.
Many of those who do have insurance don't have
enough to cover the damages and injuries that
would result in a major collision. If you don't
have this coverage, which is often referred
to as UM/UIM, you are taking a risk. UM/UIM
also provides coverage for any injuries you
suffer if you are hit while walking or riding
a bicycle by a driver with inadequate or no
insurance.
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