Coverage Parts of an Auto Insurance Policy

| Auto insurance, Risk Management.

coverage parts of an auto insurance policy

At Safeguard Insurance, we think it is critically important for our customers to understand what coverage is provided by their insurance policies before a claim occurs.   That is especially true of an auto insurance policy, which has many coverage parts and optional endorsements.   Let’s examine the various parts an auto insurance policy, in this case, the standard ISO 2005 form (PP0001 01/05).

Auto Insurance Coverage Parts

The first section of the personal auto insurance policy defines terms that are used frequently in the contract verbiage.   Defined terms include who is an insured, what is a covered auto, and the policy coverage territory.

The remainder of the policy is divided into sections, or parts, from A to F:

Part A:   Liability Coverage
Part B:   Medical Payments
Part C:   Uninsured Motorist Coverage
Part D:   Coverage for Damage to Your Auto
Part E:   Duties After An Accident or Loss
Part F:   General Provisions

Part A: Liability Coverage

To be liable is to have a legal responsibility to another party.  In the case of auto insurance, it is a legal responsibility for injuries or damages caused by an auto accident.  Auto liability coverage is provided either using a “split” limit of coverage or a “combined single limit”.   A split limit provides a specified amount of bodily injury coverage per person, per accident and for property damage.  Auto liability is the coverage that pays when you are at-fault in an automobile accident.   It is critically important you carry adequate limits of liability coverage to protect yourself in the event of a serious car accident.

Part B: Medical Payments

Regardless of fault, medical payments coverage pays for minor medical bills (including funeral expenses) sustained by any insured.  This coverage also applies if you are a pedestrian struck by a motor vehicle, or while occupying a non-owned vehicle.   Passengers in your covered auto are also covered by medical payments.  This coverage often has a time limit for claims to be filed.  In the case of the ISO policy form, the limit is 3 years from the date of the accident.

Part C: Uninsured Motorist Coverage

In Nevada, uninsured motorist coverage also includes underinsured motorist coverage.   This provides for bodily injury coverage to the insured caused by a driver who is either completely uninsured or who has inadequate limits of coverage for the injuries sustained.

Part D: Coverage for Damage to Your Auto

Often referred to as collision and “other than collision” coverage, this section provides coverage for damage to the insured vehicles.  Collision damage means a rollover or impact with an object or another vehicle.   “Other than collision” includes perils such as theft, fire, vandalism, contact with birds or animals, glass breakage, flood, hail, and falling or moving objects.   This coverage section may also include coverage for rental vehicle expenses and roadside assistance.

Part E: Duties After an Accident or Loss

This section specifies the responsibilities of the insured to notify the insurance carrier promptly of any accident or other claim.  It also requires the insured to cooperate with the investigation and provide copies of documents relevant to the claim.   The insurance carrier may also require a physical examination by a physician of their choosing to substantiate bodily injury claims.

Part F: General Provisions

The general provisions section discuss many important aspects of auto insurance coverage including how a policy can be endorsed, how and when coverage can be canceled or non-renewed, and the insurance company’s rights to subrogate damages to another person or party.  The general provisions section also specifies the coverage territory (typically the United States and Canada but NOT Mexico) and verbiage that warns coverage is null and void in the event of fraud by the insured.

Understanding Your Nevada Auto Insurance Policy

You should always take the time to read your insurance policies.  Yes, we know that’s not an exciting way to spend your evening.   However, the worst time to discover gaps in your insurance coverage is at the time you file a claim.   It is critical you understand your auto insurance, and other policies before something bad happens.

If you have questions about any of your insurance policies, contact Safeguard Insurance for a no-obligation policy review.

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