More Than You Ever Wanted to Know About Insurance
Motor Vehicle Collision – More than You Ever wanted To Know About Insurance
If you have ever been in a motor vehicle collision you know that sorting through the various insurance coverages and understanding which insurer is responsible for what bills can be confusing. The coverage on your vehicle and that of the other vehicle involved in the wreck is broken down into as many as five different components and there may be a different adjuster assigned by the insurance company for each of these components coverages.
The available components of a motor vehicle policy are as follows:
Liability- if it is determined that you are at fault this pays the injured party for their medical bills, lost wages and pain and suffering, and damage to their property caused by you.
Collision- this component of your policy will reimburse you for any property damage to your vehicle from the motor vehicle collision less whatever deductible the policy contains.
Personal Injury Protection- Also known as PIP or med pay, this provides medical and hospital benefits, income disability, and accidental death benefits regardless of fault to you, your family living in your household and any passengers in your vehicle. This coverage is valuable because even if the other party is clearly at fault it may be some time before their insurer begins to pay for the bills you incur. This coverage will begin to pay very quickly.
Uninsured Motorist Coverage – (UM) This coverage is much as it sounds. If the other party is at fault in the wreck but they do not have the required liability insurance to reimburse you for your injuries, this coverage will do so.
Underinsured Motorist Coverage- (UIM) Again this coverage mirrors its name. If the other party is at fault and your injuries exceed the amount of their liability insurance this coverage from your policy then kicks in to pick up the slack.
I have given you simple definitions of the basic types of coverage under motor vehicle insurance policy. There are myriad of interactions between these policies, the policies the other driver has in effect and your health insurance policy. For example although your PIP policy may pay some or all of your bills immediately, it may seek repayment (known as subrogation) from the liability insurance of the other party if they are at fault. The same goes for your health insurer.
If you are a passenger in a friend’s vehicle and are injured in a wreck you may be covered under their PIP, but you may also be covered under your own – who pays? I will explain some of these interactions in future posts.