Glossary of Terms

Auto insurance coverage terms can be confusing. It is hard to know what types of losses are covered by which type of coverage. We have provided a few definitions to help clarify auto coverages. In addition, our auto specialists are always willing to explain coverage and assist you in making an informed insurance-buying decision.

Liability. Pays damages due to bodily injury and property damage to others you are responsible for. Bodily injury damages include medical expenses, pain and suffering, and lost wages. Property damage includes damaged property and loss of use of property. If you are sued, it also pays your defense and court costs. State laws usually determine minimum amounts, but higher amounts are available.

Personal injury protection. Required in some (no-fault) states, it is optional in others. Pays you or your passengers regardless of fault for medical treatment due to a car accident. It may also pay for rehabilitation, lost earnings, replacement of services (child care if a parent is disabled, for example) and funeral expenses. Minimum amounts are usually set by state law.

Medical payments. Available in non-no-fault states and pays regardless of fault. Pays for an insured's reasonable and necessary medical and funeral expenses for bodily injury from a car accident. Generally, $1,000 minimum amounts are offered; higher amounts are available. It may be supplemented with other coverages that pay for loss of earnings, total disability or death.

Collision. Pays for a covered car damaged by collision with another object or by upset of the car. A deductible is required.

Comprehensive. Pays for a covered car stolen or damaged by causes other than collision or upset, such as fire, wind, hail, floor, or vandalism. A deductible is not required.

Uninsured motorist. Pays damages when an insured is injured in a car accident caused by another person who does not have liability insurance. Application of this coverage varies by state and depends upon policy provisions.

Underinsured motorist. Pays damages when an insured is injured in a car accident caused by another person who has insufficient liability insurance. Application of this coverage varies by state and depends upon policy provisions.