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Liability coverage is protection for damages YOU do to other people and property. It is expressed in either single limit or split limit terms. Single limit means that you are buying one lump sum of coverage to protect against damage to other people AND property. Split limits refer to damage to other people and then another number for property damage. Property damage is damage to the car you just rear-ended, or a telephone pole that you ran into. Bodily injury is the damage to people. Split limits, quite often will be expressed as 100,/300,/100,. This limit would mean that you have $100,000 coverage PER PERSON, with a TOTAL in any one accident of $300,000. for damage to people. Reduced further, you could theoretically run into a car containing 3 people and each of them could collect a maximum of $100,000 and a GRAND total of $300,000. for damages sustained in the accident. The last $100,000. refers to property damage. Single limit is pretty self explanatory.
If your state requires lower limits than another state, and you travel into that state, your policy automatically conforms to the other states requirements.
Now comes the $1Mil question.... "How Much Should I Carry?" Obviously, the higher the limit, the more expensive. And you have to consider the state you live in. Most, is not all have minimum limits you must carry. Consider... Even if you are a student that has no assets, just because your policy pays out it's maximum, you may still be responsible for anything OVER that! And your FUTURE earnings may be levied against until such a debt is paid. So there are reasons, beyond commission dollars that an agent may recommend higher coverages. If you don't have a pot to pee in and probably never will, then you may be all set with the state minimum. If you think that you do or will have a nice pot some day, well, now is a good time to think about that. MOST losses are less than $100,000. I have had clients involved in losses over that, as I recall, 5 times. Each had sufficient limits, thank goodness! It really is a question you must answer in good conscious when considering the premium versus the possible loss.
NO-Fault Coverages vary from state to state, so you need to do a little research here on your state recs. I am going to answer this, as if we were dealing with NY State only. Coverage is available up to $175,000. and gives you coverage for any medical bills AND lost wages up to the limit. If you already have a health insurance plan and good disability coverage, you can be a little cheap here. Your NF will always be taken first and your health insurance last. If you don't have any other coverage for this type of loss, this is a cheap place to get it for any loss involving an auto accident. Can be as minor as shutting your thumb in the door, to a full blown traffic accident.
This will cover not only you, but any passengers... And would even cover you as a pedestrian. In NY, if your child is on a school bus, the NF on YOUR car covers them in a bus accident... How 'bout that? I'm trying to make it somewhat interesting at least.... :)
Medical Payments cover you for any medical expense due to an accident that may not be covered under NF above... OK, so what do I need NF for? Well, NF covers wages too. And it is higher coverage, but if you are under the influence, NF excludes you from ANY coverage. Med Pay is so cheap, that you really should have it. It is about $2 for $10,000 of coverage and will be excess over NF. If you EVER drink and drive, it is a must have. Even if you don't, consider it.
Uninsured/Underinsured Motorist coverages come into play when you are involved in an accident that is NOT your fault and the other party doesn't have any insurance, or has less coverage than you carry here. You will, in essence, sue your own insurance company, as if they were the carrier for the other party.
There is a new endorsement (again, in NYS) that now allows a spouse to sue the other spouse, who was operating the vehicle that hurt them and collect against their own insurance, much as with UM. But it is a separate limit and must be purchased separately. It is called Spousal Liability.
Those are pretty much the statutory coverages. Now we deal with coverage on your car.
