Program set up by various states to ensure that everyone with a valid drivers license will be able to purchase auto insurance. All auto insurers operating within a state are assigned insureds in proportion to the amount of auto premium written.

There are basically six major coverage parts of the standard automobile insurance policy. Liability coverage is often required by law. Physical damage coverage may be required by a lien holder.The six coverage parts are:2.400

Bodily Injury Liability

This coverage pays medical, loss of income, and related expenses the insured is responsible for due to an act of negligence involving an automobile. For example, if the insured runs a stop sign and hits an oncoming vehicle, injuring an occupant, the bodily injury portion of the coverage pays the injured third party. Bodily injury coverage may be expressed in split or single limits. Split limits may be written as 25,000/50,000 and is translated as coverage that will pay up to $25,000 per person to a maximum of $50,000 per accident. A single limit of $50,000 pays up to $50,000 for any one accident with no per person limit.

This coverage pays a third party for damage to his or her property caused by the negligence of the insured. This includes negligently damaging someone else’s automobile or running into someone’s house.

Property Damage Liability

Medical Payments Coverage or Personal Injury Protection (PIP)

Liability insurance pays third parties and this coverage pays medical expenses for the policyholder and others in the insured’s vehicle. The coverage is often much less than liability insurance and pays regardless of fault.

Collision Insurance

Collision pays for damages to the policyholder’s vehicle due to collision with an object. It pays regardless of fault.

Comprehensive Insurance

Comprehensive coverage is for physical damage to a vehicle for perils other than collision with an object. This includes fire, explosion, food, theft, and glass breakage.

Uninsured Motorists Coverage

policyholder, up to the limits

This coverage pays the chosen, for costs that result from an accident with a hitand-run driver or an uninsured or underinsured driver. Uninsured motorists can be written to cover bodily injury in all states and property damage in many states. Two other forms of coverage commonly found in the standard automobile policy are towing and rental reimbursement. Towing pays for the cost of towing the vehicle due to mechanical breakdown, getting stuck in weather, or an accident. Rental reimbursement pays the cost of a rental car for the insured while an insured vehicle is being repaired.

iNSURANCE Coverage on the vehicle for physical damages to the vehicle itself. This Coverage usually is broken down into collision and other than collision coverages, and is part of the commercial auto or personal auto policy.