Practical Personal Auto Insurance 101 For Dummies

personal auto insurance

Personal auto insurance is often confusing for a lot of people especially regarding the terms used in the policy and the coverage provided in the policy. Whether you live in Philadelphia, on the Main Line or the surrounding area, here’s an abridged simplified version of the coverage you may or may not be purchasing.

Liability Coverage
The amount of money your personal auto insurance policy will pay to a third party (the other person involved in an accident). That is to say; limited coverage helps if you’re responsible for their injuries or property damage. Most companies offer a maximum coverage of $250,000 per person/$500,000 per accident/$100,000 property damage.

Tort Option
In Pennsylvania, you purchase the right to sue the other person if they injure you in an auto accident. However, the “Full Tort” Option is more expensive. It allows you to sue for almost any injury you suffer in a car accident where the other driver is responsible. On the other hand, the “Limited Tort” Option severely restricts your right to sue for an injury. In a lot of cases, you must suffer a permanent disability before you can sue.

Medical Payments
The amount of money your auto insurance policy will pay for your medical expenses as a result of a car accident. You can purchase as low as $5,000 coverage or as much as $1,100,000 coverage.

Work Loss Benefits
Will pay you a fixed amount of money if you are unable to work as a result of an auto accident. This coverage is optional. Maximum coverage of $2,500 per month/$50,000 is available.

Funeral Expense Benefit
This benefit pays for funeral expenses as a result of an auto accident. This coverage is optional. A maximum benefit of $2,500 is available.

Accidental Death Benefit
Will pay up to $25,000 as a result of dying in a car accident. This coverage is optional.

Uninsured Motorist
Coverage for the driver who is hit by someone uninsured. In other words, it’ll pay for injuries to you if the other driver has no insurance. This coverage is critical as over half the drivers in Philadelphia don’t have auto insurance

Underinsured Motorist
Coverage for the driver who gets hit by someone who does not have enough liability insurance. Uninsured motorist and underinsured motorist can be stacked depending on the number of cars insured on the policy.

Will pay to repair your car if you collide with another driver or hit a fixed object. For example, a tree is a fixed object.

Pays for damage to your car for items other than collision such as theft, flooding, a tree falling on the car, hitting a deer, etc.

Furthermore, optional coverages for a personal auto insurance policy near you include:

  • rental reimbursement
  • car rental for up to 30 days while your vehicle gets fixed as a result of an accident
  • towing coverage which will pay a fixed amount if your car gets towed after an accident

Check your auto insurance rates with your property and casualty insurance agency.