A basic no-fault insurance policy has state mandated coverage in three parts: personal injury protection, property protection, and residual bodily injury/property damage liability insurance. It does not pay for vehicle repairs, replacement of stolen vehicles, or “mini-tort” liability. Your policy is also limited by the amount of coverage you choose to purchase. For example, state minimum coverage will pay up to $20,000.00 for a person who an insured hurts or kills in an accident, up to $40,000.00 for each accident if several people are hurt or killed, and up to $10,000.00 for damaged property other than vehicles. If you think this doesn’t sound like very much protection, you’re right. And if you’re underinsured, you could be personally responsible for damages not covered by your insurance.
So what can you do to protect yourself? Purchase additional insurance coverage. The most common types of additional coverage are residual liability insurance with increased limits, physical damage insurance for your vehicle, also known as collision and comprehensive coverage, limited property damage liability insurance (“mini-tort”), uninsured motorist coverage and underinsured motorist coverage.
- Residual liability coverage with increased limits are very common and used by many to supplement the state minimum coverage amounts listed above. They are available in a variety of amounts. Collision insurance coverage pays to repair or replace your car if it is damaged in an accident, while comprehensive insurance coverage pays to repair or replace your car if it is stolen or damaged by an animal, falling objects, vandalism, acts of god, etc. Collision coverage almost always has a deductible but may include broad coverage regardless of fault or limited coverage based on fault. Limited property damage liability or “mini-tort” coverage protects you from being sued for damages to another person’s vehicle when you are at fault in the accident. Uninsured motorist coverage compensates you for pain and suffering and excess wage loss if you’re the victim in a hit and run or if the other driver doesn’t have insurance. Underinsured motorist coverage compensates you for pain and suffering and excess wage loss if the other driver has less bodily injury liability coverage than what you’ve protected yourself with under your policy. You can learn more about the additional coverage options available to you by calling your auto insurance agent, but you have to ask! Each auto insurance carrier is different, and coverage that was standard at your old company might be an add-on at your new company.