Before purchasing or renewing your automobile insurance you should understand the coverages you are buying. Your policy will list on the “Declarations” page the types of coverages you have and the dollar amount of the coverage but it will not explain in any detail what that coverage means to you and why it is in your policy. The purpose of this article is to provide you with that information so that you can make intelligent choices the next time you renew or purchase automobile insurance coverage. Each month we will address a different coverage issue.
In this first installment we will look at the coverage in your policy that is called “Bodily Injury” or “Liability”
This is coverage that is mandatory in Pennsylvania. It covers any person or persons that you may injure if you are involved in an accident. In other words it is that amount of money that your insurance company will pay to any person injured in an accident caused by you or anyone insured under your policy. The mandatory minimum coverage in Pennsylvania is $15,000. The premium you will be charged will vary depending on the amount of coverage that you purchase. Some insurance companies sell this coverage as a “single” limit and others will sell this coverage with split limits. A single limit policy is a policy that will pay up to the amount of your coverage for any one accident. For example if you have a $100,000 single limit policy your insurance company will pay up to $100,000 total to all people who may be injured in the accident. On the other hand some policies are sold with split limits. Your policy may read that your coverage is $100,000 / $300,000. That means that your insurance company will pay up to $100,000 per injured party with a maximum payout of $300,000 per accident. Of course, the more coverage you purchase, the higher your premium will be.