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Your Auto Insurance Policy Simplified

Posted by Allison Ruuska on 12/3/2007 at 1:00 PM

Follow these tips to read and understand your policy faster.

Have you ever sat down to read your auto insurance policy contract — not your Dec Page that lists the coverages you purchased, but the actual policy contract that looks like a very long legal agreement?

 

If not, you're not alone. Many people find this task daunting due to the contract's complexity, so they avoid tackling it.

While we recommend that you read your policy to fully understand specific coverage details, we also know that your policy is written as a legal contract, so it can seem intimidating or confusing.

To simplify the reading of your policy, we've put together a brief overview of the types of coverages in a typical policy contract and how they work.

Elements of an Auto Insurance Policy

Policy Your auto insurance policy consists of sections that define every type of auto insurance coverage offered by your company. Policies are distinguished by the state in which they're issued, and coverages available may vary among states. Your policy simply explains the types of coverage available and how or when they can be used. For your specific policy information, please refer to the terms, conditions, limitations and exclusions contained in your specific policy.

If you see these coverages in your Progressive policy, here's what they do:

  • Liability – This coverage consists of Bodily Injury and Property Damage (BI/PD), which covers your legal liability, up to the limit you select, for damages caused in a covered vehicle accident. Under BI/PD, we pay for damages to an injured person and for property damage that you are legally obligated to pay as a result of an accident. If we cover an accident for which you are sued, we pay for a lawyer to defend you, too.
  • Personal Injury Protection (PIP) – Available in certain states and commonly referred to as "no-fault insurance," PIP covers your medical bills and often lost wages if you are disabled or unable to work as a result of an accident. PIP also usually covers the cost of personal services you must now pay someone else to do for you. PIP coverage is subject to a limit, which is specified in your policy.
  • Medical Payments (MedPay) – This coverage applies no matter who is at fault and covers the cost of reasonable and necessary medical care provided to you as the result of a car accident. The coverage is often limited to a specified time period following the accident (usually three years) and the amount of coverage you chose when you purchased the policy.
  • Uninsured/Underinsured Motorist (UM/UIM) – UM/UIM coverage pays for damages that you are legally entitled to recover for your bodily injury. In general, this coverage provides what you would have received from the other person's insurance company had that person been insured. UM/UIM may also protect you if the person who caused the damage does not have enough insurance. Uninsured Motorist Property Damage coverage is available in some states and provides protection for damage to property caused by a person without insurance.
  • Collision – If your vehicle overturns, or if it collides with another vehicle or object, Collision coverage pays for the damage to your vehicle. Collision involves a deductible amount you select when you purchase your policy. This amount, typically $250 or $500, is the amount you are required to pay in the event a claim exceeds the deductible amount.
  • Comprehensive – This coverage pays for damage caused by an event other than a car collision, such as fire, theft, vandalism, hail or flood damage. Comprehensive also covers damage from an animal hit. Additionally, if your car is stolen, Comprehensive will cover the cost of a rental (subject to a daily limit). Like Collision coverage, a deductible usually applies.
  • Custom Parts or Equipment (CPE) – Collision and Comprehensive coverage each provide up to $1,000 of coverage for custom parts or equipment, which are accessories and enhancements permanently installed in or on your vehicle. Parts and equipment offered by the manufacturer or installed by the dealer at the point of sale are not custom parts or equipment, but they are included under your standard Collision and Comprehensive coverage.
  • Additional Custom Parts or Equipment (ACPE) – This coverage is available if you have more than $1,000 of custom parts or equipment on your vehicle. If you purchase ACPE, we will pay for custom parts or equipment damaged as a result of a covered incident, up to the amount shown on your Dec Page.
  • Rental Reimbursement – If you buy Rental Reimbursement coverage, we will reimburse you for rental car charges incurred while our vehicle is being repaired after a covered accident. You can only buy Rental Reimbursement if you buy Collision and Comprehensive coverage. Rental Reimbursement is limited to 30 days and is subject to the maximum per day amount shown on your Dec Page.
  • Loan/Lease Payoff – This coverage protects you when your covered vehicle has been deemed a total loss and you owe a lender more money than the vehicle is worth. If you buy Loan/Lease Payoff and your vehicle is declared a total loss, Loan/Lease Payoff will pay the difference between the vehicle's actual cash value and the amount you owe to the lender. However, the maximum we will pay under this coverage is 25 percent of the actual cash value.
  • Roadside Assistance – If you incur labor costs at the place where your vehicle becomes disabled as a result of a mechanical/electrical breakdown, dead battery, flat tire and/or lockout, Roadside Assistance covers those costs. We also will help if you run out of gas or other fluid, or if you become stuck in snow or mud within 100 feet of a road or highway. And, if necessary, Roadside Assistance will cover towing to the nearest qualified repair facility.

If you have further questions about your Progressive policy, please contact us online or at 1-800-PROGRESSIVE (1-800-776-4737). Our representatives are always available to answer your questions or help you with your policy.

The information in this blog may vary based on your particular state or situation. Always refer to your insurance policy for your specific coverages.

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Comments

@Anna, You’ll need to contact the company that wrote your renters policy. Progressive has partnered with several companies to offer renters insurance, so if you aren’t sure which company to contact, you can find out by logging in to your policy online or contacting your local agent.
Posted on 4/30/2010 at 7:24 PM by Brittany R.
What is the actual benefit coverage amount for each category (personal injury, liability, etc.) for all drivers on a Progressive Auto Insurance Policy?
Posted on 7/12/2010 at 9:26 AM by Mike Clark
@Mike Clark, We offer multiple limit combinations, which are based on your individual coverage as well as where your live. Details on our coverages are available here: http://auto.progressive.com/progressive-car-insurance/auto-coverages.aspx. Feel free to contact us at 800-776-4737 for more details.
Posted on 7/13/2010 at 12:38 PM by Brittany R.
if a person in in accident at what percent to you use to rate the vehicle a total loss?
Posted on 1/31/2012 at 8:06 PM by grace
@Grace: Your claims adjuster would be the person to deem the vehicle a total loss in the event of a claim.
Posted on 2/6/2012 at 11:00 AM by Progressive
it is my understanding that comprehensive will cover fuel contamination damage done to a motor or if someone puts something in your fuel tank and it destroys a motor...correct?
Posted on 6/6/2012 at 4:52 PM by andrea
@Andrea: That may be covered under comprehensive as vandalism. For more information, you'll want to speak with a claims adjuster. You can call our Claims Department anytime at 1-800-274-4499.
Posted on 6/12/2012 at 1:37 PM by Progressive
great tips on understanding your policy. This could help a great deal of people as almost everyone has facets in their policy that they do not understand.
Posted on 11/16/2012 at 1:19 PM by tyler

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