Auto Insurance
Liability Insurance

What are the definitions for liability insurance medical payments insurance uninsured motorist comprehensive and collision for auto insurance?

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Wiki User
2015-09-25 01:01:27

(1) Liability insurance is a kind of third-party coverage. It

pays money damages to a third-party who/that sustains damage (that

can be measured monetarily) as a result of the insured's negligence

(carelessness). The amount payable is limited by the policy limits,

which in turn depend upon the amount of coverage that the insured

purchased. (2) Medical payments coverage is also third-party

coverage. It pays reasonable medical expenses incurred by a

third-party, sometimes without regard to fault. Frequently, an

insurer will be willing to pay medical expenses in return for

avoiding a lawsuit. (3) Uninsured motorist coverage is first-party

insurance maintained by the owner of a vehicle. It is intended to

pay money damages to the owner, driver and/or passengers who are

injured in a collision with a vehicle that does not have liability

insurance (which would otherwise pay that/those damages. There is a

variant of uninsured motorist coverage called "underinsured

motorist coverage". It applies in situations where the at-fault

party's liability insurance is insufficient to fully compensate the

injured person(s) for his or her injuries. Therefore, the injured

party may have a claim against the at-fault party (to the extent of

his/her coverage) and their own insurer (for underinsured motorist

benefits). Generally, payment takes into account the degree of

fault of the insured for causing the collision (because it serves

as the functional equivalent of the other party's liability

coverage. (4) Comprehensive coverage is first-party insurance that

covers categories of physical damage to the insured vehicle that

are not caused by a collision. An example would be flooding of a

vehicle during a hurricane, or a tree falling on it. (5) Collision

coverage is first-party coverage that pays for the repair or pays

the actual cash value of the insured vehicle if it is damaged in a

collision. Payment is made without regard to fault. The net payment

to or on behalf of the insured is reduced by the policy collision

deductible. that the insured selected at the inception of the

policy. Most states require an insurer to declare a vehicle to be a

"total loss" if the cost of repair will exceed a stated percentage

of its actual cash value. In that event, the insurer pays the

actual cash value less the deductible. In some cases, the insured

wishes to retain the salvage (the remains of the totaled vehicle).

In those cases, the value of the salvage is also deducted from the

payment to the insured.

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Wiki User
2009-03-10 21:11:40

Liability insurance: The coverage found on any auto policy that

handles damage you cause to another person's property, either

directly or indirectly with your car. Medical Payments Insurance:

Can be either Medpay or PIP. PIP -- or "personal injury protection

-- is required in many states, and essentially handles your medical

bills in an auto accident, regardless of who is at fault.

(summary:will re-attach your fingers if chopped off in a accident)

Uninsured Motorist: Can be for either property damage or bodily

injury, and essentially makes your carrier step in when the

at-fault party is either uninsured or doesn't have enough coverage

to handle all your damages. Most people have UMBI (for bodily

injury), and mistakenly believe it covers property damage to their

cars as well. It doesn't. (summary:will pay for your loss of income

as you are an architect whos fingers were cut off and had to miss

work for two months while in physical therapy) Comprehensive: A

voluntary coverage that, along with collision, constitutes "full

coverage" on a vehicle. This is for "non-collision" type accidents,

even when you collide with an animal. Essentially, it's to protect

your car when you aren't at-fault for a loss. Includes coverage for

hail, flooding, etc. Collision: Another voluntary coverage, which

handles collisions or overturns involving your vehicle. This is

triggered whether you're at-fault or not for a loss, in that it's

specific to your vehicle colliding with another object or


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