The following definitions are VERY general in nature and are provided only as a guide to understanding insurance terminology. Precise & legal definitions vary not only from company to company and from policy to policy, but also from state to state. Keep in mind there are many exclusions and stipulations in all insurance policies. Please check your policy or contact your agent if you have specific questions pertaining to coverage and/or definitions. (If you only have a national, toll-free, always busy, phone number to call and don't have a local agent, maybe you should consider getting a quote from us, we are always happy to answer our customer's questions!)
Liability
If you or another driver of your vehicle are at fault in an accident,
liability pays the other party for their injuries and damage to their property. The
key word here is "liable", in other words you must be responsible for the
accident due to your negligence. Liability is required in Georgia in the amount of
25/50/25, all figures are in thousands. The first figure indicates the maximum the
insurance company will pay for ONE person's injuries. The second figure indicates the
maximum amount the insurance company will pay for ALL injuries. The third figure is
the amount the insurance company will pay for property damage. The property damage
doesn't necessarily have to be a vehicle, it may be a building, a street sign, a telephone
pole, etc. Keep in mind that if the damages exceed the limits you carry, you
are responsible for the balance. Liability will not pay for your injuries or damage
to your property.
Comprehensive
Comprehensive coverage pays for damage to your vehicle other than collision.
As the name implies comprehensive is a pretty broad coverage, unless it is
specifically excluded in the policy, it is covered! Common claims involve; striking
an animal, glass breakage, fire, theft and vandalism. Common exclusions are normal
wear & tear, mechanical breakdown and damage intentionally caused by an insured.
Comprehensive coverage is usually purchased with collision, although some companies
will offer it without requiring the purchase of collision coverage. Common
comprehensive deductibles are $250 or $500.
Collision
If you run into or "collide" with an object, this coverage pays for the
damage to your vehicle. The object can be just about anything, from another vehicle,
a tree, a ditch or a board in the road. One exception is if you collide with an
animal it is covered under the comprehensive coverage. Collision coverage has a
deductible that you are responsible for paying, the insurance company will pay for the
rest up to the value of the vehicle. Standard deductibles are $250 or $500, although
lower or higher deductibles are available. Keep in mind the higher the deductible,
the cheaper the insurance. Collision coverage is usually not available unless it is
purchased with comprehensive.
Uninsured Motorist (UM)
If someone causes an accident in which you suffer bodily injury or damage to your
property, their insurance carrier will reimburse you for the damages, providing they have
insurance. If they do not have insurance they are still responsible for the damages,
but it is usually very hard to collect from uninsured individuals. Uninsured
motorist coverage provides protection from these individuals. Your own policy pays
you just as if the responsible party had insurance. You can purchase UM coverage up
to the limits of liability you carry. The property damage portion usually comes with
a $250 deductible. UM also pays for damages caused by a hit & run.
Medical Payments (Med Pay)
Coverage for you or your family's injuries are provided for under medical
payments coverage. Med pay will pay regardless of who is at fault in the accident.
Prior to 1991 Georgia had mandatory No-fault laws wherein everyone was required to
carry medical payment coverage. Many people felt this was unfair, especially if they
had medical insurance through their work (group health or major med) and the law was
abolished in 1991. It is now offered as an optional coverage. Most companies
offer limits ranging from $1000 to $50,000 per person.