May 2, 2024

Understanding Your Auto Insurance Policy Coverage

Understanding Your Auto Insurance Policy Coverage - insurance policy

When you think of your auto insurance policy, you may typically associate it as a post-accident tool to help get your damages repaired. Of course, this isn't wrong, but have you thought about the capacity of full protection the right auto insurance policy can really offer you on and off the road? While the goal is to never be in a situation like an accident, where you'd need to use your insurance, there is nothing wrong with preparing yourself for whatever the future may throw at you. 

To ensure you and your loved ones are fully protected when you get behind the wheel of a car, you'll need to understand the ins and outs of your policies and how to ensure your insurance company doesn't try to give you the workaround when you need it most. Not sure where to start? Don't sweat it; we've got you covered. Keep reading to learn more about your auto insurance policies and what it could mean for you in the event of an accident.


What Is an Insurance Policy, and Do You Need It?

By now, we've all probably heard about the term insurance and how you can get insurance on nearly anything, like your home, health, and even your dog. However, in this guide, we will break down the specifics surrounding auto insurance, what policies may work best for you, and what you need to look out for should you ever need to utilize it after an accident. So, what is auto insurance? Put simply, it is a contract between you and an insurance company that protects you against financial loss if you have an accident. 

However, it is essential to understand that certain auto insurance policies contain a variety of coverage that you may be eligible to choose depending on your needs. Some of the most common forms of insurance policies include the following:

Liability Coverage: Covers the costs of the other driver's property and bodily injuries if you're found at fault in an accident. It consists of two types of auto coverage: bodily injury and property damage. 

  • Bodily injury liability: Applies to the other party's medical expenses if you are found at fault in the accident. In some cases, it may cover any lost wages or legal fees if the injured party files a lawsuit.
  • Property damage liability: Applies to damages to property resulting from an accident in which you're at fault. Coverage may include vehicle repair or replacement costs, as well as other property that may have been damaged in the accident, such as fences, structures, and more.

Depending on what state you live in, minimum liability limits for each of these coverage types will vary.

Collision Insurance: While not mandatory, collision insurance will help provide coverage for damages to your vehicle resulting from a collision with another vehicle or object, regardless of who is at fault. Policyholders will find that it covers the cost of repairing or replacing your vehicle after an accident up to the policy limits. However, depending on your insurance plan, you may be responsible for paying a deductible. 

Personal Injury Protection: Also known as PIP insurance, is a no-fault coverage, meaning that regardless of which driver was at fault, some of the medical expenses for the policyholder and others in the policyholder's car may be covered by insurance. PIP may cover medical expenses and treatment for injuries you or your passengers may have suffered. In some cases, PIP may cover lost wages, certain house services, and the cost of funeral expenses.

Medical Expense Coverage: This policy provides medical payment coverage for you and your passengers in the event of a covered auto accident. Typically, this form of coverage works as a supplement to reimbursement offered by PIP insurance. It can help cover medical expenses such as ambulance bills, hospital bills, doctor visits, and any other necessary medical treatments. However, unlike PIP, medical expense coverage does not cover lost wages, funeral costs, or other services you may be unable to perform due to injuries from a covered accident.

Uninsured Motorist Coverage: If you were involved in an accident caused by an uninsured driver, this coverage will protect you and cover the costs of any medical expenses, lost wages, and other covered damages owed to you. Uninsured Motorist Coverage consists of two types of auto coverage:

  • Uninsured motorist property damage (UMPD): Provides coverage for damages to your car or other property. 
  • Uninsured motorist bodily injury (UMBI): Provides coverage for medical expenses, lost wages, and other damages experienced by you or your passengers.

Uninsured motorist coverage is also often paired with underinsured motorist coverage, which is used in situations where the other driver has some, but not all, of the necessary insurance to cover the damages.

Remember, in the United States, certain laws may or may not require auto insurance companies to carry certain policies depending on which state you reside in. If you are looking for a more specific form of coverage or policy for your auto insurance, make sure you speak to your insurance company and ask if they offer certain packages or other policies that may better suit your needs on and off the road.

Why Do Insurance Companies Deny Coverage?

In 2023, the Automobile Insurance industry was worth over $360.9 billion. So, when keeping that number in mind, you've signed up for insurance coverage and can logically assume you'd be covered should you find yourself in an accident. However, many insurance companies have built a bit of a negative reputation when it comes to providing their policyholders with the compensation they need after an accident. 

Insurance companies often tend to view their policyholders as ways to make money, so when it comes time for you to file a claim, they may not always play fair. A perfect example of this comes from one of the most common stories attorneys hear. 

You, the policyholder who has loyally paid your monthly premiums, are on the road when you've gotten into an accident. While you may think the damage caused by the accident may seem bad, you won't have to worry, as you've paid for the coverage. However, when you've gone to file your claim, your insurance company gives you the sorry news that they will either not provide you with the full coverage or deny your claim outright. 

Their reasonings for denying your claim may include one or more of the following: 

  • Delay in medical evaluation: Your policy may require you to seek medical evaluation for your injuries within a specific time frame after your accident. If you seek medical attention outside of this time frame, your insurance company may question the extent of your injuries and whether they are connected to the accident, which could result in your claim being denied.
  • Delay in reporting the incident: Much like a delayed medical evaluation, your insurance company may require you to submit your claim before a certain amount of time has passed after your accident. To ensure your claim is not denied, immediately contact your insurance company after an accident.
  • Missed a monthly payment: In some cases, if you have missed even one monthly payment, your insurance company may cancel your policy.
  • You do not understand your policy: If you are unaware of what your auto insurance policy covers in the case of an accident, your insurance company has the right to deny your claim, leaving you to pay for any expenses related to the crash out of pocket.
  • You've committed fraud: Somewhere during the filing process, you may have forgotten to mention or accurately list one of the drivers involved in the accident, have left out crucial details, or even exaggerated the extent of the damage. Your insurance company can claim you didn't provide accurate information when you applied for insurance, leading to a denied claim.

Staying informed about your insurance policy and knowing your rights will make it more difficult for insurance companies to act in bad faith. However, even when you file a claim on time and with plenty of supporting documentation, your insurance company may still try to deny it. 


An Auto Insurance Attorney Can Help You After You Were Denied

After an accident, your insurance company may try to lowball or deny your claim altogether in an attempt to avoid paying you what you are owed, leaving you feeling helpless to fight back. When that happens, don't just accept this as the final word; take the steps to fight back by speaking with an attorney. At Morgan & Morgan, we understand the struggles you may be facing when your insurance company does not hold up their end of the bargain.

With over 35 years of experience helping clients fight back against insurance companies looking to exploit their customers, there is no better law firm you can rely on to fight to protect your rights after your auto insurance company has denied your claim. For more information on how a Morgan & Morgan attorney can help you recover the compensation you rightfully deserve, complete our free, no-obligation case evaluation form today.