Aftermarket parts are replacement parts that are not made by the original equipment manufacturer.

Businessperson's guide to Federal Warrant Law: Understanding the Magnuson-Moss Act

Use of Aftermarket (Non-OEM) Crash Parts in Repair of Damaged Vehicles

Aftermarket parts are replacement parts that are not made by the original equipment manufacturer. While the quality of some aftermarket parts may be questionable, most parts are equal to, if not better than, OEM parts and are usually more readily available than OEM parts. Aftermarket parts are also called non-OEM parts, generic parts, or competitive replacement parts. Depending on the language of the auto policy, allowing the repair shop to use aftermarket parts instead of OEM parts may allow the insurer to alter the policy's coverage going forward. The National Association of Mutual Insurance Companies estimates that aftermarket parts cost as much as 50 percent below their OEM counterparts, saving car owners more than $2.2 billion annually on repairs.﻿﻿ Aftermarket parts represent less costs for insurers and can potentially drive down overall auto insurance premiums.

Aftermarket Parts

Auto insurance is purchased by vehicle owners to mitigate costs associated with getting into an auto accident. Discover more about it here.

"Automobile Financial Responsibility Laws by State."

"Facts + Statistics: Uninsured Motorists."

When you buy or lease a car, it's important to protect that investment. Agreeing to a higher deductible can result in a lower premium but you'd have to be reasonably sure you could cover the higher amount if you need to file a claim.
Ask your insurance company about ways you may be able to lower your car insurance rates, such as getting a safe driving discount or taking a defensive driving course. Regardless of whether they mandate having a minimum amount of auto insurance, nearly every state requires car owners to carry bodily injury liability, which covers costs associated with injuries or death that you or another driver causes while driving your car. Auto insurance can offer coverage for:
Vehicle damages, including your car or another driver's vehicle
Property damage or bodily injuries caused by an accident
Medical bills and/or funeral expenses associated with injuries sustained in an accident While other types of insurance such as health and homeowner's may seem more important, if you own an automobile, regardless of whether your state requires auto insurance, having an insurance policy can save you a lot of money and aggravation in the long run.

Auto Insurance

Liability car insurance provides financial protection for drivers who harm someone else or their property while operating a vehicle.

"Auto insurance basics - understanding your coverage."

"What's covered by a basic auto insurance policy?"

Liability car insurance is the part of a car insurance policy that provides financial protection for a driver who harms someone else or their property while operating a vehicle. Unlike property damage liability insurance, which covers another person's car if you damage it, collision and comprehensive insurance cover your own car.
Collision insurance helps pay to repair or replace your car if it's damaged in an accident involving another vehicle or an object, such as a tree or a wall. Let's say the motorist had the following liability car coverage with their insurance company:
Bodily injury liability limit per person of $60,000
Bodily injury limit per accident of $150,000
The insured gets into an accident involving multiple people and is ruled at-fault for any damages. Liability car insurance consists of two types of coverage:
The bodily injury liability portion of an car insurance policy covers an at-fault driver, so they are not liable for others' emergency and ongoing medical expenses, loss of income, or funeral costs. Person A has medical costs totaling $30,000
Person B has medical costs totaling $40,000
Person C has medical costs totaling $50,000
The at-fault driver's liability would be covered in this instance because each person who was involved in the accident had medical expenses of under $60,000.

Liability Car Insurance

Basic reparations benefits are a type of automobile insurance that provides assistance with medical expenses, lost income, and essential services.

In the insurance industry, basic reparations benefits are a type of automobile insurance that provides assistance with medical expenses, lost income, and essential services following a car accident. Because basic reparations coverage is considered optional, the injured party will have to successfully sue the negligent party to pay for medical expenses unless the driver has purchased basic reparations benefits coverage. In the insurance industry, basic reparations benefits are a type of automobile insurance that provides assistance with medical expenses, lost income, and essential services following a car accident. If the injured driver does have basic reparations benefits, then that policy would pay for their medical expenses, a portion of their lost income, and other essential services, regardless of which party was at fault, making it unnecessary to sue the negligent driver. Basic benefits reparations are generally more expensive than other types of auto insurance, because they provide coverage for lost income and essential services in addition to basic medical costs.

Basic Reparations Benefits

Black box car insurance sets premiums based on the policyholder's driving behavior as measured and recorded by telematics technology. 

Consumers Interest in Telematics Reaches New Heights

This Just in: Consumers Are Now Much More Comfortable With Sharing Driving Data

Black box car insurance, also known as telematics insurance, is a type of auto insurance that uses technology to track and record a policyholder's driving behavior. Black box car insurance, also known as telematics insurance, is a type of auto insurance that uses technology to track and record a policyholder's driving behavior. But though the technology can mean lower rates for some policyholders, a driver who has a long commute, works late-night shifts, or consistently goes over the speed limit may end up paying higher premiums with a black box policy than with a traditional policy. With a conventional auto insurance policy, drivers typically pay a fixed premium determined in part by the number of miles they expect to drive during a certain period, such as six months. Black box car insurance uses technology to track and record a policyholder's driving behavior.

Black Box Car Insurance

A business auto coverage form is a form that describes the key elements of a business auto policy (BAP).

A business auto coverage form is a form that describes the key elements of a business auto policy (BAP). A business auto coverage form is a form that describes the key elements of a business auto policy (BAP). Through the business auto coverage form, Marko can clearly identify what types of risks are covered by the policy, and what the level of coverage would be if such accidents occur. The business auto coverage form includes two types of coverage: auto liability and physical damage. By carefully reviewing the business auto coverage form, the policyholder can choose whether or not to ensure different kinds of vehicles, while also modifying the extent of the coverage assigned to each vehicle type.

Business Auto Coverage Form

In the case of an accident, Class 1 Insurance covers the policyholder and owner of the vehicle, as well as a relative who lives with the policyholder, a pedestrian, or a bicyclist.

Class 1 Insurance is a type of coverage offered in the auto industry to protect the policyholder and select others in the event of an accident that occurs when driving for personal, domestic, or social purposes.
Class 1 Insurance also covers the policyholder when they are driving for business purposes, excluding carrying goods or samples; Class 2 Insurance expands on this by covering the policyholder when they are carrying goods and samples. Insurance companies may limit the amount of uninsured motorist coverage in some cases—specifically, if an individual covered by a Class 1 insurance policy is injured in a vehicle that they own, or if the vehicle is owned by a spouse or resident relative but does not have its own uninsured motorist coverage purchased for it. The difference between Class 1 insurance and Class 2 insurance is that Class 2 insurance extends coverage to individuals who may not be resident relatives of the policyholder, but who may have permission to use or occupy the insured vehicle. Class 1 insurance, also written as Class I insurance, provides benefits to qualifying parties for any insurance policy in which premiums are paid.

Class 1 Insurance

Collision damage waiver (CDW) is additional insurance coverage offered to an individual renting an automobile.

A collision damage waiver (CDW) is additional insurance coverage offered to an individual renting an automobile. A collision damage waiver is optional, with the cost of the waiver dependent on a variety of factors, including the type of rental car and where the car is being driven. Car rental customers that purchase a collision damage waiver pay an additional daily fee on top of the rental car fee. Renters are typically offered a CDW when they reserve the automobile, as well as during the process of picking up the rental car at the rental counter at the airport through a sales process. A collision damage waiver only covers rental car damage.

Collision Damage Waiver (CDW)

Collision insurance is auto coverage that reimburses the insured for damage sustained to their personal automobile, due to the fault of the insured driver.

Collision insurance is auto coverage that reimburses the insured for damage sustained to their personal automobile, due to the fault of the insured driver. Collision insurance is auto coverage that reimburses the insured for damage sustained to their personal automobile, due to the fault of the insured driver. When two drivers are in an accident, collision insurance pays for the damage, and it will cover damage from potholes, and accidents involving an inanimate object. Collision insurance will cover damage from a collision with another vehicle, tree, pole, guardrail, and most other possible roadway hazards. Collision insurance is coverage that reimburses the insured for damage sustained to their automobile when they are not at fault.

Collision Insurance

Combined physical damage insurance is a type of auto insurance that covers damage to the policyholder’s vehicle from various causes.

Automobile Financial Responsibility Laws by State

Combined physical damage insurance is a type of auto insurance policy that reimburses policyholders for damage to their own vehicle resulting from a collision or other causes, essentially combining the coverage in the collision and comprehensive portions of a conventional auto insurance policy. Combined physical damage insurance is a type of auto insurance policy that reimburses policyholders for damage to their own vehicle resulting from a collision or other causes, essentially combining the coverage in the collision and comprehensive portions of a conventional auto insurance policy. Individual states, which set auto insurance laws, require drivers to carry at least a certain minimum amount of bodily injury and property damage liability coverage—and, in some instances, other types of coverage, such as personal injury protection and medical payments coverage. Combined physical damage insurance protects policyholders in the event of vehicle theft, fire, flood, vandalism, window breakage, collisions with animals, and weather-related damage, as well as auto accidents. However, it does not cover costs related to personal injury or damage to other people’s vehicles, as is found in a conventional policy’s bodily injury and property damage liability coverage.

Combined Physical Damage Insurance

Comparative negligence is a principle of tort law commonly used to assign blame and award monetary damages to injured parties in auto accidents.

Comparative negligence is a principle of tort law that applies to casualty insurance in certain states. There are three types of comparative negligence rules—pure comparative negligence, modified comparative negligence, slight/gross negligence—followed by states in the U.S.
Comparative negligence is most commonly used to assign blame in auto accidents. Comparative negligence states that when an accident occurs, the fault and/or negligence of each party involved is based upon their respective contributions to the accident. The pure comparative negligence rule allows the plaintiff to recover damages even if they are assigned 99% fault for the accident. Twenty-three states, including Illinois and Oregon, follow the 51% bar rule, meaning plaintiffs cannot recover if their fault percentage is 51% or greater.
South Dakota is the only state to recognize the slight/gross negligence rule.

Comparative Negligence

Comprehensive insurance is car insurance that covers damage to your car from causes other than a collision. Learn about comprehensive insurance costs.

"What is covered by collision and comprehensive auto insurance?"

What is Covered by Collision and Comprehensive Auto Insurance?

Table of Contents
What Is Comprehensive Insurance? Understanding Comprehensive Insurance
What Comprehensive Insurance Covers
Comprehensive vs. Collision Insurance
Cost of Comprehensive Insurance
Advantages and Disadvantages of Comprehensive Insurance
Example of Comprehensive Insurance
The Bottom Line
Comprehensive insurance is a type of automobile insurance that covers damage to your car from causes other than a collision. In terms of what comprehensive insurance covers, the list includes damages related to:
Contact with animals, such as hitting a deer
Natural disasters, including earthquakes, floods, and hurricanes
Riots and vandalism
Vehicle theft, or theft of certain parts of the vehicle
Broken windshields
Fallen objects, including branches, rocks, or hail
It can make sense to have comprehensive car insurance if you're buying a brand-new car, regardless of whether you finance it or pay cash. Comprehensive insurance, collision insurance, and liability insurance are the three components of an automobile insurance policy. When purchasing comprehensive coverage or any other type of car insurance, be sure to compare the best car insurance companies to find the most affordable rates.

What Is Comprehensive Insurance?

Constructive total loss is a term used by insurers to record a settlement at full value of the damaged item because repair estimates exceed that value.

An insurer declares insured property to be a constructive total loss when the estimated costs for its repair exceed the insured value of the property. The claims adjuster, however, determined that the accident constituted a constructive total loss on the two trailers and paid a $30,000 claim to Jeff.
Derrick could have repaired his two trailers for $30,000, but because they were a constructive total loss, he had to surrender the titles of the trailers to the insurance company. If Derrick had used a more accurate stated value, his insurance premium would have been higher, but in the case of an accident, his trailers would have been restored to their pre-loss condition, even in the case of a constructive total loss. An insurer declares insured property to be a constructive total loss when the estimated costs for its repair exceed the insured value of the property. Having insured property declared a constructive total loss is not always in the best interests of the insured parties, especially if they have failed to obtain coverage that is adequate to cover all contingencies.

Constructive Total Loss

Gap insurance protects car owners when the compensation received from a total loss does not fully cover the amount still owed on a financing agreement.

Gap insurance is a type of auto insurance that car owners can purchase to protect themselves against losses that can arise when the amount of compensation received from a total loss does not fully cover the amount the insured owes on the vehicle's financing or lease agreement. **You've taken out a car loan with a long term (more than 60 months):** A long-term loan takes longer than usual to hit the break-even point, which is when your loan balance and the car's value begin to equalize. **You bought a car with bad resale value:** If you bought a car that quickly loses value, you'd probably be upside down without a substantial down payment. It may be several years before the loan amount and the car's actual value amount begin to balance.
**You've traded in an upside-down car:** The faster you rack up the miles, the faster you depreciate your car's value, and it's likely that you'll be dropping the value of your car more quickly than your payments can keep pace.

What Is Gap Insurance?

Good Student Discount is an auto insurance policy discount available to young drivers who earn good grades in school. 

Most Large Auto Insurers Charge 40 and 60-Year-Old Women Higher Rates Than Men, Often More Than $100 Per Year

Ann of Advances in Automotive Medicine: "Gender and Age Differences among Teen Drivers in Fatal Crashes

Car Insurance Discounts—Saving on Auto Insurance

The term good student discount refers to an auto insurance policy discount available to young drivers who earn good grades in school. In one study that analyzed gender and age differences in fatal crashes, male drivers between 15 and 19 were more likely than female drivers of the same age to be:
Involved in fatal crashes
Speeding and driving outside their lane at the time of the crash
Drinking alcohol and driving recklessly
Charged with a serious violation, such as hit-and-run or manslaughter
Male teens also tend to drive with more passengers in their cars.﻿﻿ And compared with other age groups, teens and young adults often have the lowest rates of seat-belt use. The following additional tips to keep premiums down for young drivers:
Choose a safe vehicle with electronic stability control
Opt for higher deductibles
Complete driver’s education
Leave your car behind when you go to college
You can also look into graduated driver licensing systems, which provide longer practice periods, limit driving under high-risk conditions for newly licensed drivers, and require greater participation from parents as their teens learn to drive. The term good student discount refers to an auto insurance policy discount available to young drivers who earn good grades in school. Good student discounts reward high-school and college-age drivers who earn good grades with lower premiums on their car insurance.

Good Student Discount

Medical payments coverage (MedPay) is an addition to your auto insurance policy for medical expenses resulting from a vehicular accident to all individuals in your car.

Medical payments coverage is an add-on to an auto insurance policy that covers expenses related to vehicular accidents. Generally, PIP covers more than MedPay, and in some states you cannot have both at the same time.
Bodily injury liability insurance covers bodily injury to a person in another car in an accident in which you are at fault. Unlike MedPay, which applies to injured persons in your own car, bodily injury liability insurance covers bodily injury to a person in another car in an accident in which you are at fault. It covers medical payments, such as health insurance deductibles and co-pays, visits to a doctor or hospital, X-rays and surgery, ambulance and emergency medical technician fees, rehabilitation and nursing care, and some medical equipment, such as prostheses. Also called “MedPay,” it covers you and any passengers in your vehicle, any pedestrians you may injure, and you—if you are riding as a passenger in another vehicle or are injured by a vehicle as a pedestrian, bike rider, or public transportation rider.

Medical Payments Coverage (MedPay)

Nonstandard auto insurance is offered to drivers considered to carry the most risk.

Nonstandard auto insurance is offered to drivers considered to carry the most risk of an automobile accident. Those who have been in auto accidents in the past or have a less-than-perfect driving record will typically have higher premiums for their policies since there's a higher risk to the insurance company of an accident and an insurance claim being filed. Typically, insurance companies must determine the proper balance of low claim risk drivers—that pay lower premiums—with moderately-to-high risk drivers—that pay higher premiums. Nonstandard auto insurance is typically more costly to the vehicle owner than a traditional policy since the insurance company has a greater risk that they may need to payout funds due to an accident. Standard auto insurance policies are typically less expensive, meaning lower premiums, than other types of auto insurance since the drivers usually have a better driving record and few-to-no accidents.

Nonstandard Auto Insurance

An omnibus clause is an automobile liability insurance policy clause that extends coverage to individuals not named in the policy.

An omnibus clause is a provision in standard automobile liability policies that extends coverage to individuals not named in the policy. Once the individual named in the policy provides permission to the first non-named individual, called the first permittee, that individual may then allow another party, the second permittee, to use the vehicle. An omnibus clause that requires the insured’s permission to be either expressed or implied would deny coverage in this case because the insured openly stated that the first permittee was not allowed to let anyone else drive the vehicle. The omnibus clause automatically covers anyone who could be held liable for your negligence or for the negligence of a permissive user—this means anyone who is vicariously liable for negligence committed by you (the named insured) or an authorized driver. In some cases, courts may rule that the named insured granting unrestricted use of a vehicle is an indicator that the party given permission can subsequently give permission to other people.

Omnibus Clause

Personal injury protection is a feature of auto insurance that covers medical expenses related to a car accident.

Background on: Compulsory Auto/Uninsured Motorists.

Personal injury protection (PIP), also known as “no-fault insurance,” is a component of an automobile insurance plan that covers the healthcare expenses associated with a car accident. PIP is not a substitute for liability insurance, which is required by every state (plus Puerto Rico and Washington, D.C.), except for New Hampshire and Virginia.﻿﻿ Liability insurance pays for injuries caused to another party, such as a pedestrian or the driver and occupants of another vehicle. Personal injury protection (PIP), also known as “no-fault insurance,” is a component of an automobile insurance plan that covers the healthcare expenses associated with a car accident. If the cost of necessary medical care exceeds the auto insurance policy’s PIP limits, health insurance sometimes covers further expenses. Similarly, if PIP coverage is optional in your state, you'll want to look at your health insurance to see how it covers expenses related to car crashes, as well as your deductible and out of pocket maximums, to help you decide.

Personal Injury Protection (PIP)

Preferred Auto Coverage is auto insurance offered to drivers considered to fall into the lowest risk profile.

Preferred auto insurance is offered to drivers considered to fall into the lowest risk profile. Most insurance companies want a mix of low premium drivers who carry reduced risk, and higher premium drivers who are considered more likely to get into an accident. Generally, insurance companies prefer a mix of low premium and reduced risk drivers and high premium drivers in their insurance pool. Substandard drivers are considered the riskiest to insure, and they either pay the highest premiums or are denied insurance coverage and must go to a state assigned risk pool for coverage. Insurance companies consider a number of factors, such as age and driving record, and compare them to available actuarial information before deciding to offer preferred auto coverage to preferred drivers.

Preferred Auto Coverage

Private-passenger auto insurance policyholder risk profile is an estimate of the risk an insurance company will take on by covering a specific driver. 

A private-passenger auto insurance policyholder risk profile is an estimate of the risk an insurance company will take on by covering a specific automobile operator with an insurance policy. A private-passenger auto insurance policyholder risk profile is an estimate of the risk an insurance company will take on by covering a specific automobile operator with an insurance policy. A private-passenger auto insurance policyholder risk profile quantifies the amount of risk an insurance company will take on by offering insurance to a policyholder. The private-passenger auto insurance policyholder risk profile allows an insurance company to estimate the likelihood that a particular driver will get into an accident, causing a claim to be made against a policy. The private-passenger auto insurance policyholder risk profile is designed to facilitate underwriting by quantifying that risk.

Private-Passenger Auto Insurance Policyholder Risk Profile

Single interest insurance, also known as vendor single interest insurance or VSI insurance, protects the lender but not the borrower in a home or car loan.

Single interest insurance—also known as vendors single interest insurance or VSI insurance—covers the interests of one of the two parties that co-own a property. Single interest insurance, also known as vendor single interest insurance or VSI insurance, protects the lender but not the borrower of home, car, or other consumer loans. Single interest insurance—also known as vendors single interest insurance or VSI insurance—covers the interests of one of the two parties that co-own a property. In the United States, some states allow the lender to pass the cost of a VSI insurance policy to the borrower, who may be required to purchase the insurance in order to receive a loan. If for some reason a buyer cannot show proof of insurance when purchasing the vehicle, the finance company might require that the buyer purchase vendor single interest insurance.

Single Interest Insurance

Standard auto insurance is basic auto insurance, generally offered to drivers with clean driving records who fall into an average risk profile.

Standard auto insurance refers to the most basic auto insurance offered to drivers who fall into an average risk profile. _Actuarial information gathered from the driving records of those with similar characteristics to the person seeking coverage is used to set the premium._
_The insurer considers such information as gender, age, marital status, driving record, accident history, vehicle type, car usage, credit history, and location._
_The information used helps the company estimate the likelihood of the driver getting into an accident, filing a claim, and costing the insurer money through a higher-than-average claim rate._
Standard auto insurance takes into account a driver’s characteristics. In the case of auto insurance, the insurer will consider the driver’s age, gender, marital status, driving record, accident history, vehicle type, car usage, credit history and location. In addition to standard auto insurance, other types of insurance, such as comprehensive and collision, may be available at an additional charge to the standard policy. Standard auto insurance refers to the most basic auto insurance offered to drivers who fall into an average risk profile.

Standard Auto Insurance

Subrogation is the right of an insurer to pursue the party that caused the loss to the insured in an attempt to recover funds paid in the claim.

Subrogation is a term describing a right held by most insurance carriers to legally pursue a third party that caused an insurance loss to the insured. This is done in order to recover the amount of the claim paid by the insurance carrier to the insured for the loss. Subrogation is a term describing a right held by most insurance carriers to legally pursue a third party that caused an insurance loss to the insured. This is done in order to recover the amount of the claim paid by the insurance carrier to the insured for the loss. Such provisions prevent one party’s insurance carrier from pursuing a claim against the other contractual party in an attempt to recover money paid by the insurance company to the insured or to a third party to resolve a covered claim. Subrogation in the insurance sector, especially among auto insurance policies, occurs when the insurance carrier takes on the financial burden of the insured as the result of an injury or accident payment and seeks repayment from the at-fault party. A waiver of subrogation is a contractual provision whereby an insured party waives the right of their insurance carrier to seek redress or seek compensation for losses from a negligent third party.

Subrogation

Third-party insurance, the most common example being auto insurance, is a policy designed to protect against the actions or claims of a third party.

What Is Covered by a Basic Auto Insurance Policy?

Automobile Financial Responsibility Laws By State

Table of Contents
What Is Third-Party Insurance? Third-party insurance is a policy purchased by the insured (first party) from the insurance company (second party) for protection against the claims of another (third party).
Third-party insurance covers an individual or firm against a loss caused by some third party. A third-party insurance policy is purchased by the insured (first party) from the insurance company (second party) for protection against the claims of another (third party). There are two types of automobile third-party liability coverage: bodily injury liability and property damage liability. Most companies include public liability insurance in their insurance portfolio to protect against damage to property or personal injury.

Third-Party Insurance

Underinsured Motorist Coverage Limits Trigger can be specified by an insured party to protect against losses caused by an accident with a driver who has insufficient insurance. 

Auto liability insurance requirements in other states

The underinsured motorist coverage limits trigger is one of the two triggers that can be specified by an insured party to protect against losses caused by an accident with a driver who has insufficient insurance. The underinsured motorist coverage limits trigger ensures insurance coverage for damages caused by an at-fault motorist without adequate auto insurance to fully cover the other injured party's damages. The underinsured motorist coverage limits trigger ensures coverage in the event of an accident caused by a driver with inadequate insurance, and when the underinsured driver's liability limit is lower than that of the insured person or policyholder. In the event of an accident with an at-fault driver who only has $100,000 of insurance coverage, an insurance claim of $150,000 would result in the policy holder's underinsured motorist coverage kicking in because of the limits trigger. In fact, every state, with the lone exception of New Hampshire, makes it illegal to not carry some form of auto insurance.﻿﻿ Underinsured coverage is better than no coverage at all.
Assume an insured person has underinsured motorist coverage up to $500,000 with a limits trigger.

Underinsured Motorist Coverage Limits Trigger

Underinsured motorist coverage is an auto insurance policy provision for property and bodily damage caused by a driver with insufficient insurance.

News Release: One in Eight Drivers Uninsured

Background on: Compulsory Auto/Uninsured Motorists

Underinsured motorist coverage is an addition to your auto insurance policy. This kind of coverage is a relatively inexpensive add-on to a regular auto insurance policy and can prove to be beneficial in the case of an accident.
A few states require drivers to have underinsured motorist coverage, while a greater amount requires uninsured motorist coverage. ​​​​​​​Underinsured motorist coverage is usually a relatively inexpensive add-on to your auto insurance policy cost, but can prove beneficial if you're in an accident where the driver who was found to be at fault does not have enough insurance to cover the cost of damages from the crash. Underinsured motorist coverage provides protection in case of an accident in which the at-fault driver doesn't have enough insurance to cover all damages. When a person has an accident which is not their fault, and the other motorist does not have enough insurance to cover the damages, underinsured coverage kicks in.

Underinsured Motorist Coverage

An underinsured motorist endorsement is a type of supplemental insurance commonly purchased as part of an automobile insurance policy.

In the insurance industry, an underinsured motorist endorsement is a type of supplemental insurance commonly purchased as part of an automobile insurance policy. In the insurance industry, an underinsured motorist endorsement is a type of supplemental insurance commonly purchased as part of an automobile insurance policy. In a scenario where the at-fault driver has no insurance and no personal assets to pay for the claim, the endorsement would therefore cover the entire amount of the claim, up to the maximum coverage level specified in the policy. For this reason, Driver A’s insurance pays $100,000 out of the $175,000 total, whereas Driver B’s insurance pays the remaining balance of $75,000. Drivers purchase auto insurance for several reasons, such as the risk of their car becoming damaged in an accident, the risk of damaging another person’s car, or the risk of killing or injuring another person.

Underinsured Motorist Endorsement

Uninsured motorist (UM) coverage may pay a policyholder's damages when an accident involves a driver who does not have insurance or is a hit-and-run.

News Release: One in Eight Drivers Uninsured.

Uninsured motorist (UM) coverage is a component of an auto insurance policy that provides coverage when the policyholder is in an accident with someone who does not have insurance. In some states, it is required that auto insurance policies include uninsured motorist coverage.
Uninsured motorist coverage (UM) is an add-on coverage for auto policies that will pay for injuries and damages caused by an uninsured driver. An uninsured motorist (UM) is an at-fault driver who has no auto insurance, does not have insurance that meets state-required minimum liability amounts, or whose insurance company is unwilling or unable to pay the claim. It's important to be aware of this distinction since uninsured motorist coverage is not the same as underinsured motorist coverage, which would cover a situation in which the at-fault driver did not have enough insurance to fully cover the other injured party's damages. Uninsured motorist (UM) coverage is a component of an auto insurance policy that provides coverage when the policyholder is in an accident with someone who does not have insurance.

Car Insurance

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