714-582-3620

 ERENBURG

  INSURANCE SERVICES

GLOSSARY

auto insurance

State of California Minimum Auto Insurance Coverage Requirements


It is mandatory to have auto insurance coverage in California.


Minimum coverage required:


  • Bodily Injury Coverage: $15,000 per person / $30,000 per incident


  • Property Damage Coverage: $5,000 per incident.

Bodily Injury Liability (BI)


Covers other people's bodily injuries or death for which you are responsible. It also provides for a legal defense if another party in the accident files a lawsuit against you. Claims for bodily injury may be for such things as medical bills, loss of income or pain and suffering. Bodily injury liability covers injury to people, not your vehicle.

Property Damage (PD)


Covers you if your car damages someone else's property. Usually it is their car, but it could be a fence, a house or any other property damaged in an accident. It also provides you with legal defense if another party files a lawsuit against you. It is mandatory in most states.

Collision Coverage (COLL)


If your car is damaged or destroyed in an accident, collision insurance coverage will typically pay to fix or replace it. Types of covered accidents include hitting another car or hitting a stationary object, like a bridge or a tree. Collision insurance can also help if someone or something else hits your car while it's parked.

Comprehensive Coverage (Other Than Collision, OTC, COMP)


Covers your vehicle, and other vehicles (in limited scenarios…depends on your carrier and coverage) you may be driving for losses resulting from incidents other than collision. For example, comprehensive insurance covers damage to your car if it is stolen; or damaged by flood, fire, or animals. It pays to fix your vehicle less the deductible you choose. To keep your premiums low, select as high a deductible as you feel comfortable paying out of pocket. This coverage is not required by a state, but your lender or lease company will require it.

The Deductible


Auto insurance coverage includes a deductible amount, similar to your health insurance. A deductible amount may be $250, or $500 or another amount. This is the amount you will have to pay out of your pocket before the insurance company will pay the claim, for an accident repair, for example. The higher the deductible, the less money you will pay monthly on your insurance bill.

Under-Insured Motorist Bodily Injury Coverage (UNDUM)


Covers you, the insured members of your household and your passengers for injuries, damages or death caused by the negligence of a person with insufficient insurance. If you have an accident up to the limit of liability listed on your policy.

Un-Insured Motorist Bodily Injury Coverage (UM)


Covers you, the insured members of your household and your passengers for bodily/personal injuries, damages, or death caused by an at-fault uninsured or hit-and-run driver. If you are involved in an accident where the other driver is at fault but has no insurance, your policy will cover your medical expenses, up to the limit on your policy.

Un-Insured Motorist Property Damage Coverage (UMPD)


Covers your auto when property damage is sustained by an insured and the negligent operator does not possess insurance. If you don’t have collision coverage, uninsured motorist property damage coverage pays up to a certain amount for repairs to the insured car (some states have limits at $3,500; some are lower and some are higher). If you have collision coverage, uninsured motorist property damage coverage only pays your collision deductible (in some states).

Roadside Assistance


Also referred to as tow club, emergency roadside service, etcetera…this coverage covers your towing. Limits and mileage are different for each carrier.

Rental Car (RREIM)


Optional rental car coverage will not cover rentals for repairs unrelated to an accident. If you happen to break down, this coverage will not apply. It is not an expensive option and is always worth the money (average $30 per year). Covers renting a car if your car is not drivable or while your car is being repaired because of a covered accident.

Medical Payments Coverage (MEDPM)


Covers medical expenses to you and your passengers injured in an accident. There may also be coverage if as a pedestrian a vehicle injures you. This coverage applies regardless as to who is at fault. Medical payments may also cover policyholders and their family members when they are injured while riding in someone else's car or when a car hits them while on foot or bicycling. Coverage is limited to the terms and conditions contained in the policy.

GAP Insurance (GAP)


Also referred to as gap or loan/lease payoff, this coverage is optional for buyers who have leased or financed their cars. To buy this coverage, you must have collision coverage and comprehensive coverage. This coverage protects you if your car is declared a total loss and will reimburse you for the difference between the actual cash value of your car at the time of the loss and the amount that is owed to the finance company. It is usually much cheaper to buy gap insurance from an insurance company than from a car dealer.