Liability Coverage – If you have “liability only” on your vehicle, this is the coverage you have. Maine requires proof of this coverage for vehicle registration. It is state law to maintain liability coverage. Here is a breakdown of the auto liability insurance definitions.
Auto Liability – Coverage that protects against financial loss because of your legal liability for motor vehicle related injuries or damage to the property of others caused by an accident with a vehicle you own.
Bodily Injury Liability – This covers the costs associated with injuries and death that you or another driver causes while driving your car. This coverage applies to people who are not passengers of your vehicle.
Property Damage Liability – This coverage will reimburse others for damage that you, or a driver operating your car, cause to another vehicle or other property, such as a fence, building, or utility pole.
Medical Payments or Personal Injury Protection – Provides reimbursement for medical expenses for injuries to you or your passengers. It will also cover lost wages and other related expenses.
Uninsured Motorist Coverage — Reimburses you and/or your passengers for bodily injury when an accident is caused by an uninsured motorist—or in the case of a hit-and-run. In Maine, this also includes under insured motorist coverage, which will cover costs when another driver lacks adequate coverage to pay the costs of a injuries.
** In Maine, the minimum limits are $50,000 per person/$100,000 per accident for bodily injury, and $25,000 for property damage; $2,000 per person for medical payments; $50,000 per person/$100,000 per accident for uninsured/underinsured motorist coverage. F.A. Peabody Insurance recommends higher limits than these. **
Optional physical damage coverage – if you finance a vehicle, your financing company will require this coverage. Liability coverage as outlined above, does NOT cover damage to your own vehicle! Here’s the list of auto physical damage insurance definitions.
Collision – This optional coverage reimburses you for damage to your car that occurs as a result of a collision with another vehicle or other object—e.g., a tree or guardrail—when you’re at fault. While collision coverage will not reimburse you for mechanical failure or normal wear-and-tear on your car, it will cover damage from potholes or from rolling your car.
Comprehensive – also known as “other than collision” coverage – This provides coverage against theft and damage caused by an incident other than a collision, such as fire, flood, vandalism, hail, falling rocks or trees and other hazards. This coverage also includes glass damage.
Other optional coverage
Rental Reimbursement – if your car is damaged and you need a replacement while it is being repaired, your policy will reimburse the cost of a rental car. This coverage only applies if it is due to a covered loss.
Towing and Roadside Assistance – usually subject to per occurrence limits.
Gap Insurance – if you buy a new vehicle and the value decreases quickly, there is often a gap between what you owe on your loan and your vehicle’s value. This coverage will pay the difference in a covered accident.
