Understanding your auto insurance coverage

Everyone in the CNMI who drives is required by law to obtain auto insurance, but when people look at their policy, oftentimes there is confusion. Understanding what the terms and figures on your auto policy mean is vital to ensuring you have enough coverage to protect you.

Liability Coverage

If you are involved in an accident and you are at fault, your liability coverage will pay for the damage to the other car as well as medical care given to anyone who was injured. You are required by law to carry a minimum amount of liability insurance to cover third-party injuries and property damage. Liability coverage usually appears as three numbers; these three numbers are the limits of your policy for bodily injury per person, bodily injury per incident, and physical damage.

If your liability limits are 15/30/15, you are carrying $15,000 per person for injury, $30,000 per incident for injury, and $15,000 for physical damage. These are the maximum amounts your insurance company will pay out on a claim made against you. This coverage is considered standard.

To improve coverage, increase in liability limits is also available. Your 15/30/15 could increase to 25/50/25. Increase in limits may incur additional premium charges, depending on the type of policy you have and discounts applicable.

Comprehensive and Collision

Comprehensive and Collision coverages will appear on your policy as deductible amounts. Each of them is coverage for damage done to your vehicle, but they apply to different types of claims. If you have a loan on your car, in most cases, you will be required to carry both of these types of coverage.

Collision coverage is for damage sustained by your vehicle in the event of an accident. The deductible is the amount that you will be responsible for paying if a claim is made.

Comprehensive coverage is for damage sustained by your vehicle outside of an accident. This may include vandalism and damage caused by natural disasters. Again, there will be a deductible amount that you will be responsible for if a claim is made.

Uninsured Motorist Coverage

Uninsured Motorist is a coverage that protects you in case you are involved in an accident with another driver who does not have liability coverage and is at fault in the accident. This coverage will appear in a similar format to your liability coverage with the exception of coverage on property damages.

Medical Coverage or Personal Injury Protection

This coverage helps to pay for medical care of anyone in the vehicle who is injured in an accident. This coverage is considered optional in the CNMI.

These are the main types of auto insurance coverage. You may have other options available, but these basics will help you to understand the foundation of your auto policy.