Below is a sample Auto Insurance Policy
used to illustrate how an auto claim might be viewed and settled by the insurance company.
- What Happened?: The insured ran a red light and collided with another vehicle.
- Caused $5,000 damage to his car
- Caused $10,000 damage to the other car
- A passenger in his car suffered injuries amounting to $3,000
- The driver of the other car was seriously injured and filed suit which was settled for $425,000.
- What Was Covered?:
- Insured’s car was covered under Collision for the full amount of $5,000 minus the $1,000 deductible.
- Damage to the other car was covered under Property Damage Liability for the full amount of $10,000.
- Medical expenses for his passenger was covered under Medical Payments for the full amount of $3,000
- The settlement of $425,000 was covered under Bodily Injury Liability for the entire amount.
- Explanation: In all cases the losses were within the policy limits and as such, claims were paid minus the policy deductible amounts where applicable.