Terms and definitions to help you better understand your automobile policy.

Additional Expense
Pays you for necessary additional expenses incurred as a result of a loss for which you are protected under comprehensive or collision coverages. These include rental cars, food, lodging and other incidental expenses. NOTE: This coverage may differ somewhat between companies. Please refer to your policy declaration and definitions for a full explanation of the coverage provided under your policy.

Bodily Injury Liability
Pays for damages that involve bodily injury to others for which you become responsible under law.

Collision
Pays for collision damage to your automobile and its equipment. There are several collision types and deductible options available to you.

In Michigan you have a choice of three different collision coverages.

Limited Collision - pays for damage to your vehicle only if the driver of your vehicle is not more than 50% at fault.

Regular Collision (often referred to as Standard or Basic collision) - pays for damage to your vehicle regardless of fault, subject to the deductible chosen.

Broad Collision - pays for damage to your vehicle regardless of fault. If you are not more than 50% at fault, the deductible is waived.

Personal Injury Protection
Pays for injuries to you and your family members regardless of who is at fault. It may also pay for the income you lose as a result of your injuries and for the financial support your dependents require should you die from your injuries.

Replacement Cost VS Actual Cash Value
Consider that you purchased several rooms of furniture for your home ten years ago, or even five years ago. If you had to do it again, in the event of a loss, for the same money, could you purchase the same quality? Would you spend two times or even three times as much nowadays? Very likely. With a replacement cost coverage endorsement on your homeowners policy you will be paid the cost to replace the lost items for like merchandise at todays price. You won't have to worry about the depreciation of your personal property or how inflation has affected your ability to replace your items.

With an Actual Cash Value policy, depreciation is applied to each item. Consider a leather recliner that you paid $800 for ten years ago...this same item may cost you $1000 to $1200. With depreciation, it is likely worth only $200 or $300, which would mean that you would need to pay the difference or settle for a chair of less quality. A replacement cost endorsement would allow you the $1000 or $1200 to replace it with a like chair.

The same goes for your home. In fact if your home is insured for less than 80 percent of it's replacement value, partial losses will not be paid in full. A replacement cost endorsement is usually available for a small additional premium. Your agent can assist you in completing a replacement cost estimator to help determine what the replacement cost of your home and personal property would be. Once you have this coverage in place be certain to purchase an inflation rider that will help keep pace with the escalating value of your home.

Road Trouble Service
Pays you up to the policy limit for expenses incurred if your automobile fails to operate. NOTE: This coverage may differ somewhat between companies. Refer to your policy declarations for a full explanation of your coverage.

Special Tort Liability
If you are involved in an accident in which you are considered more than 50% at fault, this coverage protects you for up to $400 toward another driver's collision deductible-or if they do not insure for collision coverage, up to $400 in damages.

Uninsured and Underinsured
Uninsured Motorist (UM) coverage will pay all sums for which you are legally entitled to recover as damages up to the UM limit of your policy.

Underinsured Motorist (UIM) coverage will pay the difference between your actual damages for bodily injury and the amount of liability insurance provided by the policy of the at-fault operator, subject to the UIM limit of your policy.

With the advent of No-fault companies are no longer required to offer this coverage. Please click here for a message from Citizens Insurance Company of America regarding whether or not this coverage may be right for you.