In the insurance sector, we have heard the term AUTOP many times. In this blog, we will discuss what is AUTOP and what is covered under the AUTOP insurance policy.
AUTOP stands for ‘Personal Automobile’ and this term is basically used as the line of business code for personal automobile insurance.
Basic personal auto insurance is compulsory by most states and provides the insured with some financial protection in case of an accident. Basic personal auto insurance varies from state to state but most of the time it consists of bodily injury liability, personal injury protection, and property damage liability.
Understanding of Personal auto insurance and its coverages
An auto insurance policy can be understood as a contract between the insured and the insurance company that protects the insured against financial loss in the event of an accident or theft. In exchange for paying the premium mentioned as per the policy terms, the insurance company agrees to pay the losses due to an accident or any other reason as outlined in the policy.
Insurance coverage helps insureds to recover financially from unexpected events, such as car accidents, loss in earnings, medical payments, and other risks mentioned in the policy. In exchange for each coverage, the insured has to pay a premium to the insurance company. The cost of each insurance coverage often varies from company to company and depends on multiple factors. In the next section, we will discuss some major coverages of AUTOP.
Major coverages that are widely used in an AUTOP:
- Bodily Injury Liability coverage: If an insured is liable for a car crash, bodily injury liability coverage pays for the medical bills of the people who are injured in the accident (not including the insured).
In some states, only bodily injury liability coverage is mandated, and in others ‘combined single-limit liability coverage is required as per the law.
CSL (i.e combined single limit liability) coverage also covers the property damage of another vehicle, bodily Injury to the passengers with insured, and the bodily injury of the other driver. Liability coverage also helps to cover the payment for legal defense in the event the insured is sued for damages.
- Collision Coverage: Collision coverage in AUTOP reimburses the damage sustained to a personal automobile, due to the fault of the insured driver. This kind of insurance is generally added as an extension of a basic automobile policy to protect drivers in the event of damage from a collision. If the vehicle is totaled (where the cost to repair it exceeds the value of the vehicle) in an accident, the collision coverage will pay the value of the vehicle. This coverage is compulsory if the vehicle has a lienholder.
- Comprehensive Coverage: Also known as OTC (other than collision coverage), comprehensive coverage helps to pay the cost of damage i.e is not happened due to an accident. The reason for the damage can be the weather, a tree or a poll falling on the vehicle, car crash with an animal like deer or a dog. The reimbursement of the vehicle stolen is also covered under this coverage. This coverage is also compulsory in some states in case the vehicle has a lienholder.
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