Bodily Injury Liability Coverage
Bodily injury liability coverage is usually mandatory and pays for physical injury and death caused to others by the driver responsible for an accident. This coverage pays for things like medical bills, loss of income and pain and suffering, but only to parties to whom the insured is legally liable. It also provides legal representation for the policyholder in the case of a lawsuit.
Most states set minimum levels of bodily injury liability coverage that drivers must have.
Collision coverage is for physical damage to the insured’s car when it collides with certain objects, like a tree or another vehicle. While this type of coverage is not always required by law, your lender or leaseholder may require it.
You’ll be offered different deductible amounts for collision coverage. Be sure to pick an amount you can afford. The deductible is the amount you have to pay out of pocket in the event of a loss.
Comprehensive coverage is for automobile damage from a covered loss other than a collision, such as fire, theft, severe weather, floods, vandalism or contact with people, animals, or falling objects.
Comprehensive coverage also pays to fix your windshield if something cracks it.
You’ll be offered different deductible amounts for comprehensive coverage. Be sure to pick an amount you can afford. The deductible is the amount you have to pay out of pocket in the event of a loss.
Together, collision and comprehensive are often referred to as “physical damage” coverages.
Sometimes called "med pay," medical payments coverage pays for reasonable and necessary medical or funeral expenses that result from bodily injury or death after an accident—regardless of who is at fault.
You may be asked to select the “limits” of medical payments coverage, which is the maximum amount the insurance company will pay for covered losses.
Personal Injury Protection (PIP)
PIP covers reasonable and necessary medical expenses, lost wages and other damages from an accident—regardless of who is at fault. PIP covers the policyholder and anyone else living in the home, as well as non-related passengers and pedestrians harmed in the accident. PIP is only available in no-fault automobile insurance states.
Property Damage Liability Coverage
Property damage liability coverage is usually mandatory and pays for damage you do to someone else's car or property when you cause an accident. This coverage provides protection for those found to be legally liable in an accident.
Almost every state sets minimum levels of property damage liability coverage that drivers must have.
If your car suffers significant covered damage, it may be declared a “total loss.” This means that it would cost more to repair your car than the car is worth, which would be determined by comparing the car’s Actual Cash Value (ACV) to repair costs.
Uninsured and Underinsured Motorist Liability Coverage
When you choose uninsured motorist liability coverage and you're involved in an accident with another driver who has no insurance, your insurance company will pay for covered damages up to the limits you chose when you bought the policy.
When you choose underinsured motorist liability coverage and you’re involved in an accident with another driver who doesn't have enough coverage to pay for the damage he or she causes, your insurance company will pay for covered damages up to the limits you chose when you bought the policy.
Actual Cash Value (ACV)
Actual cash value is the replacement cost of your damaged or lost property at the time of the loss, minus the amount the property has depreciated.
Additional Living Expense
Additional living expenses are costs that you may have had to pay as a result of a covered loss. This coverage amount is subject to policy limits.
An appraisal is an estimate of the damage to or the value of your property and/or possessions. Appraisals are made by a company-provided Claims Representative or Appraiser.
Conditions are the provisions, listed in your insurance policy, that include the rights, duties and responsibilities of the policyholder and the company.
A deductible is the amount you will pay out of pocket in the event of a covered loss. Generally speaking, the higher the deductible you choose, the lower your premium.
Depreciation is the decrease in value of property over a period of time.
The effective date is the date that your insurance policy begins. This date is listed on your policy’s declarations page.
An endorsement is an addition or an amendment made to your standard homeowners insurance policy.
Exclusion refers to the perils, people, property or locations that are not covered by your homeowners insurance policy.
Fire insurance is the part of your homeowners insurance policy that protects you against losses from fire, lightning and other causes defined in the policy.
None of Kemper’s businesses offer flood insurance. For more information, visit floodsmart.gov.
Loss of use
Loss of use refers to bills or expenses you have as a result of losing the use of your residence.
This material is for general informational purposes only. These definitions are broad descriptions of generally used insurance terms. They are not intended to alter or amend any insurance contract in any way and, in fact, these terms may mean something different in your insurance policy than how they are defined here. They also may mean something different, or may not apply at all, in certain states. You must check an actual insurance policy for a complete description of all coverage terms and conditions applicable to it. In the event of a disagreement between the definitions we are providing in this Glossary and an insurance policy, the terms of the policy will apply.