auto_Insurance.pdf | edocr
DEPARTMENT OF REVENUE AND REGULATION PHONE: (605) 773-3563 DIVISION OF INSURANCE FAX: (605) 773-5369 445 EAST CAPITOL AVENUE PIERRE, SD 57501-3185 South Dakota Division of Insurance Consumer Alert AUTO INSURANCE COVERAGE Understanding Your Auto Insurance Policy Auto insurance is an important purchase. Understanding what your policy covers is essential to ensuring you will have the necessary insurance protection when a loss occurs. Who Needs Auto Insurance? Automobile accidents can cause great financial and economic insecurity. Financial loss may include property damage, medical bills, and legal costs if a lawsuit arises. Anyone who owns a car should purchase auto insurance so that these important financial protections are provided. South Dakota requires the owner of a vehicle to purchase insurance or provide proof of financial responsibility. In addition, your auto lender may require you to purchase auto insurance to protect them against damage to a financed vehicle. Liability Coverage Most auto liability insurance policies contain three major parts: liability insurance for bodily injury, liability insurance for property damage, and uninsured/underinsured motorist coverage. • Bodily injury liability insurance does not protect you or your car directly. If you cause an accident in which other people are injured due to your negligence, this insurance protects you against their claims for damages, such as medical expenses, and lost wages. • Property damage liability insurance pays for any damage you cause to the property of others, such as damage to another vehicle, fence, or tree caused by a collision. • Uninsured motorist coverage protects you directly. This coverage pays if you are injured by a hit-and-run driver or a driver who does not have auto liability insurance. This coverage, in effect, takes the place of the liability insurance that the other driver should have purchased but did not. Underinsured motorist coverage applies when the other driver is at faul