The benefit of an insurance policy is very simply the amount of money that your insurer can pay out in the event of a claim against that insurance.
Specifically it is the contractual payout that is agreed to by the insurance provider in the event of a claim by the policy holder.
So the benefit is not the same as a claim limit (which is the maximum an insurer can pay out in the event of a claim), though in some cases it may be the same amount – but rather a specific number related to a specific payout under a policy.
Is there a maximum benefit payable under my auto insurance policy?
Yes, this is the claim limit on the policy – there may be two (or more) limits set on your policy. Typically there may be a “per claim” limit, which is the maximum benefit payable in the event of any single accident and there may also be a “policy” limit, which is the maximum benefit payable under the whole policy covering multiple claims or even a single claim.
What kind of benefits will my policy pay?
It’s important for you to check the wording of your policy, to understand which benefits may be paid under the terms of that policy as it would be impossible to list all permutations here but some major areas which may be covered for benefit provision are as follows:
- Bodily Injury – The coverage for bodily injury may be limited to other people and not include yourself, particularly if you have automobile liability insurance only – the benefits in this case may include medical treatment, and compensation for lost work, etc.
- Property Damage – Once again if you have automobile liability insurance this will likely only extend to third party property. The benefits in this case may include repair/replacement of destroyed property and cover any losses incurred by the property owner.
- Rental Cars – rental car companies may require you to take separate insurance as benefits under most policies may not cover the cost of replacing a rental car.
- Full coverage – in this case, excluding acts of “force majeure” (or superior force/”act of god”), benefits may be paid in most reasonable circumstances of damage or loss to your vehicle – such as fire, theft, etc.
- Financing/Hire Purchase Payments – if you have GAP insurance the benefit may cover the difference between the actual value of your insured vehicle and the payments you are currently making/balance you have outstanding.