Rachel Bodine graduated from college with a BA in English. She has since worked as a Feature Writer in the insurance industry and gained a deep knowledge of state and countrywide insurance laws and rates. Her research and writing focus on helping readers understand their insurance coverage and how to find savings. Her expert advice on insurance has been featured on sites like PhotoEnforced, All...

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Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products including home, life, auto, and commercial and working directly with insurance customers to understand their needs. She has since used that knowledge in her more than ten years as a writer, largely in the insurance...

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Reviewed by Leslie Kasperowicz
Former Farmers Insurance CSR

UPDATED: Nov 12, 2020

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In the car insurance world, ‘benefit’ refers to the amount of money paid by your insurer to cover a claim. If you make a claim for car repairs after an accident, for example, then you’ll receive a benefit to cover the cost of repairing your vehicle to pre-loss condition.

When you sign an insurance contract, your insurance company is agreeing to pay you a benefit in certain circumstances. The insurance company is taking on risk in exchange for insurance premiums. If certain circumstances occur, then the insurance company is required to pay you a benefit.

Benefits are different from claim limits. A claim limit is the maximum amount an insurer can pay for a claim. A benefit can be any amount – it could be the maximum limit of your policy or it could be a smaller amount.

Types of Benefits

Insurers pay benefits for all different types of expenses, including vehicle repairs, medical bills, and more. Common types of benefits paid by insurance companies include:

Bodily Injury Benefits: Bodily injury benefits include medical bills for yourself, your passengers, and any other people injured as a result of your actions. It can also include lost wages and other personal expenses incurred by you or other people.

Property Damage Benefits: Property damage benefits cover the cost of repairing your vehicle or other damaged property after an accident.

Rental Car Benefits: Many car insurance policies provide rental car benefits. If your car is in the shop for repairs, then your car insurance company will cover the cost of renting a car for the duration of repairs.

Comprehensive Coverage Benefits: If your car is damaged in a house fire or windstorm, or if it’s vandalized or stolen, then you might receive comprehensive coverage benefits.

Other Benefits: Any money paid by the car insurance company to the policyholder is considered a benefit. You might receive gap coverage benefits, for example, or windshield replacement benefits.