Commissioner’s Corner:
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. I hope you
find this information helpful in purchasing auto insurance.”
– Kim Holland, Oklahoma Insurance Commissioner
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. Oklahoma requires the owner of a vehicle to purchase insurance
and 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, lost wages, and pain and suffering.
• 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 fault and whose limits of liability are
lower than the d