"20/40" refers to the dollar limit for single claimant and total dollar limit for all injury claims in a single injury accident. This notation means there is $20,000 worth of insurance for a single claimant and no more than $40,000 total for all injuries to all people in a single injury accident.
Another reason to have insurance is they have a duty to defend you. Your insurance company must provide you with an attorney to defend any cases brought against you under the policy. Another good aspect of insurance is "Med Pay." States are very different when it comes to payment for medical bills incurred for injuries. Some states will pay for unlimited medical as long as it is reasonable and related to a motor vehicle or motorcycle accident. Other states make the insured purchase certain increments of Med Pay insurance. You must check with your agent as to how medical pay is handled in your state.
When there is a loss, as an insured you have certain duties to the insurance company. For example, you must notify them promptly, you may be required to cooperate with the company in its investigation and adjustment of the claim, you must promptly submit any medical bills, they may have a right to examine you under oath (this should be done with your attorney present), and they may have a right to ask you to sign authorizations for medical records.
No-Fault Insurance
Many states adopted a No-Fault law that covers motor vehicle accidents. A No-Fault law is just that, it mandates certain bills and damages to be paid by your own insurance company no matter whose fault the accident was. Before No-Fault, the courts were clogged with all types of cases where individuals were suing the other driver for damage done to the vehicle, medical bills, wage loss, etc. Many No-Fault states have your own insurance company pay for such things like medical bills not covered by health insurance, damage to the vehicle, and wage loss. These states normally still preserve the right to sue the at fault driver for your pain and suffering.
This information is not meant to be a complete discussion of all the technical points relating to auto/cycle insurance. It is written in the sincere hope of helping you provide the knowledge to protect you and your family. Contact your local insurance agent to review your coverage and learn how your state's law affects your insurance.
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