What do supplementary payments in a personal auto insurance policy cover?

Supplementary payments in a personal auto insurance policy are designed to cover specific costs that arise from a legal claim or lawsuit, in addition to the primary coverage limits of the policy. One of the key features of these supplementary payments is that they can cover court costs and expenses related to loss of earnings for the insured while they attend court, as a result of the claim.

Choosing supplementary payments to include costs beyond policy limits is important as it ensures that policyholders are not financially burdened by additional expenses incurred during legal proceedings. These payments are generally made in addition to the policy limits for liability coverage, meaning they provide extra protection that a standard liability claim would not cover.

In contrast, the other options focus on aspects that are typically dealt with by standard policy coverages rather than supplementary payments. For example, the cost of replacing a stolen vehicle is usually handled under the comprehensive coverage of the auto policy, while medical expenses for passengers fall under the medical payments or personal injury protection coverage. Legal fees and lost wages may seem relevant, but only the specific loss of earnings related directly to attending court is covered by supplementary payments.