Class 1 Insurance

Class 1 insurance covers an individual occupying an owned vehicle, an individual occupying a vehicle owned by a resident relative, a pedestrian, or a bicyclist. Class 1 insurance, also written as Class I insurance, provides benefits to qualifying parties for any insurance policy in which premiums are paid.

Class 1 insurance covers a narrow group of people. In addition to covering the named insured, the policy will also cover spouses and relatives that the insured shares a residence with. The difference between Class 1 insurance and Class 2 insurance is that Class 2 insurance extends coverage to individuals who may not be resident relatives of the policyholder, but who may have permission to use or occupy the insured vehicle. Class 1 insurance is thus a more narrow coverage because it applies to a smaller subset of people.

This class of auto insurance coverage has the largest impact on uninsured motorist coverage. Uninsured motorist coverage does not attach to the vehicle; instead, it attaches to the individual that is injured in an accident. This means that an individual that is protected by Class 1 insurance is covered in all locations at all times.

Insurance companies may limit the amount of uninsured motorist coverage in some cases - specifically, if an individual covered by a Class 1 insurance policy is injured in a vehicle that he or she owns, or that is owned by a spouse or resident relative, but that does not have its own uninsured motorist coverage purchased for it. For example, an individual purchases Class 1 insurance for a car sedan, and the policy provides uninsured motorist coverage. He also owns a truck that does not have uninsured motorist coverage. If he is injured in the truck the insurer may limit the coverage, depending on the wording of the policy language.

In some states, class 1 insured individuals may stack uninsured or underinsured motorist coverage up to the limits on the vehicle involved in the accident.

It's a good idea to review your auto policy annually to make sure you've got all the coverage you need. The state-required minimums are insufficient for people with substantial assets including homes. For a relatively low cost you can add umbrella liability coverage that is over and above your home and auto policies that would kick in to protect your assets in the event of a substantial court judgment against you or a family member living in your home.