What do supplementary payments provide in an insurance policy?

Supplementary payments in an insurance policy are designed to enhance the coverage provided by the policy without reducing the policy limits. These payments are typically made in addition to the amounts available under the primary coverage. For example, in an auto liability policy, supplementary payments might include costs such as legal defense fees, the cost of bail bonds, and certain other expenses related to a claim. This means that the insured can benefit from additional financial assistance in the event of a loss, while the coverage limits for primary benefits remain intact.

The main purpose of supplementary payments is to ensure that the insured is not financially burdened by certain costs associated with managing a claim or legal obligations, as these payments do not count against the limits of the policy. Therefore, this additional coverage can be extremely beneficial in times of need, making the choice of supplementary payments an attractive feature in many insurance policies.