In the context of automobile insurance, what does 'Supplementary Payment' refer to?

The term 'Supplementary Payment' in automobile insurance refers to additional expenses that are covered by the policy beyond the standard limits of liability coverage. These payments are designed to cover specific expenses that may arise during the claims process, which are not directly related to the damages or loss suffered but are necessary for the overall defense of the insured.

For example, supplementary payments can include costs such as legal defense fees incurred when the insured is being sued, the expenses for bail bonds up to a specified limit, or costs associated with settling a claim. These payments are included as part of the policy provisions and help to alleviate the financial burden on the insured, ensuring that they are not solely responsible for additional out-of-pocket expenses related to claims.

This additional coverage is valuable because it helps protect the insured from unforeseen expenses that could arise after an accident, offering peace of mind and financial security.