Priority of payment relates to which type of losses under an automobile policy?

Priority of payment primarily relates to how claims for bodily injury and property damage are handled under an automobile policy. When an accident occurs, there can be multiple claims for damages or injuries, and understanding the priority of payment helps determine which claims get settled first and to what extent.

In the context of auto insurance, bodily injury refers to physical injuries sustained by individuals involved in an accident, while property damage pertains to damages incurred to vehicles and other property as a result of the accident. The priority of payment provisions ensure that insured individuals are adequately compensated for these losses, following certain legal frameworks and insurance guidelines.

This is vital in ensuring that victims receive timely and fair settlements, thereby avoiding disputes and potential litigation between parties involved. The focus on bodily injury and property damage allows for a structured approach in addressing the various claims that can arise from an automobile incident.