What Exactly is Automobile Insurance
Car insurance is designed to provide protection to you in the event you injure others, including property damages and bodily injury, as a result of an accident˳ Furthermore, depending on the coverage and plan you have, it will provide reimbursement to you for injuries and damage done to your vehicle˳ In its most basic form, car insurance is a contract, made between you and your carrier˳ You agree to pay a set price, referred to as premiums, in exchange for selected coverages˳
The type of policy you have is written out in detail in the declaration page, so make sure you always read it and understand the exact coverage you have˳ It’s always smart to go through your policy thoroughly and make sure you don’t have any overlapping items, such as rental insurance˳ This is often covered on your credit card agreement, so you might just be wasting money having it˳ Remember, you can always upgrade your insurance and cancel it anytime˳
What does automobile insurance cover?
This is a common question new customers always ask agents˳ The answer is, it depends on the plan and policy type you buy˳
There are four main categories of protection˳
* Liability Insurance
This covers injuries to the other party, damage to their vehicle and also property damages˳ If you have a vehicle not worth very much and you don’t drive too often, liability only insurance may make sense˳ It is much cheaper than comprehensive, with pricing in some states starting at $29 for good drivers˳
* Collision Insurance
This will pay for damage and medical costs pertaining to you˳ It’s smart to buy it if your vehicle is newer and worth more than $12,000˳
* Comprehensive Insurance
This is the gold standard of coverage˳ This type of policy costs more but has wide ranging protection˳ It coincides with collision and will repair of replace your automobile for events that cause damage or a loss, not relating to an vehicular accident˳ This means if your car is stolen, you will be protected and can get it replaced for its current market value˳ Also, weather related damages done to your auto will also be covered˳ Typical examples are flooding, fires and animal incidents˳
* Uninsured Motorists Insurance
There are more people driving on the roads uninsured than ever before˳ Buying uninsured motorists insurance will protect you from these lawless drivers˳ If you get involved in an accident with someone with no insurance, you will insured up to your policy limits˳
It is important to know that every state has different insurance mandatory coverage and laws˳ You should familiarize yourself with the mandated limits in your state and stay current with changing laws˳
The Most Common Car Insurance Coverages
Each type of coverage you purchase contains a set of limits, policy terms and multiple conditions˳ Bodily injury is an all important one˳
It will pay for, as the name implies, bodily injuries sustained from an incident you were found to be at fault causing˳ A good liability policy will also pay for legal fees, up to certain predefined limits, in the event you are sued in court˳
Liability will also pay for damages you caused to another persons property, almost always their automobile, after an at-fault accident occurred˳ Medical insurance will most often cover you and the passengers riding along in your vehicle who were hurt in a crash˳ Another advantage of having good medical coverage is, it will cover medical costs in the event you are hit by a car walking as a pedestrian˳
There are several states that have PIP or personal injury protection laws as opposed to medical coverage˳ Some people refer to this as no-fault coverage˳ PIP insurance will most often pay for medical, funeral, income loss and a variety of other costs that relate to bodily injuries sustained after a vehicle accident˳
What you Need to Know Before Buying Car Insurance
The most important thing to think about when buying auto insurance is getting coverage that meets your needs˳ What are your specific needs, including your budget and tolerance of risk˳ Remember, you should think of a worse case scenario, such as buying enough coverage to replace your car and protecting the assets you have accumulated˳
In general, the higher your personal net worth, the more insurance protection you will need˳ Lawyers also target people who have large amounts of money with vigorous lawsuits, claiming pain and suffering damages˳ Your insurance plan should follow your asset growth and protect you to the fullest˳
Source by https://ezinearticles˳com/?Vehicle-Insurance-Basics&id=9571069
