Auto insurance is financial protection for drivers, passengers and those injured in a car accident. It is basically protection against loss, purchased by an individual in order to cover damages against property, vehicles and to pay for medical coverage or those hurt in the accident.
Is Auto Insurance Required?
Most states in the US require all drivers to have insurance. The states with this requirement have a “minimum liability” standard designed to cover damage done to a vehicle by another driver who is negligent. The minimum liability is the least amount of coverage a driver can have and still legally drive.
Car Insurance Basics
A vehicle owner purchases insurance from an insurance company. The owner then makes premium payments either monthly, quarterly or annually. This buys the policy holder coverage for loss as outlined in the auto insurance policy. If an accident occurs, then the insurance company pays certain costs remaining after the driver pays the deductible.
Types of Coverage
Car insurance policies are available in five types.
1. Liability coverage covers a driver who is responsible for an accident. The coverage pays for damages occurred by the driver who is not at-fault.
2. Collision coverage pays for repairs to a car, up to the value of the car or limits set by the policy.
3. Comprehensive coverage includes financial coverage for numerous things, such as auto theft and weather damage.
4. Personal injury protection coverage pays medical bills for people injured in the car during the accident.
5. Uninsured or under-insured coverage protects drivers when the at-fault driver lacks insurance or doesn’t have enough.
Benefits of Car Insurance
Insurance coverage is financial security for vehicle owners, and offers monetary protection for less than it would cost to pay out of pocket. Insurance coverage allows an insurance company to represent the policyholder during negotiations, and provides the services of a claims adjuster to thoroughly investigate the facts of the accident.
Vehicle insurance is a great help in the event of an auto accident. The policyholder doesn’t have to worry about going broke trying to pay numerous expenses.