What is Auto Insurance?

Auto Insurance

Auto insurance is a contract that protects you against financial loss in the event of an accident or damage protected against. This contract is between you and the insurance company and it contains policies which the company agrees to adhere to once you have payed your premiums. Basically, it provides coverage for Liabilities such as property damage, theft and the likes. It also provides protection on medical risks such as injuries and funeral expenses in some instances.

In most scenarios, these auto insurance policies are priced differently and customized to cover your exact perils, and there is no specific amount for the premiums therefore. The insurance laws are governed by the state and the policies renewed after six months or one year in other cases. When seeking cover for your car, the aforementioned might not apply in this case, but the three explained below can. They are however optional but if taken to consideration, here is what they entail.

Collision

Just like the name suggests, it will provide cover for you in the event of a collision with another car or an object. Since this is a “self-inflicted” scenario, the insurance will not pay for the damage caused to the car but will compensate for the potholes and rolling the car.

Comprehensive

For this one, you are covered against theft or damage caused by any other thing than a collision. These may be natural catastrophes that range from flood, jail, fire, falling trees and hazards of the like.

Glass coverage

As for glass coverage, it provides insures your windshield from any form of damage. With this however, you can simply buy an extra one for convenience.

The collision and the comprehensive coverage

Mainly work with the value of the car and not necessarily what you paid for. If the car is stolen for example, it leaves a gap between what you owe and the insurance coverage. It is advisable to take a gap insurance to cater for the difference.

Is it really a must that you have an auto insurance coverage?

In the United States, the requirements vary depending on what state you are in. A great number of them require you to carry at least these two,

Bodily injury liability

It caters for costs brought about by injuries or death that you may cause while driving your car. In some scenarios, you might be having a driver carry you and the same terms will still apply.

Property damage liability

This gives you cover for some the damages you might have caused to other vehicles or property while driving such as fences or buildings.

Many states however recommend drivers to have a medical payments or personal injury protection (PIP) that will cover your passengers as well. As if this is not enough, the lost expenses and wages are secured and you need not to worry.

Uninsured motorist coverage

In the case that a driver who is not covered by an auto insurance causes an accident with your vehicle, or in worse scenarios when the motorists escape, then this is the only cover that will come in handy and clean the mess for you.

In any case, auto insurance is the only solution to unprecedented damage that might occur anytime on the road. It’s important to take precaution early enough to avoid extra expenses.

Interested in learning more check this out Auto Accident Loss

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