All about car insurance

There is much more to be known about car insurance than merely knowing about the fact that is it is very necessary. Car insurance helps in covering up the costs in case of a mishap causing damage to the car, its driver and the other passengers who were sitting in the car. At times the damage caused to the car is even more than the actual cost of the car itself. Due to this reason, an insurance policy is taken that incurs the costs in case of any accidents. The cost covered by the insurance policy depends upon the type of coverage that is bought.

 

The types of Coverage

The type of coverage that a person gets depends on the laws existing in the state since most of the states have their set of required and minimum auto insurance laws, on the amount of money the user will spend in case of an accident and on the value of car.

Following are some of the types:-

  • Collision coverage

This one pays for damages caused to the car if the person hits something.

  • Liability coverage

It is required by most states and it covers both the property damage and as well as injuries to others caused by the person’s car. It is actually money needed when the person suffers an accident and it is his own fault.

  • Medical coverage

It covers the medical expenses as a result of an accident.

  • Comprehensive coverage

It covers damage that happens to the car that is not due to a collision for example if a tree falls on car, or if is damaged in a flood.

  • Personal Injury Protection

This coverage is very similar to medical coverage with the difference that medical coverage will cover everyone injured in an accident but Personal Injury Protection only covers the owner.

  • Uninsured motorist coverage

It is of two types- one that takes care of damage caused to car if hit by a driver who does not have liability insurance and the other that takes care of damage caused to the body like hospital bills to you or the passengers in car in case of an accident with a driver who does not have any insurance.

  • Underinsured motorist coverage

It is also of two types. The first one pays for the damages to the car if hit by someone who does not have enough money insured to pay for the damage. For example, in case your car is hit by someone with only $5,000 worth of liability coverage and there is an $8,000 worth of damage caused to car, this coverage will pay the difference. It is also needed if there are injuries caused to you or your passengers which cannot be given by the other driver.

  • Rental reimbursement

This pays for the rented car while your own is in the shop due to an accident.

The primary aim of car insurance is providing financial protection against any kind of physical damage or the bodily injuries that maybe caused due to traffic collisions and against liabilities that arise there from.