Auto Insurance 1: Basics...
>>>Auto Insurance 1: Basics
The basics of car insurance begins with a policy. It's nothing to be afraid of, but it is something to be taken seriously. Your car insurance policy is your contract with your insurance company; an agreement that defines how much coverage you'll be given when certain incidents happen, and how much you'll be charged for that coverage.
The responsible thing to do is to learn about the various types of coverage offered so that you can make the correct decision when choosing an auto insurance policy. Note that individual states have requirements for minimum insurance coverage so you can tailor your policy to fit both your needs and what is mandated by state law.
Liability
There are only three states that do not require you to get liability coverage as part of your auto insurance policy. Liability coverage pays for any accidental bodily injury and property damages to others. This includes but is not limited to medical expenses, lost wages, the cost of damaged property including automobiles, and also defense and court cases.
Personal Injury Protection or PIP
Also required in some states, personal injury protection (PIP) pays for medical expenses and lost wages, without prejudice of who is at fault, incurred due to an automotive accident. By including PIP on your policy, you will meet the minimum requirements for many states.
Medical Payments
Similar to PIP, this coverage takes care of medical expenses for the owner of the insured car along with its passengers. The basic difference is that it only covers medical expenses, so therefore it's usually seen as something to cap off your existing PIP in your auto insurance policy.
Collision
If you get into an accident involving a collision with another vehicle or object, having this coverage as part of your auto insurance policy will take care of the damages to your own car. Simply having collision coverage is sufficient for some drivers, but it's always better to get more coverage than what you think you need.
Comprehensive
You know how people say they've got you covered? This coverage pays for the loss or damage that occurs outside of an auto accident. It includes but is not limited to loss caused by fire, flood, hail, defacement or theft.
Uninsured/Underinsured Motorist
Because of how car insurance policies can be tailored by individual car owners, there are instances when the coverage differs between two parties involved in an accident or when one person is uninsured or underinsured. This coverage makes up for that difference so that damages are covered regardless of whether there is an uninsured motorist involved.
Your auto insurance policy should be combination of what is listed here, so consider your state laws, your risk factors and the level of coverage you're most comfortable with before making that final decision. What would be a good car insurance policy for you? Share in the comments section what would work for you and why.
