An auto insurance is any contract between you and an insurance company which protects you from financial loss when you get involved in an accident. Auto insurance also comes with its policy, and if the policies are adhered to, the insurance company will be liable to pay for any loss incurred during the accident in agreement with the policy of the insurance. Auto insurance covers liability, property, and medical coverage.
Property damage in auto insurance covers theft of your car or damage to your vehicle which means if you insured your car, and your car gets stolen or damaged in any way, your insurance company is liable to pay for the car damages or provide you with another vehicle.
Liability coverage in auto insurance deals with legal responsibility for injuries to others or property damage. Under the coverage of responsibility, if you destroy another person’s car or cause bodily harm to someone else in an accident, your insurance company is liable to pay any legal fees which you might incur in this situation.
The medical coverage deals with hospital bills. Under this part of insurance, if the person you caused bodily injury to has to be treated in a hospital or has to be rehabilitated, then your insurance company is also liable to pay the bills for the other person’s treatment. If there is a need for a funeral, that is if an individual dies, then your insurance company is also liable for funeral expenses.
An auto insurance policy is divided into several coverages, and you are required to purchase some in most states but not all of the coverages. If your vehicle is being financed, it is good to note that your lender will have requirements. However, in some states, you are required to maintain a minimum level of insurance, however, if you decide to go above the minimum, then your insurer will tell you the different types of car insurance and what they cover and also which of the insurance covers suits you best.
Based on the variance of state laws, not all the following coverage are found in some states, but most states have one or more of the insurance coverages in common. The following are the types of insurance coverage offered to clients by insurance companies based on automobiles;
- PIP; this insurance covers all the medical expenses from a car accident regardless of the person at fault for the crash. It includes both the bill of you and the passenger in the car at the time of the crash. It also covers the people listed in the policy such as the driver and household members. The PIP covers medical bill and also those bills not included in the in health insurance like lost income, funeral or child care. This insurance is required only in 15 states and in other states it might be optional and not available in some.
- MedPay; there is a similarity between this insurance and PIP but the MedPay is limited as it covers only medical expenses from accidents for yourself, your passenger, and other policyholders. It is a supplement for those without health insurance.
- Collision insurance; this coverage deals with when your car collides with an animal or any other thing such as a tree, wall, etc. or crash where there is no collision with an object. Thus, if your vehicle rolls over and the coverage will cover the cost of repair for the car or if it cannot be fixed, the coverage will get you another car. The insurance is mostly required by companies such as a finance company that grants leases or loans and it is not made mandatory by state laws. The collision insurance, however, you cannot get it without the comprehensive coverage.
- Comprehensive insurance; this insurance covers instances that are not accidents which accident and liability insurance cover. Such cases are theft of your car or natural disaster e.g. a tree falling on your vehicle. It is also optional unless it is a requirement made by your lender and is purchased with collision insurance.
- Liability insurance; this coverage is divided into two which are bodily injury liability and property damage liability. Under this insurance policy, in an auto accident, the responsible party would support the other parties’ medical bills and vehicle repairs. This policy does not protect you or the passengers in your car if both of you should get injured during the accident and will not cover damages done to your vehicle from the crash.
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