Auto insurance is coverage for automobiles, trucks, motorcycles, and several other road vehicles as well. Its primary function is to offer financial coverage against physical damage or injury caused by road accidents and against legal liability which can also arise out of wrongful acts in a vehicle on the road. It is an act of a third party, which implies that he has neither direct control over the vehicle being driven nor has any authority to make payments on its behalf. The insured party, on the other hand, assumes all responsibility for damages incurred. This insurance provides coverage against injuries and property damage resulting from auto accidents. It covers damages due to negligence on the part of the owner or driver of the automobile.
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There are a few types of auto insurance available depending on the extent of the damage. Personal injury insurance covers accidents resulting in personal bodily injuries to the insured party. Property damage coverage of car insurance covers damage to the vehicle due to theft, vandalism, or collision due to other drivers or weather conditions. Medical bills coverage and windshield replacement coverage are examples of property and medical bills insurance. The latter type of policy protects against losses on the basis of negligence on behalf of the owner of the automobile. The former type covers only bodily injuries sustained by the insured and third parties and may not compensate for any legal or medical expenses incurred.
Classic car insurance is a specialized auto insurance policy offering coverage for antique, rare, collector’s, and classic cars. This insurance coverage typically covers the full value of the vehicle at the time of the loss, with some coverage options that allow the insurer to reimburse up to a certain percentage of the value of the vehicle or a pre-determined amount for a specified period after the date of loss. Some classic car policies pay out the whole face value of the vehicle, while others may only payout a specified percentage, depending on the age and condition of the vehicle as well as its historical value. Policies for classic cars generally have higher premiums than normal auto insurance because they are typically considered to be extremely valuable. However, a policyholder has the option to reduce his or her premium by agreeing to specified levels of coverage.
Another type of coverage used by car insurance companies to protect their clients is Comprehensive and Uninsured Motorist Coverage (UMC). Comprehensive coverage pays for damage due to fire, theft, natural disasters, vandalism, malicious mischief and collision. Uninsured motorist coverage is intended to cover the cost of damages sustained by motorists who are operating vehicles in the absence of established liability insurance. Some states have rules allowing motorists to choose the coverage they want rather than having to get their auto insurance from the company that they purchased the vehicle through. In addition, several states require drivers to carry an uninsured motorist policy in order to legally drive a vehicle in these states.
The cost of auto insurance can also increase after a motorist has been involved in an accident. In order to recoup the cost of medical expenses and property damage caused by the accident, the motorist will be required to pay a deductible. In most cases, the deductible is the amount that the insurance company asks for before they pay the claim. If the driver does not have enough money in his or her pocket to cover all of the expenses, the auto insurance company will then take out a loan against the vehicle, which will become the company’s debt in the event of an accident. In addition, if there are still unpaid debts on the vehicle after the deductible has been paid, the auto insurance company may choose to auction it off to cover the balance.
The type of coverage driver purchases will have a great effect on the auto policy premium that he or she pays each month. For example, a person who drives a small, inexpensive vehicle will likely pay less in premiums than someone who drives a sports car or something with more expensive features. However, the type of coverage a person chooses can also affect the amount of premium that he or she pays. People who drive a sport car are more likely to receive tickets than people who do not. The insurance company will also raise the premium on the sport car based on the likelihood that the vehicle will be stolen more than other cars that are not as popular.