Insurance Basics

car insurance

Car insurance is insurance specifically for automobiles, trucks, motorcycles, and several other road-related vehicles. Its main function is to offer financial coverage against physical damage or injury caused by road accidents and from liability which can also arise from vehicular accidents. The minimum type of coverage is the bodily injury coverage, which is designed to pay medical expenses and rehabilitation costs if a driver is injured in an accident.

There are several kinds of car insurance available in the market. They all basically cover the same basic areas, which are liability, collision, and comprehensive. Bodily injury coverage generally covers the expenses for treating a person who has been injured due to the negligence of others. Collision coverage pays for the expenses incurred by the property of the insured party in case of a collision with another vehicle or object. Comprehensive coverage offers compensation for damage caused by fire, explosion, snow and hail, by lightning, vandalism, flood, vandalism, and theft.

The kind of car insurance policy you choose will depend on the vehicle you own and its current condition. If your vehicle is old, it may be useless to buy a new one or it may not be fully covered in the existing policy. For such vehicles, the only recourse would be to purchase comprehensive coverage. Comprehensive coverage will not only cover damage due to collision but will also cover theft, fire, vandalism, and natural disasters. This gives you the best protection at a low cost.

If your vehicle is a rental car, a personal umbrella policy will also prove useful. Such a policy will protect you in situations where the hired car is damaged or stolen. If the latter happens, you can cancel your insurance and claim straight from the rental car company.

Liability coverage and personal injury protection are mandatory in every car insurance policy. If you cause damage to another person’s property, the liable party may be held legally responsible. Similarly, if you cause harm to a third person while driving, you run the risk of being fined. Your insurer will take care of legal expenses incurred as a result of such damage incidents.

Some insurers will offer to waive legal costs related to accidents if you undertake to pay a certain amount upfront as a premium. Such cover is known as no-fault insurance. However, not all insurers offer this kind of service. Before deciding upon an insurance policy, you should compare quotes provided by various companies.

Author: Trimwell