Auto insurance is designed to financially protect drivers, passengers and anyone injured in an accident involving a car. Protection against loss is purchased according to an individual's needs, in order to cover damages against property, vehicles, and to extend medical coverage to parties hurt, in the event of a serious accident.
Who is Required to Have Vehicle Insurance
In the U.S., most states have laws pertaining to, and require all drivers to have valid, motor-vehicle insurance. Primarily, each state has pre-determined "minimum liability" standards that are designed to cover property damage to the no-fault party.
How Car Insurance Works
Primarily drivers contract with an insurance company and make premium policy payments either monthly, quarterly or annually in exchange for loss-coverage as outlined in each auto insurance policy. In the event of an accident, the insurance company will step in and satisfy costs left over after the driver's deductible is paid.
Types of Vehicle Insurance Coverage
There are five kinds of car insurance policies. The first is liability coverage, which covers a driver from being financially responsible to an injured party when the accident is self-fault. Second and third are collision coverage and comprehensive policies. Collision protection pays for repairs to the car, up to the value of the car. Comprehensive coverage covers set backs like auto theft or weather damage. Personal injury protection coverage pays medical bills of everyone in the car, and finally uninsured or under-insured coverage protects drivers when the other party at fault lacks insurance.
The Top 5 Benefits of Car Insurance
Insurance coverage provides financial security, offers complete monetary protection (as purchased) for a much lesser amount than would otherwise cost to satisfy, allows an insurance company to represent an individual in the negotiation process, provides the services of a claims adjuster to investigate fairly and finally protects innocent drivers against others without insurance policies.
Having vehicle insurance in place is a small but meaningful consolation in the event of an auto accident. Drivers can focus on healing, and fixing their vehicle without worrying relentlessly about the financial hardship that can result from these types of accidents.