What is Automotive Insurance?

DEFINITION

Auto insurance is a type of policy that provides financial compensation for losses incurred if your car is in an accident. In addition to the basic liability coverage required by most states, there are many tiers available to provide additional coverage for a variety of potential damages.

Definition and Examples of Automotive Insurance

Auto insurance is your financial protection for car ownership. This may cover the cost of damage to your car and the other driver's car. In fact, it may also cover related medical costs, depending on the circumstances.

If you've never been in an accident, chances are you'll never have to file an insurance claim. But chances are you will have at least one accident in your lifetime.

Imagine that you had an accident. Another driver hit you from behind at a red light. Both cars were damaged; You broke your neck as a result. Repair shops offer a fee of $3,000 to repair your rear bumper and replace the rear window. Another driver, at fault, calls his insurance company to file a claim, and you do the same. Other drivers' insurance policies cover the entire cost of repairing your car and most of your medical bills. Your insurance covers the rest.

But what if the other driver is not insured? They may not be able to pay anything out of their pocket. Fortunately, your insurance policy covers damage caused by other drivers. That way, you can recoup most of the costs.

Finally, assume that neither of you is insured. You can try your luck and sue the other driver for damages. Or you can accept the loss and pay for it yourself. However, the absence of insurance will cost you.

Notes

Accidents happen unexpectedly and can be fatal. According to CDC estimates, "More than 32,000 people are killed and 2 million injured each year as a result of motor vehicle crashes."

How Auto Insurance Works

Auto insurance is a contract between you and the insurance company. This protects you from financial loss in the event of an accident or theft. In return for paying the premium, the insurer agrees to pay for the loss, less any amount you will have to bear, as described in your policy

Have lower insurance rates and you can avoid claim problems. By continuing to have car insurance, you have a legal license to drive. You also get protection for future claims that may occur.

Types of Automotive Insurance

Car insurance may pay for repairs to your vehicle after an accident, depending on the type of coverage you choose. Vehicles are often big investments, and you want to protect them. Comprehensive insurance and collision insurance each offer protection against physical damage. However, this involves a lot of rules about what is included and what is not.

Personal Liability and Property Damage

Personal liability and property damage (PLPD) is the minimum coverage required by law in most states. If that's all you have, you'll at least be spared some of the cost of the damage you cause in an accident where you go wrong. PLPD does not cover physical damage to your own car. However, it provides protection against other types of loss.

These losses include:

Injury, pain and suffering to the other party depends on the laws of your state

Property damage

Medical costs for you (if you live in the state without fault)

Comprehensive Protection

Comprehensive protection applies to everything other than crashes. Fire, theft, vandalism, wild animals and storm damage all fall into this category. In most cases, comprehensive insurance is required for road assistance. Also, it is required to purchase collision protection.

Collision Protection

Collision protection protects your vehicle from accidents. Collisions with other cars, mailboxes, lampposts, trees and other inanimate objects are covered. There is usually an amount to be paid before you can get the vehicle repaired.

Collision protection is usually needed when you are at fault or have no idea who damaged your vehicle.

Do I Need Auto Insurance?

Several years without a claim may make you wonder whether you need to have car insurance at all. Maybe you think that because you are a safe driver and nothing ever happens, you don't have to pay a premium. However

Lokasi:

Berbagi :