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Auto Insurance

Car Insurance Explained


No matter in which state you may reside the fact is you are mandated by law to carry a certain level of auto insurance. In addition to the legal requirement from the states (and from lenders as well to have full coverage protection) this insurance will also assist you in protecting you and your family financially should an accident or some other event befall you as a driver.

What is it?

Auto insurance is a form of coverage that gives you financial protection should your car be damaged or any passengers or other drivers be hurt. If you carry this coverage, the insurance provider instead pays for most, if not all, of the expenses rather than forcing you to pay for medical and/or car repair or replacement costs out of pocket.

Who benefits?

As previously stated, it is a legal requirement that all who drive cars must be insured. When pulled over by police not only will officers request your driver’s license and car registration, but also proof of insurance.

How it functions

When a vehicle is involved in an accident, the individual who is deemed to be at fault is liable for coming up with the money to pay all the costs that result from said accident. This often overwhelming sum will include the expense to repair or replace the other driver’s or drivers’ car(s), any medical costs of those in the other vehicle(s) and in yours, and to also repair any damaged property as well.

When purchasing good car insurance, owners are in charge of determining how much coverage they desire. This is what will help in determining the most that an insurer will be obliged to pay. In addition to the coverage levels, a policyholder is also free to choose the size of his or her deductible, which is how much the insured driver must first pay before the insurer provides its compensation. This amount varies, usually in increments of $500 and $1,000; generally, the higher the deductible will mean the lower the premiums one has to pay on a monthly (or otherwise) basis.

Different kinds of coverage available

There is a myriad of coverage types, which vary from state to state and how and to what degree the driver wishes to be safeguarded. The following are the predominate types out there:

• Liability (Injury/Death)– This is what pays for medical or other costs incurred by those injured or killed in an accident for which the policyholder is at fault.

• Liability (Property Damage)– This coverage compensates for damages to the property of the other drivers or affected individuals, including the vehicles and structures, etc.

• Collision– This component of coverage pays out for damages to your own vehicle that are the result of an accident, if it is your fault or otherwise.

• Comprehensive– This type of coverage compensates for any covered damages to your vehicle that result from anything other than an accident. Examples include the financial consequences of damage or loss from severe weather, theft, vandalism, etc.

• Medical Payments – This covers you for injuries and even to help your survivors to pay for expenses for funerals should the worst befall you and more.

Big benefits

The big plus in carrying good auto insurance is the help it provides you in covering the costs if you are involved in some kind of accident or other event or peril that affects you. You simply make your premium payments consistently and on time and, in return, you can enjoy the peace of mind in knowing that you and your family are financially protected.