What is Auto Insurance
The primary function of automobile insurance is to provide financial protection against physical damage, and bodily injury that are the result of traffic accidents. Depending on the coverage type, they can also offer protection against theft and vandalism. Some policies will also provide coverage for damage from things other than traffic accidents, such as hail, flood, and fire.
8 Types of Auto Insurance
As insurance regulations vary between finance companies and from state to state, it is important for automobile owners to ensure they have the proper level of insurance coverage. The first step is to understand the various types of insurance coverage.
•Personal Injury Protection (PIP)
Definitions of Coverage Types
The Collision policy covers damage to your vehicle which is the result of a collision with another vehicle or object.
The Comprehensive policy covers damage to your vehicle that does not occur in an accident. This includes damage from fire, hail, theft, flood, vandalism, ect.
The Liability policy provides coverage for accidental bodily injury and property damage. Injury liabilities include medical expenses and loss of wages. State laws will determine the minimal amount of liability coverage that is necessary.
PIP coverage is a requirement in some states and will pay for medical expenses for the insured driver for treatment due to an auto accident.
Rental Reimbursement coverage will pay for part or all the rental car expenses if your car is damaged in an accident.
An Uninsured Motorist policy will pay for damage to your vehicle if it is caused by another driver who does not have insurance.
An Underinsured Motorist policy will pay for damage to your vehicle if it is caused by another drive whose insurance does not provide sufficient coverage.
A Medical Coverage policy will pay for medical expenses regardless of who is at fault in an auto accident.
Why Automobile Insurance is Important
Most US states require you have at least some level of insurance coverage. In addition, when a car is financed, the vast majority of loan companies require that insurance is kept on the vehicle for the duration of the loan.”