Auto insurance is a must in today’s world. If you were to have an accident, no matter what the circumstances, you would not be covered unless you have auto insurance. Even if you were to be involved in an accident where the other party was uninsured, you will still be covered. There are also so-called umbrella policies available to cover you and your family in the event of financial disaster. Therefore, auto insurance is a must in today’s world.
Auto insurance is a legal obligation and it protects you and your family members. Your auto policy will pay you for damages you cause to another person or your property, whether or not you are driving anyone else’s vehicle (including their permission). Your auto policy just covers personal liability, whether you are commuting to work, running personal errands or going on a trip with your family. Premiums are based on the policy you take out; a higher premium will mean a lower coverage.
The states require every driver to carry an auto liability policy. The minimum coverage is liability for injuries or damages to others. Each state has different minimum requirements. Some states require you to have uninsured motorist coverage, which pays the medical expenses of a third party who is injured or killed in a wreck that you cause. Some states require no fault or underinsured motorist coverage. These will pay the medical expenses of the policyholder or any authorized driver if the policyholder is at fault in an accident.
Bodily injury and property damage is covered by property damage coverage. This coverage pays the cost of repairs to vehicles and personal property damaged in an accident. It does not cover the cost of repair to the vehicle or the cost of replacement of items. Liability is the most common type of physical injury and property damage coverage pays the cost of medical expenses and pain and suffering that result from a wreck.
Medical expenses are paid for in the event of a car accident through claims processing. It pays the costs associated with doctor visits, medication, and rehabilitation. It does not pay for lost wages and suffering, funeral expenses, and lost future earnings. It also does not pay for pain and suffering, which is a percentage of the cost of living that can be deducted from wages. Personal injury protection is recommended in any state.
The deductible is the amount you pay out of pocket before the insurance company pays the rest. When you put down a lower deductible, you will have lower premiums. When you put down a higher deductible, the premium is more likely to be high. A higher deductible will make your monthly payments lower. The higher deductible can mean a smaller gap between your payments if you get into an accident. However, it may take you a longer time to recuperate financially from an accident.
Collision coverage reimburses for damage caused by collision between your vehicle and another car. It does not replace the car. Your payments are for the repair or replacement of your vehicle. If the other car is undrivable, the deductible does not pay the cost of replacement.
Bodily Injury liability covers the costs of injuries to others who are injured in a wreck you cause. This can include people who are hit by your vehicle or injured in someone else’s vehicle. It doesn’t pay for damages to the vehicle or costs for their medical bills. When you have this type of policy it may help pay for legal costs if you are found at fault for causing an accident. You can also help pay for rental vehicles and vehicle replacement costs if you are at fault for another vehicle accident.