Auto insurance is the most utilized insurance that most people will ever
purchase. When you drive you are responsible for the safety of your
passengers, your fellow drivers, other people's property, pedestrians and
yourself. Insurance helps ensure your ability to cover the costs of
potential damages or injuries. It depends on the type of auto insurance
coverage you have as part of your policy as to what it will cover.
In most states liability coverage of property damage and bodily injury are
required. With liability auto insurance you are protecting your assets by
having insurance that will pay for the damages you cause others to their
property or for their bodily injuries. Without the benefit of insurance
covering these claims you would personally be responsible for these
expenses.
Liability insurance does not protect you or your car directly. Bodily injury
(BI) liability insurance covers you if you cause an accident injuring other
people. It protects you against their claims up to the stated amounts for
medical expenses, lost wages, pain and suffering and other losses. It does
not pay for bodily injury you may sustain.
Property damage (PD) liability coverage pays for any damage to the property
of others up to the stated amount provided by the policy (i.e., a crushed
fender, broken glass, or a damaged wall or fence). Your insurance will pay
for this damage if you were driving your auto or if it was being driven by
another person with your consent. Property damage liability also pays if you
damage government property like a light pole or signpost, up to the limit
you choose.
If you add optional coverage such as collision and comprehensive your auto
insurance will protect your investment (your car) and guarantees you a way
of coping with the expense of accidents, vandalism or theft. It also secures
your financial responsibility to the financial institution that lent you
money to buy your vehicle.
Collision coverage covers damage to your vehicle when your vehicle hits, or
is hit by, another vehicle, or other object. This type of physical damage
coverage pays to fix your vehicle, less the deductible you choose at the o
onset of your policy.
Comprehensive coverage covers your vehicle, and sometimes other vehicles you
may be driving, for losses resulting from incidents other than collision.
The incidents listed on a comprehensive policy typically include your
vehicle being stolen, damaged by flood, fire or animals. This type of
coverage also comes with a deductible.
In most states insurance is a prerequisite to registering your car. The
state mandated auto insurance coverage differ depending upon state laws so
before obtaining car insurance you will need to know what your state's
minimum coverage are. If you owe money on your vehicle then additional
coverage of collision and comprehensive are normally required to be placed
on your car by your lien holder.
