5 Things You Need to Know About Car Insurance

Car insurance is insurance specifically for automobiles, trucks, motorcycles, or any other road-going vehicles. Its main function is to give protection against personal injury or physical damage resulting from road accidents and from liability which can also arise out of accidents in a car. For all these reasons, the law specifically requires that a minimum amount of vehicle insurance should be obtained by all motorists. This requirement has prompted many people to obtain auto insurance policies.

Car Insurance

Auto insurance, unlike many other types of insurance, is not a mandatory “requisite” for anyone to have. Insurers may refuse to insure individuals if they do not meet their particular requirements. Many persons who do not have insurance for their motor vehicle do not realize that they may be in danger of being financially burdened should they get into an accident. As such, these persons should know about the various types of auto insurance available to them in order to avoid problems when they need it most.

The first type of policy is liability insurance, which covers the costs of damage or injury to another party due to the negligence of the driver of the motor vehicle. Liability insurance is required by law in almost all states. The types of liability coverage that are offered vary from state to state, but all types typically cover the property damage done by the other party as well as any medical payments made to the injured party. Some policies will also cover the cost of any lost wages to the driver of the automobile that was the subject of the accident.

Collision coverage is the second type of insurance that most people know about. Collision coverage usually pays for repairs or replacement of the vehicle involved in the collision, as well as any medical expenses that may result from the accident. It is also sometimes included in Comprehensive coverage, which means that additional protection is offered against things like fire, theft, vandalism, and weather-related events. Comprehensive coverage typically pays for damage to the whole property of the at-fault driver, even if the vehicle is not totaled. This can be very important, especially in the case of a vehicle that is totaled after an accident.

Personal Injury protection or PIP is a third type of insurance that some motorists are offered. PIP usually pays for medical bills and other expenses related to an accident up to a maximum limit established by the insurer. These limits are typically determined by the state you live in, and there are some limits that may apply to out-of-state residents, according to your insurer. Many insurers will not cover the costs of these out-of-state charges.

One of the most important elements of an insurance policy is the amount of the deductible. A high deductible will mean a lower rate on premiums overall. The deductible can be paid in monthly payments or in one lump sum payment at the time of the accident. Most insurance companies require a deductible in order to write a policy, so make sure you understand the terms of the policy before choosing one. If you do decide to increase your deductible, ask your insurer about the options available to you and consider increasing your deductible to pay for a comprehensive plan that would have higher premiums.