Six Types of Car Insurance Coverage
by Admin
Posted on 21-08-2022 09:35 PM
Car
insurance
is a contract between you and an insurance company in which you agree to pay a set amount, called a premium, in exchange for financial protection in the case of an accident. Your insurance company may bill you monthly, quarterly, biannually or annually. If you get into an accident, your insurance company may pay for all or a portion of your vehicle repair expenses, medical care or other costs resulting from the accident — depending on your coverage. Typically, however, you’ll need to pay a deductible before your auto insurance kicks in.
Many states require that you carry the following coverage : medical payments or personal injury protection (pip) — provides reimbursement for medical expenses for injuries to you or your passengers. It will also cover lost wages and other related expenses. Uninsured motorist coverage — reimburses you when an accident is caused by an uninsured motorist—or in the case of a hit-and-run. You can also purchase under insured motorist coverage, which will cover costs when another driver lacks adequate coverage to pay the costs of a serious accident. Even if these types of coverage are optional in your state, consider adding them to your policy for greater financial protection.
Every state but new hampshire requires you to have both bodily injury liability and property damage liability coverage. (new hampshire drivers do have to meet certain financial responsibility requirements to forgo liability coverage. ) in the remaining states, there are also minimum dollar amounts for the coverage you must carry. Bodily injury liability can have two dollar limits: one per person and another per accident, while there's only one limit for property damage. coverage limits are typically expressed in your insurance policy by a sequence of numbers. So, for example, if your policy has a $25,000 bodily injury liability limit per person, a $50,000 bodily injury liability limit per accident, and a $25,000 property damage liability limit, your policy would express it as 25/50/25.
Auto insurance is a contract between you and the insurance company that protects you against financial loss in the event of an accident or theft. In exchange for your paying a premium, the insurance company agrees to pay your losses as outlined in your policy. Auto insurance provides coverage for: property – such as damage to or theft of your car liability – your legal responsibility to others for bodily injury or property damage medical – the cost of treating injuries, rehabilitation and sometimes lost wages and funeral expenses basic personal auto insurance is mandated by most u. S. States, and laws vary.
Some are optional and some mandatory, depending on where you live
The primary difference between these coverages is that medical coverage is always optional while personal injury insurance is mandatory in some states. In most cases, states will offer one or the other, but not both. Also, depending on the state, the coverage limits can vary greatly between these coverages. While some states will regulate minimum coverages for personal injury insurance, this is never the case for medical insurance.
Depending on where you live, some car insurance can be mandatory while others will be optional. You need to be aware of the laws in your city to help you make an informed decision/ here are the most common types of car insurance, classified as mandatory or optional.
Six Types of Car Insurance Coverage, Explained
Some people don't understand the need for auto insurance, which can leave them personally exposed and cause significant financial problems in the event of an accident. Auto insurance is mandatory in nearly all states, except new hampshire, which still requires financial responsibility. Here is our guide to car insurance explained to help you better understand the important of buying the right coverage.
Your auto insurance policy is an agreement between you and the insurance company. As long as you continue to pay for coverage, the provider will cover the cost of injuries, vehicle repairs, and other types of property damage. When you purchase car insurance, you’ll choose coverage limits that determine the amount of financial protection you receive from your policy. As you increase your policy’s car insurance limits, the money you owe — called your insurance premiums — goes up. You use your insurance when your car is damaged, stolen, or after an accident with another driver. While the source of damage and who was responsible affects how the claims process works and whose insurance pays for damage, generally you make a claim to avoid paying for the costs of an accident yourself.