The followings are the knowledge needed for people who have cars. In some countries, it is required for all vehicles to have an insurance to cover any possible damage.
What is Auto Insurance?
Automobile insurance is the most common form of insurance and may cover both legal liability claims against the driver and loss or damage to the insured’s vehicle itself incurred as a result of traffic accident.
Who need Auto Insurance?
In many jurisdictions, it is compulsory to have auto insurance before using it on public roads. Most jurisdictions relate insurance to both the car and the driver, however the degree of each varies greatly. Bodily injury compensation for automobile accident victims has been changed to a no-fault system in some jurisdictions, which reduces or eliminates the ability to sue for compensation but provides automatic eligibility for benefits.
Coverage Requirement in U.S. Jurisdiction
The driver may be protected with different coverage types depending on what coverage the insured purchases. Some states require that every driver carry minimum level of auto insurance coverage in order to ensure that its drivers can cover the cost of damages to people or property in the event of an automobile accident.
Liability Coverage
Liability means a fixed dollar amount of coverage for damages that an insured driver becomes legally liable to pay due to an accident or any negligence.
Bodily Injury Liability coverage
The Bodily Injury Liability coverage applies to injuries that you, the designated driver or policy holder, cause to someone else. You and family members listed on the policy are also covered when driving someone else’s car with their permission.
It’s very important to have enough liability insurance, because if you are involved in a serious accident, you may be sued for a large sum of money. You need to consider buying more than the state-required minimum.
Property Damage Liability
This coverage pays for damage you or someone driving the car with your permission may cause to someone else’s property. Usually, this means damage to someone else’s car, but it also includes damage to telephone poles, fences, buildings or other structures your car hit.
The above two coverage are available either as a combined single limit policy, or as a split limit policy.
Single Limit Policy means Bodily injury coverage and Property damage coverage are under the same limit and policy. In this policy, the injury on drivers, passengers and damages on vehicles will be paid under the same insurance policy.
A split limit policy splits the coverage into property damage coverage and bodily injury coverage. Bodily injury liability coverage is also usually split as well into a maximum payment per person and a maximum payment per accident.
Collision Coverage
This coverage pays for damage to your car resulting from a collision with another car, object or as a result of flipping over. If you are at fault for the accident, your collision coverage will reimburse you for the costs of repairing your car, minus the deductible. If you’re not at fault, your insurance company may try to recover the amount they paid you from the other driver’s insurance company. If they are successful, you’ll also be reimbursed for the deductible. Collision coverage is optional.
Comprehensive Coverage
This coverage reimburses you for loss due to theft or damage caused by something other than a collision, such as fire, falling objects, earthquake, windstorm, flood, vandalism, riot, or contact with animals. States do not require that you purchase collision or comprehensive coverage, but if you have a car loan, your lender may insist you carry it until your loan is paid off.
Uninsured/Underinsured Coverage
Underinsured coverage provides coverage if another at-fault party either does not have insurance, or does not have enough insurance. In effect, your insurance company acts as at fault party’s insurance company. In the United States, the definition of an uninsured/underinsured motorist, and corresponding coverage, are set by state laws.
Car Towing Coverage
Car Towing coverage is also known as Roadside Assistance coverage. Long time before, automobile insurance companies have agreed to only pay for the cost of a tow that is related to an accident that is covered under the automobile policy of insurance. This had left a gap in coverage for tows that are related to mechanical breakdowns, flat tires and gas outages. To fill that void, insurance companies started to offer the Car Towing coverage, which pays for non-accident related tows. So check the coverage with your insurance company regarding this issue.
Where can I Get The Quote?
Actually, you can get a quote from online insurance companies. It is simply typing your information and they will send you the quote in no time. However, I never use this service before, so I am not sure what would be the negative or positive things to have an insurance online.
