Auto insurance (also called vehicle insurance) is an insurance purchased for cars and other road vehicles. Its sole purpose is to provide protection against physical damage and bodily injury resulting from traffic collisions. It depends on the type of package you buy, generally auto insurance pays to fix your car if you are in an accident, pays the medical costs of anyone injured in accident, and pays to repair other vehicles or property. If you were found liable for causing injury or damage with your vehicle, the company will also cover you with the liability portion of your auto insurance.
According to the Insurance Information Institute, there are six basic types of auto insurance coverage, which are explained as under:
1. Personal Injury Protection Coverage
PIP (Personal Injury Protection) or also called medical payments, covers injuries to yourself and your passengers. Occasionally, the auto insurance company also pays for lost wages and funeral costs in this type of coverage. Thus this is the most attractive benefit of auto insurance that you are in an accident and the company compensates your injury as well as the passengers you injure.
2. Collision Coverage
The second basic type of auto coverage is collision of the car. It covers the damage to your car from hitting another car or any non-live object, or as a result rolling over.
This coverage also covers the damage to your car resulted from underground roads.
3. Bodily Injury Liability Coverage
Another important coverage is bodily injury liability. It covers injuries to other people resulted from your accident. Here the injuries occurred to these people will be checked out and then they will be paid by your insurance company.
4. Property Damage Liability Coverage
Property damage liability is similar to bodily injury liability type in a sense, as it includes damage to the property of the people instead the bodily injury. Your insurance company will pay to the people whose property is damaged in an accident.
5. Underinsured And Uninsured Motorist Coverage
Auto insurance company offer another exciting coverage you have an accident. When you are in an accident and found that the other driver does not have auto insurance or does not have capacity to cover your expenses, then the company will reimburse you.
6. Comprehensive Coverage
The last but not least, is comprehensive coverage. It covers anything other than what is covered under collision coverage. For example, coverage for damage from earthquakes, theft, hailstones, deliberate damages, and so on.
General Rules Of Auto Insurance Companies
Auto insurance companies require you to study their rules before being insured with them. Your auto insurance generally covers you as well as someone driving your car with your permission. Most states require drivers to carry liability insurance. According to an online insurance comparison site, ComparisonMarket.com, liability coverage represents about half of most auto insurance premiums. Some auto lenders also require that owners carry auto insurance, and auto lease companies almost always require anyone who wants to lease a car to carry auto insurance with set levels of minimum coverage.
Many states have no-fault insurance laws, which mean that your auto insurance provider pays for your damages even if another driver is at fault. You can still sue for non-economic damages such as pain and suffering in all of these states.
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