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Car Insurance Questions And Answers

Saturday, June 18th 2016. | Tips

Car Insurance Questions And Answers

You will get informative car insurance questions and answers when you continue reading.

What Is Car Insurance?

An auto insurance is a legal agreement between the motor vehicle owner and the insurance company wherein the former pays the latter premiums (i.e., cash fees) and, in exchange, the latter pays the former for covered losses in the event of accidents. The covered losses may include property damage, third party liability, and medical expenses with emphasis on the applicability of the terms and conditions stated on the insurance policy.

In the United States, most states require vehicle owners to have auto insurance with the minimum requirements varying by state.

Why Should You Buy Car Insurance?

You are well-advised to secure auto insurance for these reasons:

Your state will most likely require auto insurance as part of the lawful use of your vehicle on public and private roads. Otherwise, you will face penalties including monetary fines that will probably be greater than the insurance premiums.
You will appreciate the protection that auto insurance providers in case of accidents, either involving just yourself or with other motorists and pedestrians. Even a small accident can be financially challenging when its related expenses are paid out of your pocket, much more so when it involves another person and property.
Your prospective lender will require auto insurance as a requirement for your loan. This is because your lender has the assurance that the loan collateral has insurance coverage in case it becomes damaged. Otherwise, your car can be repossessed by the lender.

The bottom line: The premiums paid for your insurance policy will go a long way toward your protection and peace of mind.

What Are The Types of Coverage?

You have several choices in insurance coverage: Liability, which covers injuries sustained by others and damage to their property in case you were the cause of the accident

Medical payments, which pay the medical bills for you and your passengers but only up to a pre-determined limit regardless of who was at fault
Collision coverage which pays for the damage on your car due to the accident
Personal injury protection, which ensures payment of medical bills for you and your passengers even when the accident was not your fault as well as payment for other losses including lost wages and burial expenses
Comprehensive coverage which pays for the damage to your vehicle for non-accident causes or its theft
Uninsured and underinsured motorist, which pays for damages due to an accident caused by an underinsured, uninsured, or hit-and-run driver

Many of the insurance policies also come in two major types, namely, individual and commercial. You can also request for add-ons to a basic insurance policy, such as emergency roadside assistance and the free rental car in case your vehicle is being repaired after an accident or replaced after a theft.

With so many types of coverage, you should not hesitate about engaging in a more detailed car insurance questions and answers discussion with your policy provider. You will be able to choose the best coverage for your needs in this manner.