This article is written for the purpose of educating you on auto insurance, and getting you to know about how auto insurance works, for you to be able to decide on which type of automobile insurance is suitable for you.
If we're to be truthful, there's literally no one on Earth who would want for his vehicle to get damaged or lost.
But then we aren't supernatural beings that can always protect our vehicles from damages or thieves. With this being said, the best action to take when one purchases an automobile is to get it covered with insurance, because there's absolutely no way one can use and maintain a vehicle for a long period without it being damaged, to say the least.
So, in the course of you trying to get insurance for your automobiles, it's a wise decision to want to get enough knowledge about that type of insurance. And that's why I'm here! So, follow through.
I'll be talking about areas under auto insurance, like;
• What is Auto Insurance?
• The Types Of Auto Insurance
• Who Is Covered By My Auto Insurance?
• Is It Mandatory To Get Auto Insurance?
Let's get it.
WHAT IS AUTO INSURANCE?
Auto insurance, which is also known as Vehicle insurance, Car insurance or motor Insurance is, according to the few names, an insurance policy for vehicles. Its basic aim is to provide protection financially against physical damage or bodily injury which resulted from the collision with another property. It also gives financial protection against liability that most likely will also arise from incidents in a vehicle.
Financial protection against theft of the vehicle, and against damages caused by other natural occurrences like weather or natural disasters, and the damages caused by hitting stationary objects like an electric pole are also provided by auto insurance.
Although this type of insurance is available in almost all countries in the world, the specific terms of vehicle insurance vary with legal regulations in each particular region.
TYPES OF AUTO INSURANCE
According to multiple researches, there are many types of vehicle insurance, but there are mainly 5 types.
They are;
• Auto liability Coverage
• Comprehensive Coverage
• Collision Coverage
• Uninsured And Underinsured Motorist Coverage
• Medical Payments Or Personal Injury Protection (PIP)
I'll be discussing a few.
Auto liability coverage
Liability coverage provides protection for you if you happen to cause damage to other people and/or their property.
This plan is very helpful in the case of providing coverage for another person's medical bills or expenses incurred when repairing their vehicle and property damaged from the accident that you caused.
Most countries have states that have legal minimums to how much liability coverage a person must have. However, it's advisable to get more coverage than the one required, especially to escape the sorrow of having to spend much more money from your pockets, in the case of a future accident.
Comprehensive Coverage
This type of auto insurance coverage is put in place to protect the insured's car from things other than collision or liability.
It protects the insured's car from vandalism, theft, severe weather conditions, fire and other related occurrences.
To be factual, comprehensive coverage is sold to an individual alongside collision coverage. They both work together excellently, but are also not bad on their own.
Collision Coverage
This type of auto insurance coverage provides for your car in the event of you hitting another car, person or immobile object.
This coverage basically helps in covering costs of repairing your vehicle without fault. It does NOT cover if you hit an animal, or if your car breaks down.
It only covers the cost of repairing your vehicle parts that was damaged due to an accident.
• Personal Injury Protection Or Medical Payments (PIP)
This type of auto insurance coverage helps in providing reimbursement for medical expenses incurred due to the treatment of you or your passengers' injury. It also will cover lost wages in the case of any, and any other related expenses.
Uninsured And Underinsured Motorist Coverage
The Uninsured motorist coverage provides reimbursement when an accident in question was caused by a hit-and-run or a driver that doesn't have auto insurance.
Meanwhile, Underinsured motorist coverage covers the cost in the case where the driver lacks enough coverage to pay the costs when it is a serious accident.
WHO IS COVERED BY MY AUTO INSURANCE?
The auto insurance will cover both you and your family members driving your car - included in the policy.
But you know what's fascinating? It also covers you and your family members when driving someone else's car! (As long as it's with their permission).
The policy also provides coverage in the case of someone else driving your car with your consent.
However, there's something important to note.
Personal auto insurance policies will only cover personal driving. Such as going to work, taking a trip, or running an errand.
If you use your car for commercial purposes - like delivering goods, you're not covered I'm afraid.
The policy will also not cover for damages if a car is used for transporting others through Uber, which is a ride-sharing service.
IS IT MANDATORY TO GET AUTO INSURANCE?
Well, Auto insurance requirements vary from country to country, as well as state to state.
In the event of you financing a car, your lender is also likely to have it's own conditions.
Almost every state in U.S demands that car owners carry Property Damage Liability and Bodily Injury Liability.
Many states also require that you carry Medical Payments Or Personal Injury Protection and Uninsured and Underinsured Motorist Coverage.
It's one of the most wise choices to get your vehicle insured, as it will definitely save you much money in the case of your vehicle being damaged.
Like I said, some of these plans are mandatory in some states, while some are not.
So if Personal Injury Protection and Uninsured motorist coverage are not mandatory in your area, it is advisable to add them to your policy for a wider and more beneficial financial protection.
