If you’re a new driver or just want to change your car’s insurance policy, it’s always good to have a clear view of how a car insurance works. After going through the basics, we’ll move on to showing what types of car insurance you can buy so you can decide what works best for you.
What Exactly Is a Car Insurance?
In simple terms, a car insurance is a contract agreed between you and an insurance provider in relation to the costs covered in the event of an accident. In case of events which are covered by your insurance policy, you’re protected against significant financial losses. The insurance company will cover costs ranging from repairs, replacements of parts and even medical bills, depending on what coverage options you’ve chosen. To benefit from insurance coverage, you must pay a monthly fee called a premium. The value of your insurance premium depends on the events you choose to have covered by your insurance policy. The 5 most common car insurances are Liability Car Insurance, Collision Insurance, Comprehensive Insurance, Personal Injury Protection Insurance, and Emergency Road Service Insurance.
Liability Car Insurance
Liability Car Insurance is usually required by state law and pays for property damages and bodily injuries suffered by others in accidents caused by you. Each state in the US that requires drivers to have liability car insurance sets different minimum coverage limits. However, the common minimum levels include $15,000 for bodily injury per person, $25,000 for total bodily injury, and $10,000 for property damage.
Collision Insurance Coverage
Collision Insurance Coverage helps pay for damages to your car in case you hit another vehicle or fixed object. This type of coverage is optional but if you own a luxury car, then it’s definitely worth having.
Comprehensive coverage helps cover losses to your car in case of events other than traffic accidents. This type of insurance covers damages incurred as a result of theft, vandalism, hail, fire etc. Just like collision insurance, it’s not mandatory to have this sort of coverage included in your policy.
Personal Injury Protection
Personal Injury Protection helps pay for your own medical expenses in case of an accident no matter who is at fault for the accident. Coverage details are determined by the policy and your state of residency, but, usually, the insurance covers your medical expenses, any lost salaries due to the injuries you suffered, and funeral expenses. A few states in the US allow for this type of insurance to cover your own medical expenses in case you’re hurt in an accident while being a passenger in someone’s car.
Emergency Road Service Coverage
Emergency Road Service Coverage is useful because things can go wrong with your car when you’re on the road. You could get a flat tire or your car’s battery could just run out. This type of coverage will pay to get your car towed to a repair center, however, it won’t cover expensive repair costs.
When you’re deciding to get your car insurance policy, it’s essential that you understand what each type of insurance does and how you can benefit from it.
An insurance consultant can help you get the right car insurance, offering you the best combination for your budget. If you don’t currently have a car insurance, it’s critical that you go and get one now. It will save you a lot of hassle in the future.
Get a car insurance by contacting your local agency.