Car insurance or auto insurance is insurance against losses incurred due to thefts or accidents. If you are a car driver you need car insurance. In most of the states, having car insurance is mandatory by law but even if it is not so it is always best to get car insurance to protect oneself against the high costs of accidents. If you live in a state that requires car insurance, then you need to buy the minimum amount of coverage specified by law.
You can buy a car insurance policy based on the type of coverage you require. There are different types of car insurance coverage but primarily it can be grouped under three broad categories of liability coverage, physical damage coverage and uninsured motorist coverage.
Liability coverage pays for bodily injuries or death, and property damages caused to others by accidents. It is the primary part of most car insurance policies. Bodily injury coverage includes expenses involving medical bills, loss of income, and pain and suffering. Property damage covers you for damages caused to other people’s cars and property in an accident. The liability coverage also covers litigation costs for lawsuits filed against the insurance holder.
The second type of car insurance coverage is the physical damage coverage, which includes collision and comprehensive coverage. Collision coverage covers damages caused to your car by collision with another vehicle or object. Collision coverage is normally determined by the value of your car. The comprehensive coverage is for losses that are not related to car accidents. Damages caused by unforeseen disasters like floods, fire, earthquakes, theft and vandalism are covered by comprehensive coverage.
Uninsured motorist coverage covers for bodily injuries and property damages caused by uninsured motorists. The insured person’s policy will cover medical expenses sustained in accidents where the other driver is at fault but has no insurance.
Besides these three broad types of car insurance coverage, there are other insurance coverage too that are included in a car insurance policy.
Medical coverage pays for medical expenses for injuries caused to the insured driver and the passengers by car accidents, regardless of fault.
Personal injury protection coverage available in some states pays for medical expenses for the insured driver no matter who is at fault.
Rental reimbursement covers the cost of renting a car if your own car is being repaired as a result of accident or other insured damages.
Insurance policies usually combine various types of coverage. Knowing the laws of your state will help you in determining the minimum car insurance coverage you require. You can also opt for additional coverage based on how much money you can afford to lose in case of an accident.
Stephen Mcbride is the webmaster of a site dedicated to information on low cost car insurance.
