What is automobile insurance?
Basic personal automobile insurance is mandatory in most countries and provides financial protection in the event of an accident. But is that enough? What are the options? Read how automobile insurance works and what types of coverage are available.
Understanding automobile Insurance: Basics
Auto insurance is a contract between you and an insurance company that protects you from financial loss in the event of an accident or theft. In return for paying the premium, the insurance company agrees to pay your loss as stated in your policy.
Automobile insurance covers:
Property such as automobile damage or theft
Liability-Your legal liability to others for personal injury or property damage. Medical automobile - Injury, rehabilitation, and sometimes lost wages and funeral expenses. Most states in the United States require basic personal automobile insurance, and the laws vary.
Auto insurance coverage is priced individually (a la carte) so you can adjust the coverage to your exact needs and budget. Policies are typically published for 6 months or 1 year and can be updated. The insurance company will send you a notification when it is time to renew your insurance policy and pay the premium.
Who covers my automobile insurance and under what circumstances?
Your automobile policy is your policy for you and your other family members, whether you are driving your automobile or driving with someone else (with your permission) Applies to. If someone who does not have your policy drives your automobile with your permission, your policy will also provide compensation. Your personal automobile policy covers only personal driving, whether you travel, message or travel.
It is not covered when using the automobile for business purposes, such as when delivering pizza. Personal automobile insurance does not cover you if you use your automobile to provide transportation to others through ride-hailing services such as Uber or Lyft.
However, some automobile insurance companies offer (at an additional charge) additional insurance products that extend the coverage of vehicle owners who offer ride-sharing services. Is automobile insurance required? Auto insurance requirements vary from state to state. If you are financing a automobile, your lender may also have its own requirements. In almost all states,
Automobile owners must wear the following:
Responsibility for Physical Injury-Covers the costs associated with injury or death caused by you or another driver while driving your automobile. Property Liability-Compensate others for damages caused by you or another driver driving your automobile into another automobile or property (fences, buildings, utility poles, etc.). In addition, many statements require you to wear:
Medical Expenses or Personal Injury Insurance (PIP) to reimburse medical expenses for injuries to you or your passengers. It also covers lost wages and other related costs.
The uninsured driver cover will cover you in case the uninsured driver causes an accident or hit-and-run. You can also buy the cover with an insured driver.
This covers the cost if another driver does not have enough cover to cover the cost of a serious accident. Even if PIP and uninsured driver compensation is an option in your state, consider adding it to your policy for additional financial protection.
What other types of automobile insurance are common?
The most basic and legally required automobile insurance covers damage to your automobile, but not your own automobile. To cover your automobile, you need to consider the following optional covers.
Collisions compensate for vehicle damage in the event of a failure caused by a collision with another vehicle or another object (for example, a tree or railing).
The collision range does not compensate for mechanical failure or normal wear of the automobile, but it does cover the damage caused by dents and falls of the automobile.
Comprehensive also covers theft and damage caused by non-collision accidents (fire, floods, vandalism, hail, rockfalls and trees, and other dangers) with asteroids.
The glass cover provides a cover against frequent windshield damage. Some automatic policies include a glass cover without subtraction. This includes side windows, rear windows and glass roofs. Alternatively, you can purchase an additional glass cover.
What is Gap Insurance? do you need it?
Collisions and full coverage only cover the market value of your automobile, not what you paid for it, and new automobiles deteriorate rapidly.
If your automobile is stolen or completely stolen, there may be a "gap" between what you rent in your automobile and your insurance coverage.
To cover that, you may consider purchasing gap insurance to pay the difference. Please note that the rental vehicle gap coverage is usually included in the rental payment.