Auto insurance is an invaluable form of protection against considerable financial loss in the event of an accident involving a car. Consumers pay a monthly, semi-annual or annual premium determined through several factors including age, driving history and credit status. In return, an auto insurance company agrees to pay for losses incurred as outlined in the insurance policy. Coverage typically includes reimbursement for property damage, liability and medical coverage when an injury is present.
Who Requires Insurance Coverage?
This type of insurance is frequently mandatory, and presently required throughout the United States. Drivers must be covered by insurance, meeting the minimum liability standards in order to be in compliance with the law.
Different Types Of Coverage Available:
- There are several types of auto coverage including:
- Liability Insurance
- Collision Insurance
- Comprehensive Insurance Coverage
- Personal Injury Coverage; and
- Insurance Against Uninsured or Under-insured Motorists
Liability coverage essentially covers medical costs and property damage that occurs to another party, by self-fault. Collision insurance covers repairs to the owner’s car, and comprehensive coverage pays out in the event of non-accident related damage such as theft. Personal injury protection kicks in to cover passenger medical bills, regardless of fault. Finally, uninsured or under-insured coverage is useful when the other person’s insurance is inadequate to cover the full expenses of an accident.
Insurance is crucial for a number of reasons and provides a number of benefits. Moreover, insurance can protect consumers against potential bankruptcy, experiencing financial hardship from medical bills, lost time at work and irreparable property damage, and it often includes perks such as roadside assistance, annual rate-guarantees, after-hour customer services and discounts by association depending on the insurance company.
Having insurance in place essentially allows drivers to have greater peace of mind towards a potential accident, regardless of fault. Although unlikely, auto-accidents are possible, and the largest benefit of having car insurance is that financial woes will be the least of anyone's worries in the event of this situation.