Basics of Car Insurance
At its most basic level, car insurance is a policy that is used to protect you in the event that you cause damage to someone’s property or cause physical injury to someone while operating a vehicle. This policy can be extended to cover events like theft or personal accidents for a higher cost. This sort of insurance policy is a contractual agreement between an auto insurance provider and you in whom you pay a premium for certain coverage that you decide. The premium, which is a payment you make for your coverage, will rise or fall depending on the events that you want to cover. These decisions for the policy provide a statement of what events or damage your insurance policy will cover or not.
The first thing that an insurance policy will cover is injury to another person or damage to their vehicle or property. What this means is you are involved in an accident in which you were at fault. This is called Liability insurance and is required by law for everyone who operates a motor vehicle.
Let’s say that you are involved in an accident in which you were not at fault. By law, everyone who operates a motor vehicle has to have Liability insurance, but not everyone actually has the most basic form of auto insurance. In this case, if you do not have insurance to cover this scenario, then you are just out of luck. There are two ways you can insure that you will be covered in this circumstance of an accident that you did not cause.
Collision and Comprehensive insurance makes sure that in the event of an accident that you are insured whether the other driver has Liability insurance or not. Collision is the first of these two, and this is also where you run into the concept of a deductible. The higher amount you are willing to pay for damages before insurance takes over the costs is called the Deductible. This amount can have an affect on your premium.
Comprehensive insurance covers situations like theft, vandalism, or fire. While this policy covers your entire car getting lifted, or total destruction, it also extends to cover item is your car, like the stereo or your CD collection. It also extends to natural disaster, which are often called “Acts of God,” and road kill situations where you hit an animal while driving, such as local farm’s cow that got loose or a Bambi’s mom.
Uninsured Motorist coverage is for those times when a driver who is at fault and has no insurance injures you. This can cover any medical bills if you are involved in a hit and run or need medical care for injuries sustained in the accident. Not all states have this policy, so check and see if it applicable to where you live.
This car insurance comparison is meant to give you the basic idea of policies, but there are a few extra items you can add to your policy for more bang for your buck. Rental reimbursement covers a rental car if your vehicle is un-drivable do to an accident. You can also get roadside assistance and towing for those times if your car breaks down. Gap coverage covers the difference when you have to buy a new car because yours got totaled.
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