Sunday, May 06, 2012

What Is Automobile Insurance?


You may still be wondering what automobile insurance is, and in response, here is an answer to your query. Automobile insurance or auto insurance safeguards you from certain unfortunate incidents that involve your automobile. It is generally a deal you make with an insurance provider wherein you pay for a premium and in return, when an accident happen the insurance company will pay for the damages you acquired as long as it is covered in the insurance policy you have bought.
What are the automobile insurance terms you need to go and understand? One should understand the words ‘deductible’ and ‘premium’ when buying automobile insurance. The latter is the amount you pay for a certain auto insurance policy while the former is the amount that you are going to pay for damages incurred due to an accident. As an example, the policy you bought has a $100 deductible and the damages in the accident amounts to $500, then, you are going to pay only for the $100 of total $500 damages.
Most cheap car insurance covers costs of repairs, medical coverage to injured people caused by the accident, and the legal policies. A policy also exist that will cover cost when your vehicle is vandalized or stolen.

What are the types of automobile insurance coverage?
Automobile insurance policies include different kinds of coverage and of different prices. Your insurance policy may cover the following.
1) Property Damage Liability. When you caused an accident, this coverage will pay for the repairs to the damages incurred by your car the other party as well. This coverage will also apply to the repair costs of any other property hit by your vehicle in the course of the accident such as street lamps, buildings, etc.
2) Bodily Injury Liability. This insurance coverage will pay for the medical expenses, lost wages, suffering, and funeral expenses for people who have been injured in the accident you are legally responsible for. Aside from those, this coverage also covers legal costs in defending you from lawsuit filed due to the accident.
3) Collision. This pays for the damages incurred to your vehicle as it collides with another automobile whether you are at fault or not. This will reimburse you of the cost in fixing your automobile after you have paid for the deductible amount. Most bank-financed vehicles are required to have this type of coverage though this is optional in most states in US.

4) Comprehensive. This type of coverage will pay for the damages not caused by a vehicle-collision accident such as vandalism, falling objects, fires, storms, earthquakes, animal-caused accidents, and in the event that your vehicle will be stolen. This coverage however is optional.
5) Uninsured/Underinsured Motorist Coverage. This insurance policy covers you and the passengers in your vehicle when the accident is caused by an uninsured motorist who has been held responsible for the injuries incurred. It covers medical bills and other related expenses permitted by a particular coverage.

What is the purpose of automobile insurance?
This type of insurance exist to protect yourself and your vehicle, and to free you from possible financial trouble. It is better to be prepared to respond to any untoward incident pertaining to your vehicle. It is better that your automobile is properly insured for accidents can happen to anyone.

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