Auto insurance, which covers cars, trucks, and other vehicles, is a type of insurance that people can buy. Its main purpose is to protect against losses caused by car accidents and thefts. It also includes things like losses caused by natural disasters. It is the law that you must have insurance on your car. When you get insurance, you get a "policy" that is based on a number of things, like the kind of car you drive and how often you drive.
Auto insurance, which covers cars, trucks, and other vehicles, is a type of insurance that people can buy. Its main purpose is to protect against losses caused by car accidents and thefts. It also includes things like losses caused by natural disasters. It is the law that you must have insurance on your car. When you get insurance, you get a "policy" that is based on a number of things, like what kind of car you drive and what kind of insurance you want. Policies are actually a package of different types of insurance coverage. They can be grouped into:
- Liability: This coverage pays for injuries to the body and damage to other people's property that happen by accident. Damages for injuries include things like medical bills, pain or suffering, and lost wages. Damage to property includes damage to the car. This insurance also covers the costs of a defence and going to court. State laws tell you how much liability insurance you have to buy, but you can buy more if you want.
Collision insurance pays for damage to your car that was caused by hitting another car or object.
Comprehensive coverage pays for damage or loss to the insured car that doesn't happen in a car accident. Comprehensive insurance can cover damage caused by fire, wind, hail, flood, vandalism, or theft, among other things.
- Underinsured Motorist Pays for the damage to your car when the person who caused the accident doesn't have enough liability insurance to cover all of your claims.
- Medical Coverage: Pays for medical bills, no matter who was at fault, as long as they were caused by an auto accident.
- Uninsured Motorist: Pays for damage to your car when another driver who doesn't have liability insurance causes an accident.
- PIP - Personal Injury Protection (PIP) - This coverage pays for the insured driver's medical bills if they get hurt in an auto accident, no matter who was at fault.
Rental Reimbursement: This kind of insurance will pay for a rental car if an accident damages your rented car. Most of the time, you have to pay a certain amount per day for this coverage when you rent a car.
Some insurance plans include more than one of these kinds of coverage. You have to choose the insurance you want for your car based on the laws in your state. Even if your state doesn't require a lot of insurance, it may be worth it to pay for extra coverage because an auto accident could leave you with a bill for thousands of dollars.
