Are you a first-time auto insurance buyer? Are you uncertain about the details of your current coverage? If yes is the answer to either question, then this introduction to auto or car insurance is a good place to get some answers.
What is Auto Insurance?
Car insurance offers financial protection in the event you’re in an accident. It covers your passengers and your car, as well. In order to get and keep coverage, you pay a premium, which is usually a per-month, biannual or annual payment. The amount of your premium depends on different factors, including your driving record, age, gender, type of car and where you live and drive.
Who is Auto Insurance For?
Automobile insurance is for people who own and drive cars. It is a requirement in all U.S. states. States differ in the amount of coverage required. Your insurance agent will explain how much insurance you need for your state. Insurance is also a necessity when a vehicle is collateral on a loan, even if the owner does not drive the car.
How Car Insurance Works
You pay a premium, and in exchange you receive different types of auto insurance coverage. Your deductible affects your premium. The deductible is the amount you pay for a claim before insurance takes over. A high deductible equals a low premium. Some people don’t like the idea of paying a high deductible, so they prefer to pay more for the premium.
Different Types of Auto Insurance
Collision is financial coverage for when your car hits another vehicle.
Comprehensive does not provide financial coverage for collision. But it does provide coverage for damages caused by things such as storms, hail, deer, and debris.
Bodily injury coverage is for medical bills or loss of wages a passenger may suffer as a result of being a passenger in your car during the accident.
Property damage is financial coverage for any property you hit while driving.
Uninsured (underinsured motorist) coverage is financial coverage for you if you’re hit by someone who does not have insurance or is underinsured.
There are several benefits of having auto insurance. Most notable is it pays for medical expenses, vehicle loss and possible lawsuits resulting from an accident you cause.