Understanding The Different Types Of Car Insurance Coverage

Car insurance is coverage for vehicles, most commonly automobiles, vans, trucks, and motorcycles. Its main function is to give financial protection against damage or injury resulting from accidents in a car and from liability which may also arise from other events in a car. Car insurance can be purchased either from an agent of an insurer or by getting a policy online. Some people prefer to purchase insurance policies online as this helps them to compare various types of policies and rates offered by different companies easily and quickly. Some of the major items covered in automobile insurance are the following:


This is the amount of coverage provided by the policy

Liability coverage is one of the most basic policies, a person must buy when it comes to buying car insurance. Under this coverage, the insured pays the cost of repairing or replacing his/her vehicle if it is damaged or stolen. In most states, the limit of liability coverage is set at the least amount of the state’s minimum coverage requirements. A person can raise the limit of liability provided to him/her, but this will have to be done through the intervention of an insurance agent. The minimum coverage provided is the most that should be bought by anyone buying car insurance.


This is the sum of money that is paid by the owner of the car to the policy owner in the event of an accident

This should be the minimum amount required by law to pay for medical bills of the driver and passengers in case of an accident, with no additional payment made to the policy owner. The payment to the policy owner will be made only if the car insurance has been purchased.


This is one of the most expensive policies one can buy when it comes to buying car insurance

This is the sum of money that is paid by the insured against any damages caused to other persons’ property or those of third parties in an accident. This policy differs from the common types of coverage in that the underinsured motorist coverage does not pay the cost for the damages done to the vehicle of an uninsured driver. The damages caused to the other person’s vehicle will be covered by the medical payments as determined by the underinsured motorist policy. It is important to note that the underinsured motorist coverage only applies to accidents in which the insured is the at-fault party.


This is the most commonly applied type of coverage by car insurance companies

It covers the cost of any legal fees that are incurred during an accident that was caused by the insured. Bodily injury liability is most commonly applied to the payments made to passengers who sustain injuries in a car accident. People who suffer death or serious bodily injury in car accidents will have this type of coverage applied to them by their car insurance provider.


the deductible that is applied before coverage is paid

Property damage per accident refers to the total amount of expenses to repair or replacement of the vehicle and its contents following an accident. These are all examples of Bodily Injury Liability. Bodily injury liabilities can vary depending on the state you live in. In some states, the limits of bodily injury liability may also be subject to the deductible that is applied before coverage is paid.


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