Insurance is regarded as a lifesaver in times of difficulty and sudden calamities. Unfortunately, many people still overlook this concept, which is why they run into big troubles when something unforeseen happens. In this article, I will guide you through auto insurance in detail. Everyone does have it, but not many people understand it. You surely would have car insurance for your vehicle, right? In most American states, car insurance is mandatory, which is why not anyone can escape it.
Car insurance is bought by most people, but they never know what it is and what it covers. To give a simple idea, I will explain everything here, considering you as a beginner.
Why do people buy auto insurance?
First of all, as per the law, it is mandatory to buy car insurance, so people do. Car insurance is supposed to protect the driver, but it will even pay when a car has been stolen, destroyed by fire or even has crashed. A simple example is that if you are accidentally run down a poor man walking on the street, your car insurance will pay for the medical expenses of the hospital. This is because the older man can sue you, and thus, car insurance jumps in between to help you financially.
If you still have doubts about the example then you must put yourself in the shoes of the older man and think what you would have gone through had it been you who got hit by the car.
The basics of auto insurance:
There are six fundamental aspects of auto insurance. I will explain every one of them precisely for your benefit:
1. Liability Coverage:
This is the first part of the car insurance policy that covers the damage done by you as a driver to someone else. In simple words, liability coverage covers property and vehicle damage. This is a mandatory provision of auto insurance policies.
2. Property Damage Liability:
In this provision, the other person’s property damage is covered that you have done. The priority is a person’s vehicle, but it also covers real estate and landscaping. This provision is not mandatory for most of the states.
3. Bodily Injury Liability
If you have caused physical damage to the other person or even killed them, this provision will pay for the medical expenses and suffice for the person’s death in monetary forms. That’s not all; this provision also covers loss of income, emotional damage, and others. You will be surprised to know that bodily injury doesn’t cover your own medical expenses.
4. Uninsured coverage and under-insured coverage
This provision will protect you in case your car gets damaged by somebody who is either driving with no insurance policy or is under-insured.
5. Collision Insurance
This provision covers the costs of accident damage and thus has been termed as “collision.” It will protect you in case someone has hit you or suffered physical damage due to your fault.
6. Comprehensive Insurance
This coverage is provided in times of incidents and not collisions. It covers the damages of your car and other vehicles which you might have been driving.
How much auto insurance coverage do you need?
This answer is different for every state. You need to check the minimum auto insurance coverage requirements in your state to know about this. For example, in New York, the minimum auto insurance coverage is $30,000 for bodily injury. There is a number that is allotted to each of the customers. Many people choose to carry the state-required amount only.
I hope that you would have understood the basics of auto insurance by now. There are many types within this category. Have you ever heard of non owner car insurance? It is a new-age idea that provides auto insurance at an affordable cost.
it is crucial to be insured in a day and age when everyone is out on the streets with their vehicle. Paying for insurance does seem a bit chaotic, but you will be very thankful for it in times of difficult and sudden issues.