Insurance, by definition, is a contract between you and the insurance company. The contract stipulates that as long as you pay the premium, the insurance company agrees to pay for your covered losses if you experience an accident, theft or vandalism, or your car is damaged by certain causes. The amount you receive in compensation is based on several factors, including your deductible and the limit you choose for your policy. There are several categories of auto insurance , each of which covers a different aspect of your risk as a driver. Here is a brief overview of these types of coverage:.
Frequently required coverage Many states require that you carry the following coverage: Medical Payments or Personal Injury Protection PIP — Provides reimbursement for medical expenses for injuries to you or your passengers. It will also cover lost wages and other related expenses.
Uninsured Motorist Coverage — Reimburses you when an accident is caused by an uninsured motorist—or in the case of a hit-and-run.
You can also purchase under insured motorist coveragewhich will cover costs when another driver lacks adequate coverage to pay the costs of a serious accident.
Auto insurance basics 101
Optional coverage While basic, legally mandated auto insurance covers the cost of damages to other vehicles that you cause while driving, it does not cover damage to your own car.
To cover this, you need to purchase the following optional auto insurance coverages: Collision — This optional coverage reimburses you for damage to your car that occurs as a result of a collision with another vehicle or other object—e.
While collision coverage will not reimburse you for mechanical failure or normal wear-and-tear on your car, it will cover damage from potholes or from rolling your car.
Comprehensive — This provides coverage against theft and damage caused by an incident other than a collision, such as fire, flood, vandalism, hail, falling rocks or trees and other hazards—even getting hit by an asteroid! Glass Coverage — Windshield damage is common, and some auto policies include no-deductible glass coverage, which also includes side windows, rear windows and glass sunroofs.Property & Liability Coverage: Two Types of Insurance Coverage
An insurance company may check your driving record when you are looking for a new policy, renewing your existing policy or modifying the policy by adding a new driver or additional vehicle. You may also wonder whether your driving record can prevent you from getting insurance.
Your driving record check typically will not prevent you from getting coverage, but it does help the company determine the risk they will take when issuing a policy to you. If you have a record that includes tickets, accidents or points on your license, these factors indicate to the insurance company that there is a higher risk of paying a claim.
In order to compensate for that, the company may charge a higher premium than someone with a clean driving record. When you make an insurance claim or begin the process to switch insurance companies, information about your claims history is placed into a national loss-underwriting database. That information can be accessed by all insurance companies that are considering insuring you. However, insurance companies do not share your personal information directly with each other.
Car Insurance - A guide to buying car insurance, how car insurance Understanding car insurance can be a daunting challenge, but there are basics that. Get all your frequently asked questions about auto insurance answered. Use the nations largest resource of independent agents to get accurate advise. Car Insurance Basics For Dummies: Comprehensive To Collision. Posted by .. That includes comprehensive and collision at $20 and a $ respectively.
The information included on the claims database is not shared, per se, but it is available for all companies to find. This is a common question. If you make sure you have your own vehicle covered, do you need to get the special coverage offered at the rental counter if you go on vacation and get a rental car?
You will have to double-check your particular policy, but most policies do provide the same coverage for a rental car that you have for your personal vehicle, unless the rental is being used for business purposes.
If you are seeking a new policy, an independent agent in the Trusted Choice network can help you find one that does cover rentals. If your car is stolen, a number of things need to happen for you to be compensated for your loss.
First, you will need to file a police report and wait while there is an attempt at recovery. If your car is not recovered, you can file a claim with your insurance company if you have comprehensive coverage. Because of the risk insurance companies face with fraudulent claims, you will need to complete some paperwork to file your claim. But providing you have documentation for the stolen vehicle, your insurance will compensate you for the value of the vehicle up to the limit of your comprehensive coverage.
The basic personal auto insurance mandated by most U.S. states provides some financial protection if you or another driver using your car causes an accident.
If you need to get from home to work while your license is suspended, you are not out of luck. What Is Auto Insurance?
Our Guide to Car Insurance
What Does Auto Insurance Cover? How Does Car Insurance Work? Why Is Auto Insurance Important?
Insurance – The Basics of Auto Insurance Coverage. Below is a brief description of general policy language, it's meaning and an explanation of the. Learn the basics of a car insurance policy. We explain each part to make it easier for you to figure out what yours means. Welcome to Car Insurance , your primer and guidebook for We'll begin with an overview of the industry's basics; Then explain how to think like an insurer.
Is Auto Insurance Required? When you are ready to select your insurance provider, besides just looking for the best car insurance premium, you will want to take some time to research what insurance company you want to go with by learning about their financial strength.
Another important aspect of choosing your insurance provider is knowing if and how they will use your credit score to determine your rate. Take the time to research different companies and then make a list of the providers you are interested in contacting for an insurance quote. When you have your list of selected car insurance providers you are ready to start calling around to search for the one who can give you the best deal.
If you want to get the best coverage for your dollar, shopping smart for your car insurance is the way to do it. Here's an easy car insurance A car insurance guide to help you choose insurance that keeps your finances safe. There are infinite combinations of items that make up a. Auto insurance is a contract between the policyholder and the insurance company. Auto insurance provides property, liability and medical coverage: Liability coverage pays for the policyholder’s legal responsibility to others for bodily injury or property damage.
It is important to have certain paperwork handy, such as your driver's license number. In addition, having a list of discounts you may be entitled to can save you some extra money. Car Insurance Savings Checklist.
Now that you have your car insurance policy, do you understand what it means?
Car Insurance Basics For Dummies: Comprehensive To Collision
Did you get what you paid for? It is important to know how your car insurance policy works and how it can work for you. Here is some help in understanding your policy:.