Auto insurance is insurance coverage for automobiles, motorcycles, trucks, and many other road-related vehicles. The primary function of auto insurance is to provide protection against personal injury or physical damage resulting from road accidents and from liability which can also arise from malicious acts in a moving vehicle. In some states, auto insurance must be purchased separately from the driver’s license and registration. In most states auto insurance is a component of comprehensive coverage.
Liability is the most important element of auto insurance. Liability insurance protects a policy holder’s financial losses due to injury or property damage that has been inflicted on another person or their property. The law assumes that each party is at fault in an accident, and the law provides compensation to the injured party based on the extent of the injury or property damage. This means that the insurance company will cover the expenses and medical bills of those at fault. However, the amount provided is usually limited by the state’s maximum limits on liability. The maximum amounts for both parties are usually determined by the state’s laws, which usually vary depending on the state’s law.
The automobile glass coverage provides coverage for damages incurred by an automobile in an accident. Generally, vehicles come with factory-installed auto glass that is tempered to prevent cracking. However, after a collision occurs, the windshield may crack or shatter, particularly in higher speeds or on a rainy day. Automobile glass coverage provides financial coverage to repair any windshield damage.
Personal auto policy coverage, often called an uninsured motorist policy, is designed to protect the policy holder’s passengers in the event that they are in an accident with an uninsured driver. Underinsured motorist coverage provides financial coverage for the policyholder and any passengers who are not covered by the auto policy. This type of coverage does not apply to other drivers, so it is not required. An underinsured motorist policy also does not provide coverage for rental cars, so the personal auto policy must be purchased separately.
Another type of coverage is collision. Collision covers repairs or replacement of the other driver’s car. The auto insurance pays the cost of repairing a vehicle that has been damaged or stolen by the insured. In most states, the underinsured or uninsured motorist coverage applies to the other driver, while the collision portion only applies to the insured. It is possible to purchase additional coverage, such as towing and roadside assistance, to supplement collision coverage.
Personal injury protection (PIP) is a special type of bodily injury insurance that covers medical costs for other drivers who are hit by an insured vehicle. When a person is hit by an automobile, the medical costs can be extremely high. Typically, the person who has been hit must obtain their own medical treatment, which can be incredibly costly. The PIP pays all of these costs, which can help to make medical bills more affordable.
Finally, another form of coverage is personal auto insurance liability. This coverage can be very useful if the insured vehicle has been in an accident that was his fault. Liability covers damage to another vehicle or person. In many states, this coverage also requires that the insured pay the deductible. The deductible is the amount that an insured driver must pay up front before the insurance company will start paying off on any claim. If the insured vehicle has no damage, but a claim is still made against it, then liability coverage kicks in.
An auto insurer will ask to see proof of auto liability when you apply for car insurance. Some forms of coverage that the lender may ask for are bodily injury liability, property damage liability, collision, and personal auto insurance liability. Each of these policies can help to protect you from financial responsibility should another driver cause a wreck with your vehicle. You can usually get a free auto quote by filling out a simple questionnaire on your application. The insurer will give you a policy at this point, but it’s always wise to shop around and get a few competing quotes first. You may find that you’re spending more per month on auto insurance than you’d planned on.