Car insurance is coverage for automobiles, trucks, motorcycles, and any other road-going vehicles owned by an individual or business. Its main function is to provide monetary protection against personal injury or physical damage resulting from road accidents and from liability which can also arise out of car-related incidents in a private vehicle. It is compulsory in all countries and regions. Getting a valid car insurance policy gives the insured protection from losses arising out of accidents or collisions. It acts like an umbrella that covers the insured and the third parties as well.
There are three types of car insurance policies; namely Comprehensive, Third Party Only, and Uninsured or Underinsured Motorist Coverage. Comprehensive covers the whole vehicle while the Underinsured or Uninsured Motorist Coverage covers only certain parts of the vehicle that are deemed to be the inoperable or dangerous to other drivers. Comprehensive Insurance provides coverage to all damages, including medical expenses and others. Third party coverage on the other hand, provides coverage only for third parties who injure the insured. However, this kind of insurance does not have any effect on the duties and responsibilities of the owners to their drivers.
Collision coverage provides coverage for damages incurred by the insured car while it meets with an accident. This includes payment of medical fees and other expenses for passengers and other persons who are injured in the car. It also includes payment of the repair expenses for car parts that are damaged in an accident. The underinsured or uninsured motorist coverage applies only to motorists who are driving vehicles that are not the insured’s private automobiles. It does not apply to drivers who are driving private autos that are driven by family members, friends, or other individuals who are driving the insured’s vehicle.
The next type of insurance is the uninsured motorist property damage coverage, which basically provides compensation in case the car of the insured is damaged due to the negligence of the driver who is driving the car at the time of the occurrence. Collision policies cover only the car, the driver, and the passengers. Uninsured motorist property damage coverage is meant to reimburse the expenses that are incurred by the insured when his/her car is damaged due to the negligence of the driver who is not under the insurance scheme. This is different from collision policy which provides coverage for both the driver and the vehicle.
Some states require drivers to purchase auto insurance as a condition for getting a license. Some states require drivers to purchase more than just liability car insurance. In fact, many states require drivers to purchase more than just liability car insurance. Generally, state law requires drivers to purchase personal injury protection or PIP. This coverage pays for the costs associated with treating injuries resulting from car accidents.
In addition, some states may require drivers to purchase uninsured motorist property damage coverage. This coverage pays for the medical expenses of the injured person caused by the car accident, if the insured car insurance has no coverage limits. Therefore, it is important to check with your insurance company and determine what coverage limits you need.
