| Preparing For Your Car Insurance Policy: Knowing The Different Types Of Coverage |
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| Written by Anna Abola |
| Thursday, 23 September 2010 14:03 |
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Car insurance begins with your policy. You don't need to be afraid of it, but you should take it seriously. Simply put, the car insurance policy is the agreement between you and your insurance company; a contract that determines the coverage you'll receive when certain events occur and the corresponding premium that is required from you.
Car insurance begins with your policy. You don't need to be afraid of it, but you should take it seriously. Simply put, the car insurance policy is the agreement between you and your insurance company; a contract that determines the coverage you'll receive when certain events occur and the corresponding premium that is required from you. The responsible thing to do is to learn about the various types of coverage offered so that you can make the correct decision when choosing an auto insurance policy. Note that individual states have requirements for minimum insurance coverage so you can tailor your policy to fit both your needs and what is mandated by state law. Liability 47 states in the country have liability coverage as their state minimum for a citizen's car insurance policy. Expenses that happen due to accidents such as medical expenses, lost wages, and the costs of damaged property along with defense and court cases are a major part but do not encompass liability coverage completely. PIP (Personal Injury Protection) Personal injury protection or PIP covers your lost wages and medical expenses if you were involved in an automotive accident, even if culpability for the accident is determined. Because it is so vital, it is also a requirement in many states. Medical Payment Coverage Just like personal injury protection, medical payments coverage handles the medical expenses of the owner of the insured car along with anyone else riding in the car when the accident occurred. But as its name suggests, it only covers medical expenses and can very well be coverage that you already have. Collision In the event that you are involved in a collision, with another vehicle or object, collision coverage will handle the costs of the damages to your own car. Though it is widely accepted that collision coverage is enough, it is recommended to secure more coverage than what you perceive you need. Comprehensive Now the unfortunate incidents that may happen to your car are not limited to collisions, so comprehensive coverage handles the loss or damages incurred outside of a collision. These include but are not limited to damages due to fire, hail, flood, theft or vandalism. Underinsured/Uninsured Motorist As an auto insurance policy can differ from person to person, it happens that the coverage between parties differ. One of the car may be uninsured or underinsured. To make sure that this doesn't put anyone at a disadvantage, this coverage caps off the difference of the insurance policies between parties. Now that you've been given a quick overview of the kinds of coverage available, count in your own risk factors along with the active state laws to guide you in making that decision about your auto insurance policy. What are you thinking? What levels of coverage would suit you the best? Join the conversation in the comments section below. DISCLAIMER: This article is provided as information only and is not to be taken as financial advice. |