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Auto Insurance Explained in Simple Terms
Auto insurance, is insurance that you purchase for your cars,trucks, motorcycles and boats etc. It provides you withprotection from losses that may incur as a result of a caraccident. While this may sound simple enough to understand thereare many types of auto insurance policies available to you andit can be rather confusing. Your coverage level and types willvary depending on the policy that you choose. In general, theseare the most common types of auto insurance programs availableto you: The Different Auto Insurance Coverage Available Collision Coverage: insures your vehicle against repairs if thevehicle is in an accident or the cost of purchasing a newvehicle if yours is damaged beyond repair. Comprehensive Coverage: insures your vehicles against the costof purchasing a new vehicle should yours be stolen or destroyedin a fire.The Different Auto Insurance Coverage Protection Personal Injury Protection (PIP) - insures against medicalexpenses and lost wages related to ownership or maintenance of avehicle. This insurance is mandatory in most states, but not allso be sure to research your state requirements prior. Medical Payments (MP) - insures against medical expenses forbodily injury sustained in an accident that is beyond any of theexpenses that are covered by personal injury protection (PIP). Legal liability claims against the owner or driver of thevehicle causing damage or injury to a third party involved in anaccident. Liability Insurance only covers legal liability. Comprehensive Insurance covers PIP, MP and legal Liability. Inthe U.S. liability insurance covers claims against thepolicyholder and also that of any other operator of theinsured's vehicle. If any other operators reside at the sameaddress, they must be additionally covered on the auto insurancepolicy. Comprehensive Insurance covers most details of damage which canaffect the car, the driver, there is risk associated with buyinga new car that is not covered even by comprehensive insurance.Basically, once the car is bought, there is a decline in thecars total value. During this period the remaining car paymentsexceed the value of the vehicle, thus making the compensationthe insurer will pay for a totaled (destroyed) vehicle. To helpwith this scenario the insurer can purchase GAP insurance. GAPinsurance will cover these costs. GAP insurance was establishedto provide protection to consumers based on the buying andmarket trends. As you can see there are many different auto insuranceconsiderations when picking a new insurance policy. Be sure youunderstand them all in detail and that you have the bestcoverage for you, your car and your family should you need it ifyou get into an accident. Also keep in mind that these aregeneral guidelines and the laws may vary within your state soask questions!
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