If you drive, you need auto insurance. But many drivers still cruise around town uninsured. But why? It’s because they don’t think they’ll end up in an auto accident. However, everyday hundreds of drivers find themselves in auto accidents, and I’m sure it’s safe to say that they weren’t expecting it.
Auto insurance is security. It’s a way to protect your car, yourself, and other drivers while on the road. Auto insurance policy holders pay premiums and in return, the auto insurance company subsidizes expenses involved in an auto accident. It’s a way to protect drivers against costly car repair, hospital, and even legal bills as a result of an auto accident.
But there isn’t just one type of auto insurance available. Drivers have a few options they can choose from when selecting an auto insurance policy. Drivers can choose the level of coverage and liability of their policy. However, more liability and coverage means higher premiums. So how do you decide what policy to get?
What to Select:
When shopping for auto insurance, you first need to establish what type of coverage the state requires you to have and what additional coverage you want. Different states have different auto insurance coverage laws, so be sure to check with the DMV or your auto insurance company about specific state requires. But, in addition to state required levels of coverage, you can always add additional coverage to your policy. Standard coverage options include medical coverage, collision, and comprehensive coverage. Liability coverage options include injury and property damage.
If you want to protect yourself from paying high medical fees for someone you injured in a car accident, include injury liability to your policy. With most policies, you can even state the level of liability coverage, dictating how much your insurance company will cover and what your premiums will be.
What Not to Select:
Some people see auto insurance as a burden. They think they’re perfect drivers and will never get in an auto accident. And if they do, it won’t be their fault and the driver at fault will pay for any necessary repairs and medical expenses. So, they opt for the most inexpensive or basic coverage possible.
If you’re one of these “perfect drivers” who thinks this way, you’re not looking at the entire picture. What if you’re rear ended and injured by an uninsured driver who flees the scene and is never found? Now you’re stuck with medical and car repair expenses. If you had a policy that covered you in such an event, you wouldn’t be stuck with the entire bulk of the bills. Basic auto insurance only provides basic coverage; and the term “basic coverage” means different things to different insurance companies. If you’re shopping for auto insurance, don’t just ask for the most inexpensive and basic policy. Think about what you need to keep yourself safe on the road in any situation. You never know what will happen when you’re on the road.
Auto insurance is a basic necessity of life. If you want to keep yourself safe while on the road, you need to have proper auto insurance and a policy with the coverage and liability you need to protect yourself and your passengers in any situation.
For more articles on Auto Insurance, visit: http://www.bills.com/auto-insurance-coverage-explained-article/
About the Author:
Justin has 5 years of experience as a financial adviser; his key areas are loan consolidation, debt relief, mortgages etc. For more free articles and advice visit http://www.Bills.com.
Article Source: ArticlesBase.com – Your Auto Insurance Coverage Explained
Filed under auto insurance price quote by on Aug 8th, 2009. Comment. 
Legally, every car owner in United States must be covered under some type of auto insurance as stated by the Department of Motor Vehicles or DMV. This protects the owner of the car against damage to himself or his car, as well as protects other people from damages he may inadvertently cause.
Auto Insurance Coverage includes several definitions. These definitions determine the responsibilities and obligations of the policy holder, as a car owner, in case of damage to one’s car, the theft of his car, or an involvement in a car accident.
Definitions:
Property Coverage: this term generally covers the damage made to a policy holder’s car by whatever means, and also includes the theft of his car. Clearly this is a necessity when it comes to insuring one’s car, and every car owner should be insured against property damage.
Liability Coverage: this term involves one’s legal responsibility for bodily injuries and for property damage caused by him. This assures the policy holder that whatever happens, the insurance company will protect him – to some extent – from bodily or property damages he has caused.
Medical Coverage: this term applies to the amount of money paid for the hospitalization and treatment of injuries incurred during an accident, as well as the costs of rehabilitation, and wages lost by the injured person during this time of incapacitation.
Standard policies:
There is a great variety of auto insurance policies which exist for the purpose of indemnifying the car owner in case of loss, injury or damage. These also can be classified into several types.
Third Party: this is the most basic insurance policy available and protects a policy holder in the event he accidentally damages someone or their property. It is also the cheapest car insurance available.
Fire and Theft: this type of policy offers more protection to the policy holder, and will cover the cost of a car that is burnt or is stolen. Note that it does not cover any damages incurred if involved in a car accident.
Collision: this type of policy covers the cost of repairs to a car when the policy holder is liable for the accident. Basically, if you cause the accident, you still get paid for repairs if covered by this type of insurance.
Personal Injury Protection (PIP) or Medical Payments (MedPay): this type of policy reimburses medical bills of the driver and his passenger regardless of who’s at fault for causing the accident. It also protects against lost wages while the injured person cannot work.
Comprehensive: this type of insurance offers the most protection to the policy holder, and covers everything from accidents, to auto theft, to fire damage, to “act of god” (vandalism, hurricane, flood). It can even cover the cost, at least partially, of medical expenses suffered during an accident and of items stolen from a car. Unsurprisingly, this is also the most expensive car insurance.
Specialized policies:
There are also specialized policies that suitable to some scenarios.
Classic car insurance: covers a car that is older than 25 years. In principle it is equivalent to a standard comprehensive car insurance, however, it may have a limitation on the number of miles the owner can drive per year.
Rental Reimbursement: this type of policy simply insures a policy holder in case his car is unavailable – he is given a replacement rental car for this period.
Regardless of the policy a car owner has, it is important for him to be familiar with his policy. Some auto insurance providers do not reimburse 100% of the value of a stolen or damaged car, but rather return only 80%, with the rationale being that this prevents frauds – accidents or thefts initiated by the owner of a car who simply don’t want them anymore.
Please visit the Auto Insurance Information Highway: The Comprehensive Resource to Auto Insurance
http://www.EasyDriverInsurance.com
Specific URL to the article:
http://www.easydriverinsurance.com/2009/05/auto-insurance-some-basic-definitions/
Filed under auto insurance price quote by on Jul 24th, 2009. Comment.