Auto insurance is mandatory in almost all states across the US. In simple terms, auto-insurance protects you against financial losses in the event of an accident. It exists as a contract between the owner of the vehicle and the insurance company. A regular premium must be paid from time to time, and the insurance company will cover the losses incurred as per the policy of the contract. Auto insurance quotes also influence the kind of insurance which will be provided to you. Auto insurance provides property, liability as well as medical coverage. The following are the types of coverage provided by auto insurance companies in the United States:
Liability: If you are found to be responsible for an accident, then liability coverage will cover costs of repairing the other party’s vehicle and also the medical expenses of the injured party. The minimum limits of coverage vary depending on which state you reside in. There are three limits of liability coverage options you can choose from:
property damage liability limit: The maximum amount which can be paid by the insurance company to cover property damage falls under this category.
Bodily liability limit per person injured.
Physical liability limit per accident.
In the latter, the insurance covers costs of multiple people affected by accident.
Collision coverage: Covers costs of damage incurred by your vehicle in an accident. Choosing the right deductible is essential for this type of coverage. The deductible is the amount you will have to pay before the terms of the policy sets in. People with older cars do not usually opt for collision coverage since they pay a high premium for lesser returns.
Comprehensive coverage: It covers damages done to your vehicle for which you are not responsible. For example, damages caused by environmental factors like a storm or heavy rainfall. If a rock falls on your car and causes a dent, comprehensive coverage will cover the cost of the damage done. It is nothing but an extension of collision coverage.
Thus, carefully evaluate your needs before purchasing auto insurance for your vehicle.