UNDERSTAND WHY YOUR CAR NEEDS INSURANCE AND WHAT IT ENTAILS
Basic auto mobile insurance is required by each state and it provides financial compensation and protection in case of an accident. IS THAT REALLY ENOUGH?
This article will help you understand fully how car insurance works to smartly choose the right coverage.
Auto insurance is a contract between an insurance company and you that prevents against future financial loss in the event of accident and theft. When you pay your premium, the insurance company then covers cost involved in any fatality as outlined in the policy.
Coverage is provided in 3 areas:
Health Care- In the event of causality sustained during an accident, the insurance company bears the financial burden as outlined in the policy.
Property – In the event of theft or destruction of care in an accident, the insurance company bears the financial burden as outlined in the policy
Liability -The insurance company bears the financial burden for 3rd party body injury or property damage.
Auto insurance coverages are applied for according to individual capability to let you customize coverage amounts to suit your budget and needs. These auto insurance policies are renewable and have a 6month to 1year usage allowance before they are obligated to pay their premium.The insurance company often send a message to remind the insured to pay up premium.
DIFFERENT AUTO INSURANCE COVERAGES.
1. Auto policy
This policy covers your family members and yourself. Whoever drives your vehicle with your consent is covered under this type of insurance coverage.
2. Personal auto policy
This policy only covers the owner of the vehicle. It is a personal policy which means that it doesn’t cover other people driving your vehicle whether with your permission or not.It does not also cover when you are using your vehicle for commercial purposes.
Personal auto policy does not provide coverage when you use your car for transportation purposes like Uber etc.
IMPORTANCE OF AUTO MOBILE INSURANCE.
The degree of auto mobile insurance requirements vary from state to state. Both as an owner or a lender of a vehicle, it is advisable that your vehicle is insured in case of casualty like:
Property damage liability: This insurance package reimburses others for damages to their property caused by the insured vehicle.
Bodily injury liability: This insurance package covers financial cost incurred during an accident which results into injuries or death of the insured or other persons.
SOME OTHER INSURANCE PLANS:
Uninsured motorist coverage: The insured is financially compensated when his insured vehicle is run in by uninsured motorist. It covers cost when the uninsured motorist cannot fully pay such costs.
Collision: It reimburses you for damage to your car that occurs as a result of a collision with another vehicle or other object—e.g., a tree or guardrail—when you’re at fault. While collision coverage will not reimburse you for mechanical failure or normal wear-and-tear on your car, it will cover damage from potholes or from rolling your car.
Comprehensive plan: This provides coverage against damage and theft caused by an incident but necessarily an accident. It actively covers every other hazards.
IS THERE NEED FOR GAL INSURANCE?
There might be a gap between what you owe in case of an accident and what an insurance package actually financially covers because Collision and Comprehensive plan both only cover the market value of your vehicle whether depreciated or not.
A gap insurance plan is usually purchased to cover this gap.