Simply put, auto insurance is an agreement between you and an insurance firm that protects you against loss and damage due to your vehicle, in the event of an accident or theft. Read on as we examine the basics of Auto Insurance.
Auto Insurance Provides Coverage For:
Property: Which includes any damage or theft of your vehicle.
Liability: Your financial liability to others for bodily injury or property damage in the event of an accident.
Medical: The medical expenses associated with rehabilitation, treating injuries, and at times lost wages and funeral expenses.
Who Is Protected by My Auto Insurance—and Under What Circumstances?
Your auto policy will cover you and other relations on your policy, whether while driving your car or someone else’s car. Your policy also provides coverage in the case that someone who isn’t on your policy is driving your car with your consent.
Is Auto Coverage Mandatory?
Nearly every state in the US mandates that car owners have the following coverage:
Bodily injury liability: Which covers costs related to injuries or death that you or another driver causes while driving your car.
Property damage liability: Which reimburses others for damage that you or another driver operating your car causes to a different vehicle or other property, like a fence, building, or utility pole.
What Other Sorts of Auto Coverage Are Typical?
Here are some optional coverages that are commonly added to auto insurance policies:
Collision Reimbursement: This provides coverage for any damage to your car that happens as a result of a collision with another vehicle or other object—e.g., a tree or guardrail—where you are liable.
Comprehensive Coverage: This provides coverage against theft and damage caused by any event apart from collisions like fire, flood, vandalism, hail, falling rocks or trees, and other hazards.
Glass Coverage: This specifically provides coverage for any windshield damage. In some cases including side windows, rear windows, and glass sunroofs.
What Is Gap Insurance?
Collision coverage and comprehensive coverage only cover the market price of your car and not what you purchased it for. If your car is stolen, there could also be a “gap” between what you owe on the vehicle and your coverage. This is where gap insurance can step in to cover the balance amount.