So how does car insurance work exactly? Well first, you need to know the basic types of car insurance and what they protect when it comes to any type of accident. There is liability coverage, personal property coverage, and personal injury coverage. Each of these has it’s own purpose and protect different things. Here is how each of those car insurance policies work.
Liability car insurance, also known as third party liability, extends protection to the other party and corresponding property involved in the accident. It also covers any medical concern raised by the third party. Briefly stated, liability insurance only protects you from paying damages to other people and their property, but you pay for the damages to your own car.
Liability car insurance also is the cheapest form of car insurance. So if you are on a tight budget, or have a vehicle that is out dated, you may want to choose this type of car insurance. Many states will allow you to have liability only, but some states make it mandatory for you to be covered 100 percent. Please check with your state for more information.
Property car insurance coverage is also referred to as comprehensive and collision. Comprehensive coverage covers you from impairment derived from factors other than accidents, such as hail, theft, and other uncontrollable forces. Collision coverage, as the name suggests, covers damage charges in a collision accident with another vehicle while driving your vehicle.
Personal Injury car insurance protect yourself from any medical expenses or damages due to a covered accident. Personal injury protection will coverage expenses such as hospital and medical, funeral expenses, and lost wages due to the accident. This is probably the most important type of car insurance other than liability coverage because you don’t want to be worrying about medical bills after a traumatizing experience.
Now that you are informed of the basic types of car insurance, you can get a fairly good idea how a car insurance works. It serves as security for you, the third party, and your vehicle from accidents and other circumstances that may arise. Getting a car insurance will help you relax if an unexpected situation shows up. It will come handy for finance related accidents.
Hopefully this brief overview of the three basic types of car insurance enables you to better comprehend how car insurance works, and why it is essential for you. Once more, liability coverage is the least type of car insurance you need to obtain most states, and it’s the cheapest of the three. For total security, get all types of insurance to make sure you get protected from damages and all costs that may arise from accidents and other factors.
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Written by Adam Levinch –