Different types of auto insurance policies, so let’s get to know them

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What is an auto
insurance policy and what will an auto insurance policy cover? Auto insurance
service provides protection for the driver and passengers in the event of an accident.
But it’s up to you to choose the level of protection you get.
What questions should
you ask your auto insurance service provider regarding auto insurance?
 
in this article we
will discuss what are the different types of auto insurance policies? we will
provide them in detail so that when you read through to the end you will have
some knowledge of the different types of auto insurance policies.
 

Types of auto
insurance policies

 
Liability or
liability insurance –
This is often the
lowest form of auto insurance policy offered by auto insurance service
providers. This is the basic insurance policy that you can have, if you are
involved in an accident, and after investigation it has been proven to be your
fault, the auto insurance service provider will pay all of it. damage to the
other part of the accident.
The coverage that you
can get from the auto insurance service provider is usually defined in advance.
There is a basic maximum amount that they will pay you in the event that you
are involved in an accident.
 
For example, the
agent may agree to coverage of $ 10,000 per person for bodily injury and or $
40,000 for bodily injury and choose $ 10,000 for property damage suffered in
the accident.
 
You should confirm
with your auto insurance service provider what they will cover and what the
limits are. Some insurance companies may offer you a very low premium just to
make you realize that your coverage is minimal and unrealistic.
Collision coverage
and comprehensive insurance –
Simply put,
comprehensive insurance coverage gives you protection in the event that you are
involved in an accident and are responsible for the collision that the insurer
will pay for the repair of the vehicle.
 
But it doesn’t sound
simple as you might think, the auto insurance service provider will almost
always have the final say on how much to pay, so if it’s cheaper for them to
give you the market value of the car, then they most certainly will.
You might think your
car is worth $ 10,000.00, but its actual market value may be $ 5,000.00. This
is a common scenario. So, if it happens that the actual value of your car
repair is over $ 5,000.00, the insurance service provider will just pay the
actual value of the car.
 
you need to make sure
that your auto insurance service provider does not fully control the actual
market value of the car, normally an organization like the AA will always
provide an unbiased market value.
Regarding the third
party insurance policy, the insurance service provider will almost try to limit
the amount they will pay you, but generally speaking, the all risk insurance
policy will always have a higher limit.
Recreational vehicle
A recreational
vehicle often requires its own insurance, recreational vehicle insurance is
quite different from basic auto insurance. You don’t have to assume this,
because your car has comprehensive insurance, and so does your recreational
vehicle.
 

Other types of auto
insurance

 
Medical, Injury and
No Outage Coverage –
This insurance will
cover the medical costs for you and your passengers in the event of a
collision.
The no-fault
insurance policy insurance service provider will pay you, regardless of who was
responsible for the accident. This gives you peace of mind for your family and
friends.
 
Personal injury
protection is often a minimum requirement that is practiced in some states or
countries, you can ask your insurance service provider what the requirements
are in your state.
 
Insurance coverage
for underinsured / uninsured motorists –
This policy provides
protection to insureds if the offender is underinsured or not at all insured.
It is advisable to ask your insurer what your costs will be in case you are
involved in such a situation. Normally, the insurer should not charge you
additional premiums.
 
Rental reimbursement,
towing and labor –
This additional
coverage often given with comprehensive insurance is considered special by auto
insurance companies.
So in case your car
gets damaged, the insurance service provider will only pay you the rental fee
for just two days. They may also offer to pay for the towing of your vehicle
but not always included in the policy. You can also ask your insurance company
what is included in the coverage.
Legal requirements.
 
Most countries and
sometimes states will require some level of coverage ranging from full
comprehensive auto insurance to third party auto insurance.
However, in most
cases it is normally up to you, the driver, to make sure that your insurance
service provider offers you the minimum requirements you deserve. In most
cases, they are not required to inform you of the requirements.
 

What you
need to know about your first auto insurance policy

 
Buying your first car
is an important step. The independence that comes with having your own set of
wheels is a great privilege. At the same time, owning a car means that you have
an important choice to make: what coverage do you need in your first “on your
own” auto insurance policy?
It’s tempting to ask
your agent for the cheapest policy. After all, you have a lot of other expenses
to cover now that you own a car. However, once you fully understand what each
part of your auto insurance policy covers, you can decide that cheaper isn’t
necessarily better. Think about it: If your car has been in an accident or
you’ve seriously injured someone, a few extra dollars in insurance coverage per
month could be money well spent.
Here are some of the
common coverage to consider for your auto policy.
 

COVER THAT HELPS PAY
FOR THE DAMAGES YOU CAUSE

 
There are two types
of liability coverage. Both are required by law in most states.
Bodily civil
liability:
If someone is injured
as a result of a car accident you’ve caused, this coverage could help pay for
your legal fees, as well as the person’s medical bills and lost wages. This
coverage often has two separate limits: one that applies to each person injured
($ 50,000, for example) and a second that applies to each accident (for
example, $ 100,000).
 
Learn more about
personal liability coverage.
Liability for
material damage:
If you damage someone
else’s property, such as a fence or garage door, with your vehicle, this
coverage can help protect you. Property damage coverage can help reimburse the
other party for their losses, so you don’t have to pay them out of pocket.
Learn more about
liability coverage for property damage.
 

A COVER THAT HELPS
YOU PROTECT YOU IF YOU ARE INJURED

 
Personal Injury
Protection (PIP):
If you’re injured in
a car accident, this coverage can help pay for your health insurance deductible
(if you have one) as well as medical bills that exceed your health insurance
limits. This coverage can also help you pay for lost wages and “lost services,”
such as picking up your children from school while you recover. In the worst
case, the PIP can help you cover your funeral costs. Keep in mind that PIP is
not available in all states.
Learn more about
personal injury protection.
Medical payments:
Like PIP, this
coverage can help you pay your medical bills related to a car accident.
However, this coverage also extends to your passengers and a family member who
was driving the car at the time of the accident. Plus, if you or a family
member is injured in another car or as a pedestrian, this coverage can help pay
for medical bills.
Learn more about
medical payment coverage.
 

COVERAGE THAT HELPS
YOU PROTECT YOU FROM UNINSURED DRIVERS

 
Uninsured /
underinsured motorist:
This coverage can
help protect you if you are hit by a driver who does not have auto insurance or
whose policy limits are too low to cover all costs of the accident. This can
help you pay your medical bills and, depending on your state’s insurance laws,
possibly any damage to your vehicle.
Learn more about
coverage for uninsured / underinsured motorists.
 

COVER THAT HELPS
PROTECT YOUR VEHICLE

 
Collision:
If you need to repair
or replace your vehicle after a collision with another car or object, this
coverage can help cover the costs.
Learn more about
collision coverage.
 
Full:
 
This coverage can
help you pay for damage to your car that is not related to a car accident.
Examples: theft, damage caused by animals, fire or falling objects.
Learn more about full
coverage.
 
Guaranteed asset
protection (GAP):
 
If your vehicle is in
an accident or stolen, your insurance company will generally pay you the fair
market value of the car. However, if you still owe a financial institution more
than the value of the car, GAP coverage can help you pay off the cost
difference.

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