Nobody ever thinks it's going to happen to them. But the simple fact is that a car accident happens every 18 seconds in the United States. Even the most careful drivers can find themselves involved in one.
You cannot predict the future, but you can be prepared with auto insurance for the vehicles in your household.In most states, it is mandatory that drivers have at least minimum coverage auto insurance, which is
why it's important to find out your state's minimum requirements. But many drivers choose more than the minimum coverage requirements in order to protect themselves to a greater degree.
What is Auto Insurance?
Simply put, auto insurance is a safety net. It is a contract that you have with an insurance company in which you agree to pay a premium, and in the event of an accident, the company agrees to pay for your covered damages, as outlined in your specific insurance auto policy.
It is important to familiarize yourself with the terms 'premium' and 'deductible' when shopping for auto insurance.
An insurance premium is the amount of money your insurance company charges you for a certain policy.
Your deductible is the amount of money that you are responsible for paying when damages occur as the result of an accident. For example, if you have $500 in damages as the result of an accident and a $100 deductible on your auto policy, you are responsible for paying $100 of the total damages.
If you are responsible for causing an accident or damage to other vehicles, your insurance generally covers the costs of repairs, legal fees and medical coverage for those who suffered injuries in the accident. Insurance policies also cover costs incurred when your car is stolen or vandalized.
Types of Auto Insurance Coverage
Generally, auto policies include several different types of coverage, all of which may be priced differently. For instance, insurance may cover:
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Bodily Injury Liability. This type of coverage
pays for medical bills, lost wages or income, pain and suffering, and
even funeral expenses for those injured in an accident where you were
legally responsible for their injuries. This coverage also pays for the
legal and court costs to defend you in a covered lawsuit. This type of
coverage is required in most states.
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Property Damage Liability. If you are responsible
for causing an accident, you are legally held responsible for repairs
to another person’s vehicle or property. Property damage coverage not
only covers the cost to repair the other person’s car, but it also
covers repair costs of anything you hit with your vehicle, such as a
street lamp, fence or building. This type of coverage is required in
most states.
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Collision. This type of auto insurance coverage
pays for damage to your car as the result of a collision with another
vehicle. Even if you are at fault for causing an accident, this type of
coverage will reimburse you for the cost of fixing your car once you
have paid the out-of-pocket deductible amount. If you are not at fault,
your insurance company can seek reimbursement from another driver to
cover the cost of repairs to your vehicle. Collision coverage is
optional in all states. However, if your automobile is financed, your
bank or lending institution will require you to have this coverage.
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Comprehensive. This coverage protects you for
losses due to hazards not caused by a collision with another vehicle.
This includes damages that are the result of theft, vandalism, fires,
falling objects, earthquakes and storms, or contact with animals, such
as deer. Comprehensive coverage is optional in all states. Though, like
Collision coverage, if your vehicle is financed, your bank or lending
institution will require you to have this coverage.
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Uninsured and Underinsured Motorist Coverage.
This policy protects you and other passengers in your automobile if you
are injured in an accident by a motorist who is uninsured and held
legally responsible for your injuries. It pays the medical expenses and
related expenses you have incurred up to the coverage limits you select.
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