What will a car insurance policy cover?

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Here's what you need to know...
  • Car insurance is designed to cover you financially in the case of an accident or other types of covered loss, or peril, involving your vehicles
  • Liability insurance covers bodily injury and property damage incurred by other parties at your hand
  • Uninsured/underinsured motorist coverage  provides coverage if you happen to be involved in an accident with a person who has no insurance or insufficient insurance
  • Personal Injury Protection (PIP), covers medical expenses, lost wages and even provides a death benefit for those who are involved in a car accident, regardless of fault

Car insurance is designed to cover you financially in the case of an accident or other types of covered loss, or peril, involving your vehicles.

Your coverage will certainly provide liability insurance coverage which protects other people who suffer a loss due to an accident where you are at fault.

The additional types of car insurance you decide to purchase will determine exactly what else is covered. Read on to learn the specifics of what auto insurance covers and doesn’t cover and then to compare free quotes for car insurance just enter your zip above!

Liability Insurance Coverage

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Liability insurance coverage is the most important type of insurance coverage to carry. In fact, in most states, it is mandatory for car owners to purchase liability insurance coverage.

Even in those states that allow drivers to use other methods to prove financial responsibility, most people will opt to carry insurance as their form of it.

Every state has a minimum amount of liability insurance that they require. While they differ from state to state, these limits are very low, without exception.

They are often set just high enough to cover the majority of car accident insurance claims but are completely insufficient to cover serious car accidents. Most insurance companies will encourage you to carry higher limits and you should do so, especially if you have assets you want to protect.

Liability insurance covers bodily injury and property damage incurred by other parties at your hand.

This means if you are responsible for the accident, your insurance company will pay for injuries other people suffer and any damage to their vehicle or other personal property. Liability coverage does not cover you or your vehicle.

Personal Property Coverage

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If you want your car insurance coverage to cover your vehicle you will need to invest in two other forms of car insurance.

You will need to take out collision and comprehensive coverage. These give you personal property protection for your vehicle and will be required by your lender if you happen to have a loan on your car.

Collision will pay for the damages to your vehicle if you are involved in an at-fault accident. Of course, such coverage is subject to a deductible, which is the amount you pay before your insurance kicks in.

Comprehensive will pay to repair your vehicle, minus the deductible, if you have a loss as a result of one of the covered perils. These include things like theft, fire, vandalism, storm damage and animal collision.

The types of things that are not included under any car insurance are intentional damage to your vehicle, normal wear and tear and breakdowns that occur in the normal use of your vehicle.

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Other Types of Coverage

There are several other types of car insurance coverage that you should know about and invest in.

Uninsured/underinsured motorist and personal injury protection are two that are very important to carry and will cover you in a variety of situations.

Uninsured/underinsured motorist coverage will provide coverage for you if you happen to be involved in an accident with a person who has no insurance or insufficient insurance, or if you are the victim of a hit and run accident.

UM, as it is known, will provide for medical expenses and in some cases will even cover vehicle repair and replacement car rental.

Personal Injury Protection (PIP), covers medical expenses, lost wages and even provides a death benefit for those who are involved in a car accident, regardless of fault.

It is mandatory in several states, especially those states with “no-fault” insurance. One of the biggest benefits is that it provides immediate coverage when you need it, without having to wait for a third party claim to be worked out.

Other types of car insurance coverage exist also. Rental reimbursement and towing coverage are automatically included in many full coverage insurance policies.

Such forms of coverage will provide for a rental car to replace your vehicle following an accident and will even provide for the towing cost to get your vehicle to a mechanic. In addition, you can opt to put gap coverage on your policy, which will pay you the difference in the actual cost value and the balance of your vehicle loan.

This is a very wise move if you have a heavily financed vehicle.

In order to make sure you have the car insurance coverage that you need and want, you should review your existing policy. If there are things that you need covered that are not covered, they can usually be added with a simple phone call to your insurer.

Alternatively, you may want to shop around and get prices from different insurers, to be certain you are getting the best deal possible for your car insurance needs.

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