Auto insurance, also known as motor insurance, covers loss or damage that vehicles and two-wheelers incur. Auto insurance covers you, other people, and your car. The coverage for other people is a liability. So, if you crash into another person’s car, you are responsible for paying for their damages and bodily injuries. Instead of paying out of their pockets, people pay annual premiums to insurers who, in turn, pay part of the costs associated with the auto accident or other vehicle damage. The most common car insurance coverage options are discussed below.
Auto Liability Coverage
Liability coverage takes care of you if you are at fault in an automobile accident. It takes care of injuries subjected to other people and losses to their property while you or your family member was behind the wheel. So if you accidentally crash into someone else’s car and injure people in that car, your liability coverage will pay for not only the covered damages to their vehicle, but also for the medical expenses related to their injuries but not your own.
Medical Payments Coverage
Because liability auto insurance only takes care of injuries caused to the other person involved, you will need a medical payments policy to pay medical expenses related to injuries you or other passengers sustained in an accident. It doesn’t matter who is at fault.
Uninsured Motorists Coverage
It protects you if you are involved in an accident with someone who breaks the law by not carrying their auto liability insurance. It covers any medical expenses you incur when an uninsured driver hits you. Some drivers on the roads are uninsured, which makes protecting yourself necessary.
The other driver may have but not enough sum to cover all medical expenses. In this case, there is the underinsured motorists’ coverage for additional protection for when the other driver has insurance coverage but just not enough to cover all of your medical expenses fully.
The moment you drive off a car from the dealer’s shop, it begins to depreciate. In fact, most cars depreciate by 20% in their first year on the road. Collision and auto policies only pay up to the cash value of your vehicle. Gap auto insurance fits in by covering the difference between your cars’ market value and the amount you owe the lender. Read the policy’s fine print and talk to your agent to determine if it’s a provision when taking insurance. Leasing companies will include gap insurance as part of the agreement when giving out the car.
It protects your car against damage accidents don’t cause, such as theft, falling objects, or natural disasters. You can purchase the cover and combine it with collision insurance. You will be required to get it if you have a loan or lease.
If you suffer accident-related injuries, this cover ensures medical bills get paid quickly, no matter who is at fault. It helps with other expenses like lost income, childcare, or even a funeral. It is mandatory to have this in most states. Depending on the policy limitation, this covers at least 80 % of the expenses.
Most motor insurers extend coverage to rented vehicles covering for both collision and comprehensive losses. Provided you have at least one of those policies, on at least one vehicle on your auto policy. This coverage extends to you and other members of your household for operating a rental car.
However, if you don’t have full coverage of any personal auto policy, you may opt to purchase the Auto Rental Collision Damage Waiver, which is given at the time of renting the car. This will protect you from theft and physical damage to the rental car while it’s in your possession. It does not, however, cover your personal liability for bodily injury or property damage. Some rental companies may include conditions and restrictions which can void this cover under certain situations. Like violating traffic rules, so be sure to understand the terms.
Each of these policies may work independently, or you may need to combine several of them to be safe. Some are mandatory, while others are optional. It all depends on where you live. Read and understand the provisions for each policy to make the right choice. Get an agent to give you a detailed explanation of each, know which ones you need to purchase on the side and which ones come as a bonus. Also, get quotations from various companies before settling for one. Don’t go to the road without insurance; help protect public lives.
Written by Ester K. is a content writer at ladolcestudio.co.uk and a sales and Public Relations (PR nerd), obsessed with research, sleeping in as much as possible, and listening to podcasts. When I am not at home with my fam I enjoy long walks through the beautiful city of Jerusalem.