We all have got expensive cars parked in our garages and pay a hefty amount for its motor insurance cover. Here we are going to shed some light on the basics of car insurance, how it works in our favor, what are the benefits that you can avail with this simple guide.
We spend so much money on buying a car that is no less than a prized possession for most of us. As the state makes it mandatory to have insurance cover for your vehicle, it will always help if you have some information at hand.
What is a Motor Insurance Policy?
It is an insurance contract between the insurer and the insured to compensate for the loss or damage that is covered. Car insurance is required by the law in most states and if you face a car accident, your insurance policy will pay for the liabilities and the losses incurred like damage caused to your vehicle, other party’s medical bills, or damage caused to another property due to the accident. However, if you need legal assistance in dealing with the aftermath of a car accident, check out this car accident lawyer.
Not only this, but your auto insurance also covers your legal fees, if you need to visit the court after the accident.
Ever wondered what if your car breaks down in the middle of the road?
You can call for roadside assistance and the insurance provider will ensure that you get immediate help in case of a car breakdown. And anyone who takes their car out on the road can face many such similar emergencies that may arise on the go.
Car insurance offers financial protection by compensation for the cost associated with an accident including the repair costs.
With auto insurance cover you can protect yourself, your passengers, save yourself from legal liabilities in case another car is hit by your car, and you will require it while lending your leasing your vehicle. So, there is no way that you can skip one.
You can easily compare and buy car insurance online. You can check out Car insurance Policybazaar for different car insurance plans that can be issued in a few minutes.
Types of Motor insurance Coverage
Depending on where you live, some of the motor coverage might be optional while some of them are mandatory. Some of common motor insurance coverage options are liability coverage, comprehensive coverage, uninsured and underinsured motorist coverage, collision coverage personal injury protection, and medical payments coverage. If you know what is required in your state, you can pick the right insurance cover for your situation.
- Liability Coverage- This is the minimum amount of coverage that is set by most states. Car drivers are legally bound to have a minimum of liability coverage that has two components i.e. bodily injury liability, and property damage liability
- Comprehensive Coverage- This is typically an optional cover. It helps cover loss or damage to the insured car from fire, theft, vandalism, accidental repair and even auto replacement up to the actual cash value. There can be some deductibles, that you would need to pay from your own pocket. Your lender would require you to have comprehensive cover while leasing your vehicle.
- Uninsured and Underinsured Motorist Coverage- If your car gets hit by an underinsured or uninsured driver then you will get paid for the damage repairs. In some states, it is mandatory while in others it is optional.
- Collision Coverage- This one is optional too but is required by your vehicle lender or leaseholder
- Personal Injury Protection- It is required in some states and in other states, it is totally optional. It covers medical payments after an accident, childcare expenses, and even loss of income due to accidental injuries
- Medical Payment Coverage- It is required in some states and in others, it is totally optional and helps pay for medical costs related to accidental injuries
Check out Add-ons to Enhance the Risk Cover
The insurer pays only up to a maximum limit towards a covered claim. You may want to enhance your car insurance coverage limits else you could end up paying from your own pocket. Here is an instance, if you cause a wreck, which injures another car’s driver and the medical bills are more than your insurance coverage limit then the additional coverage would be beneficial.
While Some states may require you to get car insurance add-ons, like personal injury protection or uninsured motorist coverage. And if you have gap insurance on your car insurance policy, it helps pay off your car loan in case the vehicle is stolen. It is optional and works well with comprehensive and collision coverage.
Well, this is not it, some optional and additional covers that help reduce your out of pocket expenses are given below:
- Rental Reimbursement Coverage/Transportation Expense Coverage- It helps you pay for alternate transportation/rental car only for a covered loss
- Gap Coverage- It is mainly useful when you are financing or leasing a new vehicle
- New Car Replacement coverage- It helps when your vehicle is fully damaged, or it cannot be repaired after an accident. In some cases, if the care is less than 2-years old the insurer might also replace the car completely
- Ride-sharing Coverage- It helps in combining both personal and business insured cover in case of any accidental damage or repair. It certainly helps in reducing your out of pocket expenses
- Towing and Labour Cost Coverage- It helps in moving your vehicle from the place of accident to the repair garage. In case your vehicle is immovable it can be towed to the nearest workshop.
There are some deductibles that you can check before purchasing the policy. It may apply to comprehensive and add-on covers, which is the expense that you need to bear.
Over to you!
While everyone has a car insurance cover, but the laws can vary from one state to another and how much insurance coverage you should have. You can make sure that you buy as per the minimum car insurance requirements and further enhance it with various add-on coverage options.
