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Auto Owners Insurance Fundamentals


It does not take a financial expert to understand the fine points of auto owners insurance.  All that is required is several minutes and patience in reading the policy.  However, the apparent financial jargons and legal terms you would encounter can be more confusing than descriptive.  It may even make you think of rather having a lawyer explain it to you.  In these days, when prices of commodities and services are steeply rising, hiring a lawyer for that, even for just an hour, can leave you penniless. Hence, doing that is really unwise.  Nevertheless, you would still need to comprehend details of an insurance policy before agreeing to it. This leaves you with no option except that you to study it well by yourself.

Auto owners insurance is mandatory in most parts of the US.  However, there are cases when you can have a choice of paying for fees instead of an insurance coverage.  If you think that premiums are just another monthly burden, you can opt to just pay for one-time fees.  However, this is not a wise option.  You will find that out after you meet an accident and you have to deal with hospital expenses and auto repair, not just by yourself, but also for the other parties involved if it happens to be your fault.  By then, you will certainly regret not having insurance instead.

Insurance coverage types vary.  It is up to you to decide what to get, and this usually, depends on how safe a driver you are.  Coverage for uninsured or underinsured motorists pay for those involved in the accident who have inadequate or no insurance at all.  Medical payments coverage will take care of medical and hospital expenses.  You can also have total financial security with a comprehensive coverage, which includes non-accident cases such as theft, fire, and natural calamities.  Obviously, this option for auto owners insurance is the best although it can cost a lot too.

Body injury liability is the type of coverage commonly offered.  This indemnifies all the physical injuries and deaths incurred in an accident, which you have instigated.  Usually, there is a limit to cost per person and per accident. For example, if you find a provision on your policy that says 100/400, it means that the limit per person is $100,000 and per accident is $400,000.  You may also find it necessary to include coverage for property damage liability in your auto owners insurance. This pays for all the damage you caused on other people’s cars and properties.