Auto insurance should be thought of as an investment – meaning there could be something good for the policy holder in the future. The policy could benefit not just the policy holder but the family as well. There are different types of policies apart from the very basic ones and there are many coverage options. Most states have made it mandatory to purchase the minimum insurance required.
The basic details that one must take care of in the policy are the coverage as well as the deductibles. This is literally the heart of the policy where everything will rest including what the premium has to be. Deductible is the amount that the policy holder will pay out of his pocket in the event of an accident. As the deductibles go higher, the premiums will get lower.
There are different categories of coverage. Each category of coverage carries a different definition such as:
Personal injury protection – this covers the medical costs for those who are hurt in the accident. There is a pre-stated amount and could extend to other medical costs that are incurred such as rehabilitation, funeral costs, loss of wages and all other related expenses.
Liability coverage – this would typically cover the most common ones. The auto liability coverage offers coverage to the driver at fault as well as the person who is injured as well as damages to property caused by the accident. There is bodily injury liability where loss of wages, medical expenses, as well as other similar damages. There is the personal damage liability that covers any damage to property.
Collision coverage – this generally requires payment of the deductibles and the higher the deductibles the lower the premiums.
Medical payment coverage – this covers the cost of medical expenses or funeral expenses incurred in an accident.
Comprehensive coverage – this covers all the aspects that the collision coverage does not, which includes damage due to forces of nature such as fire, riots, floods, hurricanes, etc
Uninsured motorist coverage – in case an uninsured motorist causes the injury and cannot afford to pay, then this coverage will take care of it. In some of the states this might also include any damage to property.
Emergency road services – this typically includes towing in case of a vehicle breakdown.
Rental reimbursement – this covers the costs of the rental car and the amount could vary depending on the state law as well as the insurance policy.
