Due to the growing number of car owners, traffic has gotten worse. Even road accidents doubled in number through the years. But the sad thing is, according to statistics, even the number of motorists who does not have car insurance is also increasing in numbers. The reason for such is maybe because of the current recession that hit our land. But still, driving without indemnity is not only against the law but is a very unwise thing to do.
Being on the road without auto insurance leaves a motorist unprotected. But availing of cheap insurance for the sake of having one might also leave a motorist underinsured. To avoid being faced with difficult situations and unexpected expenses, learning the basic types of auto insurance coverage should be a must for everybody.
Here are the basic types of auto insurance coverage motorists should be familiar with:
- Liability Coverage. This type, which includes both Bodily Injury and Property Damage Liability Coverage, protects the policyholder even if he/she is found to be at fault in an accident. This also insures, thru Bodily Injury Liability, all hospital expenses needed by all the parties involved. Aside from that, vehicles of the policy holder and the aggrieved party are also included in the coverage.
Under this coverage, legal counsel is also provided for the policy holder if in case he is in need of one in cases where a settlement outside court is not possible.
- Personal Injury Protection (PIP). This type of coverage is also referred to as the No Fault Insurance Coverage. In contrast to bodily injury liability coverage, this coverage includes hospitalization of those involved in the accidents regardless of who is at fault. What’s even more advantageous is that it includes the expenses of all passengers.
- Underinsured or Uninsured Motorists Coverage. This coverage includes hospital expenses even if the other party involved is uninsured. Although not mandatory to carry, this is an advantageous coverage especially to those who are underinsured.
Aside from the auto insurance coverage discussed above, there are still others which are offered by auto insurance companies. Just put in mind that choosing the policy that will suit your needs starts from understanding what these policies are for. While saving up on auto insurance premiums seems to be a very wise move, also think of where an incomplete policy can take you. Though it is good to save up on things, auto insurance is sometimes not just one of them.
