Obtaining an auto insurance policy is very important to every sensible car owner. However, before you decide to purchase a policy or coverage for your car, you need to understand some common types of motor vehicle insurance.
Having motor vehicle insurance, basically, is having an agreement between you, the car owner and your auto insurance provider. Below are some types of basic auto coverage that you should consider.
One of the most common types of auto coverage policies is called liability insurance. It is a type of policy that covers a particular amount of injury and property damage in auto collisions caused by the policy holder. This type of policy is required in almost every state. Even in states that do not require liability insurance, drivers have to have a proof of their financial responsibility before they drive a car, and liability coverage is the most common type of this proof. With liability coverage, you will pay the premiums and your provider shoulders a certain amount of the damages you cause in an auto accident.
When procuring liability insurance, always make sure that the coverage includes all the assets you want to protect. However, if you use your car for business and have a lot of assets to protect, liability coverage is not enough for your situation. You may want to ask your provider about commercial motor vehicle insurance.
Now that you are familiar with the policy that protects yourself from other people’s claims, you also need to consider your passengers. Your passengers could make a claim against you if they are injured in a road mishap and the accident is ruled to be your fault. Always take into consideration the personal injury and medical coverage for yourself and everyone in your car.
Another common type of motor vehicle insurance is collision insurance. This car premiums policy covers the needed repairs for your own car should you get involved in an auto collision. Procuring collision coverage is a smart and affordable way to protect yourself if repair or replacement is not within your budget. You should consider the replacement cost of your car. If you cannot replace it, get a collision insurance. Another advantage for you is an auto collision policy covers a rental car while your damaged car is being replaced.
Aside from collision coverage, you should also know about comprehensive insurance. This auto insurance policy covers damaged caused in a non-collision event such as fire, flood, extreme weather conditions, vandalism and theft.