Buying just any auto insurance policy is not the right thing to do, to get maximum protection while driving. Buying the right kind of insurance policy ensures that the driver and the automobile is covered and protected in the event of unforeseen circumstance. There are many different insurance policies that are designed to provide choice to people and to customize the coverage depending upon what every individual drivers needs. Customizing insurance policy gives the driver the freedom to select the policies wanted and cancel the ones that are not needed. Some of the basic insurance policies are listed below to give a better understanding:
Liability Insurance:
Liability insurance is most basic auto insurance and it is mandatory to have this to drive in USA. Third party liability insurance protects other drivers on road in case of collision, if the policy holder is at fault. Liability insurance pays for the damages caused to the other vehicle involved in the accident, but it does not take care of the policy holder’s expenses. Driving without liability insurance can cause heavy fines when caught, not to mention the expenses that the driver has to pay for the other party’s damages.
Collision auto insurance is a basic auto insurance that is required to protect the cars even if the other drivers do not have the third party liability insurance. Collision auto insurance covers for damages resulting from collision of any kind. Collision insurance pays for the repair or replacement of the damaged parts of the automobile, but the insurance company decides whether to repair the parts or replace them. Collision insurance does not cover for the injuries resulting from accidents, to the driver or other members in the car.
Medical liability/ personal injury protection:
Medical liability pays for the treatment of other party’s injuries when it is the fault of the policy holder. It works like third party liability, but the expenses of the hospital are paid. Personal injury protection plan covers for the treatment expenses of the policy holder and other members in the policy holder’s car. Sometimes, the medical insurance may cover the treatment expenses, and in that case Personal injury protection is not needed. But confirming it with the insurance company is advisable before opting out of this policy.
Comprehensive Insurance:
Comprehensive insurance is a must-have if the policy holder resides in areas prone to natural disasters and rough weather. Comprehensive policy covers for the damages resulting from disasters like earthquakes, hurricanes and extreme weather conditions like heavy rains, snow, or hailstones. Comprehensive insurance also covers damages resulting from fire, vandalism or riots. It also covers the expenses due to theft of the vehicle. Comprehensive policy usually adds a bit more to premium rates, especially if the policy holder resides in the area which is sensitive to any of the above mentioned extremities.
The drivers get to choose the policies that are right for their needs, except liability insurance. But reviewing the insurance policy once every year is very necessary to add new policies required, or omit polices that are unnecessary.
