To determine the right insurance coverage, it is important to know what they are and what benefits you receive when purchased.
Liability auto insurance covers damages to another property which had been inflicted or which had been caused by the insurer. By law, having liability insurance is mandatory; limits and conditions however, vary from state to state.
There are two types of liability car insurance; The Bodily Injury and The Property Damage.
The Bodily Injury covers the medical expense and the Property Damage covers the damages done to the car or other personal properties during the accident.
The Collision auto insurance covers the damages done to the insurer’s car brought about by collision. There is a deductible applied, and the owner of the car can have the option to choose a higher deductible so long as they can afford it. Having a higher deductible, the premium or the cost of the policy is lower. When you have an older vehicle, it unadvisable to purchase collision insurance, as its value is the maximum paid. In case you are financing or leasing, collision insurance is usually a requirement and is a part of the loan or lease terms.
The Comprehensive auto insurance coverage covers all the damages caused by non-collision accident. Similar with the case of financed or leased cars for the collision coverage, lenders also require comprehensive insurance for such cars. Some of the damages covered by the comprehensive auto insurance are theft, vandalism, natural occurrences and fire.
The uninsured motorist coverage covers the medical cost and damages on properties caused by the party at fault (not the insurer) when he is not covered by any car insurance. This type of coverage is also used when the party at fault’s coverage is insufficient. Having uninsured motorist insurance, is mandatory in some states.
These are just some of the most important and common insurance coverage you can choose from. For a better understanding, request your insurance agent to explain things to you without the insurance jargons. Obtaining and understanding the different options will assist you in making a knowledgeable decision.
