Auto Insurance

When one purchases an auto insurance policy, one enters into an agreement with the insurance company providing the coverage. In this agreement, the insurance company is obliged to provide certain financial compensation to the driver and his or her passenger(s) should an accident occur. The person who is named as the policyholder is in turn required to pay a premium on a monthly basis in order to keep the policy in effect and ensure that the insurance provider upholds its part of the agreement.
A “premium” is defined as the amount of money that the covered individual must pay to ensure the policy remains in effect. In the event of a claim, a “deductible” is a certain amount of money that the policyholder must pay first before the insurance company will cover its share of damages. A deductible varies depending on their policy but, in general, the higher the deductible the lower the premium.
In general, auto insurance will cover repairs, legal costs, and medical care for the driver and any passengers who are hurt in an automobile accident. Auto insurance can also pay for the cost of vehicle repair or replacement in the event of vandalism or theft.
Now days practically every state requires drivers to purchase some kind of liability coverage. Liability is the aspect of insurance that can cover bodily injury, medical bills, pain and suffering, lost income and funeral expenses. Should the holder of the policy be at fault, liability can also cover legal and court costs incurred as a result of an accident.
Property damage coverage is to provide compensation for the expense of repairing the other driver’s auto, and/or any other property damage. Collision coverage pays for the repairing or replacement of the policyholder’s car when damaged or “totaled” in an accident. Comprehensive insurance covers the costs of repairs from accidental or purposeful damage as a result of falling objects or acts of vandalism.
Uninsured (or underinsured) motorist coverage is highly recommended as well for it covers the policyholder in the event of an accident with another driver who has no or inadequate coverage.