Pretty much everyone who owns and/or operates a car will need to have a certain level of auto insurance coverage to protect themselves and other individuals should an accident happen. It is also required by law and mandated by lenders should you have a loan on your vehicle.
Types of coverage
Car insurance varies from minimum to full coverage, the costliest having all the proverbial bells and whistles. Liability insurance is what is required by most states as the minimum level mandated by law. The liability aspect of your coverage is what compensates for damages to other vehicles and property for which you are deemed at fault in an accident. Collision insurance takes care of the damages to your vehicle from a crash, while comprehensive helps with damage brought on by such events as weather, vandalism or theft. Basically, with comprehensive coverage, the insurance pays for damage to your auto caused by anything other than a collision. Some states may also require that you carry personal injury protection as well, which is for medical costs not covered by health insurance should you be injured in an accident.
It is pretty obvious that anyone who operates a motor vehicle needs at least liability coverage. Again, should you have a loan on your car, your financial institution will require you to have not only liability but collision and comprehensive as well. It also makes perfect sense to also carry proper coverage on a newer car, even if you paid for it outright. A car is no small investment and it is smart to do so.
How it functions
Should you be involved in an accident, you then file a claim with your insurer as soon as possible. If you’re deemed at fault, your insurance provider will handle whatever damages are covered under your policy after you have paid the previously agreed upon deductible amount (assuming that you have paid your premiums). If the other driver is at fault, then his or her insurance company pays.
The pluses
There are two big benefits in obtaining good car insurance: First off, there is protection for any loss you might incur and there is the added protection for liability. In obtaining proper insurance coverage, you can have the peace of mind in knowing that you will be compensated for damage to property (including your vehicle) and that you will be able to pay for damages to another driver’s car and any additional property damage if you are the one at fault.