What is car insurance?
When you buy a new car, it becomes an asset for you. You will surely want to protect it from accidents and mishaps. The first step of protecting your car is to insure it under the right policy. To do it properly you need to know what is car insurance and its importance. There are many insurance companies who will provide protection of your car against loss occurred by accidents. You need to pay a monthly premium on your car insurance to the insurance company who will provide you with coverage up to a certain limit in case of any mishaps. To get really cheap car insurance you will need to compare rates from multiple companies.
In all states, it is compulsory to insure your car. Given below are the 2 main reasons why car owners insure their vehicle:
- It is the responsibility of the owner to pay compensation in case his car causes damage to someone else.
- To protect his car against damage caused by someone else’s car.
As you have got an idea of what is car insurance, check out the various types of car insurance. Choosing the right policy for your car is very important.
What are the types of car insurance?
Car owners can select from a variety of car insurance types that are available with the insurance companies. They can opt for the policy that suits their need better. Car insurance broadly provides policies of 3 types: liability coverage, physical damage coverage and uninsured and underinsured motorist coverage. All insurance policies are limited according to the terms and conditions provided in each plan.
- Liability coverage: Under this type of insurance, compensation is provided to someone who is physically injured or has died due to accident from your car. According to the insurance policy, bodily injury comprises of claims for medical bills, loss of income and many more. It also offers coverage if your car damages someone else’s property, which can be another car, house, fence etc. In case the other party decides to file a lawsuit against you, liability coverage plans will provide you with legal protection.
- Physical Damage Coverage: Under the policies of physical damage coverage of car insurance, your vehicle is insured for certain limited scenarios such as when the car gets stolen, damaged by flood or fire etc. It also insures when your car is damaged by another car or your car damages someone else’s car. This policy is good for new cars where you can use this plan to repair the vehicle.
- Uninsured and Underinsured Motorist Coverage This insurance coverage provides for all bodily injuries of the insured member as well as other passengers who suffered damage or death due to the accident. It can also be used in case of insured and uninsured property loss. But the limitation for coverage available depends on the monthly payment of the insurer.You should always remember that for finding a cheap car insurance policy, you must compare a number of insurers online.
There are many more car insurance policies apart from the ones stated above. If you want to protect your favorite car, you can consult a good insurance agent who will not only provide you with details about what is car insurance and its benefits, but also inform you about variety of plans to choose from.
Useful Resource:
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