Car_Insurance_Basics

							Title:
Car Insurance Basics

Word Count:
503

Summary:
Car insurance is basically insurance that drivers can purchase for any
kind of vehicle in order to protect against losses sustained in traffic
accidents. Auto insurance policies are, in reality, a bundle of
different coverages.


Keywords:
Car insurance, Auto insurance, collision


Article Body:
Car insurance is basically insurance that drivers can purchase for any
kind of vehicle in order to protect against losses sustained in traffic
accidents. Auto insurance policies are, in reality, a bundle of
different coverages. This insurance will usually cover the insured
party, the insured motor vehicle, and any third parties involved.
Different policies will identify the situations in which each of these
entities is covered.

Below are the specific coverages involved when you purchase car
insurance.

- Liability Insurance: Liability coverage is the most basic and
foundational coverage in car insurance policies and is required in most
states. This coverage ensures that if you are the one at fault in an
accident, your liability insurance will pay for the physical injury and
property damage expenses of any third parties involved. This coverage
includes legal bills. Remember that third parties can sue you for “pain
and suffering” damages. Minimum insurance may not sufficiently cover you
in more extreme cases, which is why many people recommend that drivers
purchase more than the state minimum required. Liability coverage limits
are usually conveyed with three numbers. For example, liability limits
of 20/50/10 indicate that there is coverage of $20,000 in bodily injury
coverage per person, $50,000 in bodily injury coverage per accident, and
$10,000 in property damage coverage per accident.

- Collision Coverage: In the case that you are in an accident, collision
insurance will pay for the repairs that your vehicle requires. Collision
coverage is usually the most expensive coverage that you will have to pay
for. Insurance companies will declare a vehicle “totaled” or a “write-
off” if the replacement would be cheaper than the repairs needed.

- Comprehensive Coverage: This coverage will pay for any damages to an
automobile that were not caused by an accident. Qualifying damages
include damages arising from carjackings, vandalism, natural disasters,
and hitting an animal.
- MedPay, PIP, and No-Fault Coverages: MedPay will pay for the medical
expenses of you and anyone else in your car after an accident, regardless
of whose fault the accident was. PIP (Personal Injury Protection) and
“no-fault” coverages are other forms of medical payment protection. They
are broader than MedPay and may be required in certain states. These
expanded coverages cover child care and lost wages.

- Uninsured and Underinsured Motorists Coverages: UM (Uninsured
Motorists) coverage will pay for injuries you have sustained if you are
involved in a hit-and-run by a driver who does not have auto insurance,
and is mandatory in many states. UIM (Underinsured Motorists) coverage
will pay for you if the driver who hit you creates more damage than their
liability insurance can cover.

- Supplemental Coverages: Rental reimbursement is an add-on that will
cover rented vehicles in case of damage or theft. Auto replacement
coverage ensures that your automobile will be fully repaired for replaced
even if the costs are more than its depreciated value. Coverage for
towing and labor covers you in case of an auto failure on the road where
towing is necessary. These supplemental coverages are usually offered as
separate items or included in larger policies.