Types of Car Insurance Coverage and Who Needs Them by josetenorio


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									      Types of Car Insurance Coverage and Who Needs Them
When things and events are unforeseen, people tend to be frightened. This anxiety increases when these
risks pose danger to lives and properties. Over the years, experts in the science of probability have gone
through sleepless nights reducing risks to predictable and controllable elements. But the dynamics of human
experience and the impersonal nature of calamities continue to frustrate their efforts in this elusive task of
calculating risks.

Nonetheless, human beings have learned through time how to manage risks and reduce losses as a result.
Families are creating bank accounts, into which they save up money, to mitigate the cost of future risks,
such as health emergencies, job retrenchment, natural calamities, deaths, and accidents. But because of the
increasing annual inflation, others with sufficient resources are buying insurance policies to be covered
during such times.

When people enter into an agreement with insurance providers, they are managing risks by transferring the
burden to another. Insurance providers work like a savings group, wherein its members have expressed
willingness to combine resources with others, and thereby, share the risks as well. A high level of trust and
reliability characterizes this type of relationship, which when sometimes broken, have huge financial and
legal repercussions.

Today, most people are exposed to risks relating to cars and vehicles. The probability of meeting an accident
in one's lifetime is relatively high, especially for those living the urban jungles. Nonetheless, accidents are
still risks that most will want to be covered, whether they are drivers, passengers, pedestrians, or simply
owners of business establishments along the road. This explains why administrative governments are
requiring car owners to be covered by an insurance provider.

This type of car insurance coverage is called the Third Party insurance. This public insurance, in principle, is
legally required so that the general citizens and public properties are protected from damages caused by
road accidents. Driver who desire to hedge oneself, the car, and its passengers from possible damages or
loss of lives go an extra mile and purchase another auto insurance with a private insurer.

Liability coverage can be for a driver who wants to be hedged in an accident he or she is responsible for. This
type of car insurance coverage only pays for the personal injuries and property damages sustained by the
other party. However, this does not cover the damages that the driver at fault may have suffered in the
same accident. So, in addition to the liability insurance, the insured may pay in advance a deductible called
Collision coverage.
UIM or Underinsured Motorist coverage protects the driver in an accident against a party without car
insurance, or with one that cannot sufficiently cover for the damages suffered. UIM is indispensable these
days, because of the increasing number of people driving on the road devoid of any insurance protection.
This coverage type is often not included in most Comprehensive insurance policies, so it is recommended
that drivers going for Comprehensive coverage to look for insurers that include UIM.

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