Auto Insurance Definition:
Auto insurance an insurance which protect you from the financial losses due to misfortune in case you met with an accident. It is a agreement between vehicle owner and insurance company. Insurance company agrees to pay financial losses due to vehicle collision and in return company charges premium for the financial cover.
A premium for “Auto Insurance” varies from age, driving record, years of driving experience, gender, violation history, etc. Mostly everywhere basic auto insurance is compulsory when you purchase a vehicle. Many people opt for additional coverage by paying additional premiums. Also note that if you have a poor driving record or violation history, you may have to pay higher premium.
Basic auto insurance coverage includes vehicle coverage due to damage or loss. This includes cover due to thief, Legal obligation coverage towards others for substantial harm or vehicle damage and medical coverage for expenses incurred while treatment.
Types of Auto Insurance Coverage:
Here we are going to understand “Different Types of Auto Insurance Coverage” offered by insurance companies. This will help you to evaluate “what does auto insurance policy covers”. There after you can decide the better option for your requirement.
1. Liability Coverage:
Liability coverage is most important and is compulsory in most of the states. If you met with a vehicle accident and result into injuries and property damages to third party, In that case liability coverage auto insurance will pay claims for damages incurred to third party and also for legal proceedings.
2. Accidental Coverage:
Accidental coverage protects you from any financial losses incurred due to vehicle damage or damage due to collision with other vehicles or objects.
3. Comprehensive Coverage:
Comprehensive coverage protects you from losses apart from your accidental coverage. This comprehensive coverage includes loss due to theft, damage due flood, storm or other natural disasters.
4. Medical Coverage:
Medical covers your medical treatment expenses incurred for anyone injured or substantial harm regardless of whose mistake.
5. Uninsured Coverage:
Uninsured coverage can help paying damages or medical treatment expenses to someone who does not have sufficient insurance coverage.
6. Personal Injury Protection:
Under personal injury coverage pays medical expenses until complete recovery extended to cover lost of wages or any other personal injuries.
Since auto insurance protection coverage varies from states. We recommend you to contact and work with your state sales representative for exact details. You should clarify coverage clauses before buying auto insurance policy. You should also evaulate which auto insurance fits your budget and your needs.
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Basics of Insurance for Beginners
- Chapter 1: What is Insurance Policy and Types of Insurance
- Chapter 2: Fundamentals of Risk and Insurance
- Chapter 3: What is Health Insurance Policy and Types of Health Insurance
- Chapter 4: What is Disability Insurance Policy and Types of Disability Insurance
- Chapter 5: What is Life Insurance Policy and Types of Life Insurance
- Chapter 6: 4 Key Consideration Clause of a Life Insurance Policy
- Chapter 7: What is Term Insurance Policy and Types of Term Insurance
- Currently Reading: What is Auto Insurance Policy and Types of Auto Insurance
- Chapter 9: What is Home Insurance and Types of Home Insurance
- Chapter 10: What is Travel Insurance Policy and Travel Insurance Coverage
- Chapter 11: Other Different Types of Insurance Policies
- Chapter 12: Tutorial Quiz – Basics of Insurance for Beginners Module
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