Car insurance provides protection for the policy holder (generally the owner of the vehicle) from financial loss as a result of a car accident. To benefit from this protection the policy holder pays a monthly premium which varies according to several factors like the driver’s age, the type of vehicle, the driver’s history and the driver’s location to name a few.
There are several different types of car insurance to protect the plan holder from costs arising out of damage to the car, property damage and injury to persons involved in an automobile accident. The various different types of insurance cover include:
Liability cover which pays for damages to other people or to their property in the event of a car accident and which additionally meets any court costs involved. In many states this is the bare minimum of cover required before you may drive a car on public roads.
Collision cover which is designed to pay for damage caused to your vehicle during a collision with another car or other object.
Comprehensive cover which is designed to pay for various types of damage including fire, theft, vandalism and extreme weather conditions.
Medical cover which pays for any medical expenses for injuries sustained in an automobile accident.
PIP (Personal Injury Protection) cover which will pay for any medical expenses when an injury is sustained in an automobile accident, regardless of who caused the accident.
Uninsured and under-insured cover which pays for damages sustained to you in the event that the other driver involved in an auto accident does not have insurance.
Every state makes its own rules governing car insurance and some types of cover will be mandatory in each state while others will be purely optional. For instance, some states only require you to have liability insurance while other states require you to have personal injury protection insurance cover.
There are also various states that are referred to as ‘no-fault’ states where insurance policy holders are able to recover financial losses from their own insurance company, regardless of who is deemed to be at fault in a car accident.
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