Insurance and Credit

Car insurance is designed to protect the policy holder (usually the owner or driver of the car) from financial loss as a result of a car accident. To get this protection the policy holder pays a regular premium which varies according to a number of factors like the driver’s age, the type of vehicle, the driver’s history and location to mention just a few.

There are several different forms of car insurance to protect the plan holder from costs associated with damage to the vehicle, damage to property and bodily harm of all persons involved in a car accident. The different forms of 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 provides payment for damage caused to your vehicle in the event of a collision with another vehicle or object.

Comprehensive cover which provides payment for various types of damage including theft, fire, malicious mischief and damage resulting from severe weather.

Medical cover which provides payment for any medical expenses for injuries resulting from an auto accident.

PIP (Personal Injury Protection) cover which pays for any medical expenses when injury is sustained in an automobile accident, regardless of who caused the accident.

Uninsured and under-insured cover which provides payment for any damages which you sustain in the event that the other driver involved in an auto accident does not carry sufficient insurance cover.

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.

Additionally there are a number of states that are called ‘no-fault’ states in which policy holders can recover financial losses from their own insurer, irrespective of who is found to be at fault in a car accident.

Tags: auto insurance, car insurance, cheap car insurance

This entry was posted on Thursday, May 7th, 2009 at 1:22 am and is filed under Auto Insurance. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.