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Auto Insurance

Basic Introduction to Auto Insurance

Auto insurance is usually a person’s first encounter with insurance. That’s because even teens with cars need auto insurance. Coverage protects individuals from the financial consequences of collision, damage, and theft. Some policies have additional benefits, like rental car protection, roadside assistance, and reimbursement for towing costs.

A car insurance policy is designed for anyone who owns a car. It protects drivers via financial support following an accident, property loss, or car damage. If the policyholder is at fault and someone s hurt, then car insurance will pay medical expenses for those who are injured.

Any driver needs insurance as long as they own a car. Coverage will include the policyholder and others listed on the policy. Most people add family members or close friends to their policy. Car insurance is paid on a monthly, quarterly, semi-annually, or annually basis. When a covered event occurs, like a car crash, then the policyholder files a claim. The insurance company investigates the claim, and decides to pay or not.

Different Types of Insurance

Car insurance policies have various coverage options. Bodily injury coverage means people injured in an accident will receive monetary compensation. Property liability coverage will cover any items that were damaged or stolen from the car. Collision coverage covers the actual cost of a collision between vehicles. The policyholder will have to pay a deductible before the insurance company does its part.

Practically every state in the US requires drivers to have auto insurance. Driving without it is illegal. Each state has certain requirements regarding the amount of insurance required and the amount of liability necessary. Learn what your state requires before getting a car.