Auto liability insurance is a kind of car insurance policy that is required by law in all states. Liability coverage helps to cover the expenses of the other party if you’re responsible for the accident.
This policy will pay medical costs and damage to properties caused by your car. You’ll be covered if the other driver isn’t at fault, even if it was your fault.
Collision insurance covers damage to a vehicle caused by collisions with another vehicle or object. In most cases, comprehensive coverage doesn’t pay the car owner for damages to their vehicle caused by vandalism, theft, or malicious mischief.
Comprehensive coverage can also include payment for damage due to fire, flood, windstorm, earthquake, vandalism, or acts of nature. Some states limit the amount of your deductible in order to keep the cost of insurance as low as possible.
If you have a high deductible, you’ll pay more money as premiums. There are several factors that determine what levels of collision insurance coverage you have as well as the price of your premium.
The level of limits you choose will also affect the price you pay for insurance. The higher the limits, the lower the cost of your premiums.
One factor that most people fail to consider when purchasing car insurance is the actual value of their car and the amount of collision insurance coverage they want.
Collision and Liability insurance coverage is sold in two parts – collision and liability. With liability car insurance, you’re responsible for other people’s medical bills and property damage if you cause an accident.
Collision coverage pays for repairs to your car and any other damage caused by your car.
Liability coverage will also cover your repair costs and any expenses for property damage you may incur. Both of these are calculated on the amount of coverage you have chosen and will vary from company to company.
The liability portion of liability insurance rarely provides actual cash value, which means it is only available if the other party can prove they were caused the injury or damage sustained through no fault of your own.
You could be covered with only liability auto insurance if the other driver’s insurance was inadequate or if they had no insurance at all.
This type of insurance is not usually required, but it is certainly recommended.
Comprehensive coverage covers a number of circumstances besides damages caused by collisions. This type of insurance will pay for damage sustained to the paint job, exterior and interior of your vehicle as well as any mechanical damage to the vehicle such as suspension problems.
It typically requires that drivers have at least the state minimum insurance requirements. Comprehensive coverage is very important because it replaces your vehicle should you be in an accident that was your fault and covers other expenses if the vehicle is totaled.
The final type of policy that you will need is uninsured or underinsured motorists coverage. This coverage covers the cost of repairs, if you or a passenger in your vehicle is injured or damaged as a result of an accident with a driver who has no insurance or inadequately compensated for their accident.
There are some states that require this coverage to be carried at all times. It covers the cost of repair to your vehicle and also the medical payments if you are injured in someone else’s vehicle.
Although this policy is rarely requested, it does keep you from losing out on money if you were in an accident with someone who did not carry enough insurance or whose insurance was inadequate to pay for your damages.
Car insurance helps cover a variety of circumstances and helps keep you and others safe from accidents and injuries. However, just like other types of insurance, it is important to know exactly what it is that you are getting before you sign on the dotted line.
Be sure to choose a coverage level that is adequate and cost-effective. Make sure that the coverage matches the type of vehicle you drive, the age and size of the driver, and your place of employment.
This knowledge will help ensure that you choose a policy that provides the protection you need at a price you can afford.