Learn how does car insurance work? This article will provide all the basic information about car insurance process, the types of car insurance policies, and how much car insurance will cost you per month.
Basic information on car insurance coverage
There are many kinds of car insurance policies for different situations. Car insurance schemes and policies are tailored to protect you financially in an event of an accident. A car insurance policy can protect you if your car is damaged during a collision with another vehicle, theft or robbery, damages caused by bad weather. The car insurance policy will cover your medical bills for injures due to an accident or for the person/persons injured during an accident.
The insurance company will pay you for your loses, after you have made a verifiable claim for a financial coverage (an amount specified) stated in your insurance policy.
How is car insurance obtained?
Generally, you select one or more policies offered by an insurance company. There is a down payment, equal to a one month’s premium amount. This down payment is non-refundable.
You are the policy holder. The monthly payment to the insurance company is called a premium. You can have more than one insurance policy. The company keeps you financially covered as long as you are paying the monthly premium amount, agreed upon in the policy.
The company will pay the amount not exceeding the amount agreed to in the policy.
The different kinds of insurance policies
Different insurance companies offer different numbers of policies. Not all companies will allow any changes in the policies they offer. How does car insurance work in an accident? Mentioned below is a detailed account of some of the most important car insurance policies and how they work, if you want to claim your insurance amount in the wake of car accident or damage.
The necessary liability insurance coverage
This insurance policy is available in most of American states. A person is not permitted to drive without this insurance coverage. If you have caused any damage to a property, or have injured person with your car, the company will pay the cost for the damage or the medical bills for the injured party.
The personal injury protection insurance (pip)
This insurance coverage does not only protect you but also the other person sitting in the car, regardless who was driving. This policy covers medical bills and expenses for rehabilitation. It might even cover any special equipment that might be needed like wheel chairs or crutches. This policy provides coverage for the wage you might lose due to being unfit to work in the wake of injuries.
coverage for any type of collision
Collision insurance deals with damages to your car, regardless of the person causing the accident. Collisions with trees, walls or any machinery that results in damage to your car, will be covered. According to some policies, your car will be repaired, or can be replaced if it is in a total wreck. The limit of coverage for replacing a car depends on the finances available.
A comprehensive coverage
This car insurance coverage is for financial protection in a scenario where you are not even driving the car. The coverage will protect you from expenses caused by, bad weather, fires, a sudden flood, heavy objects falling on any part of the car, vandalism, theft or robbery.
It is important to note that if you are not using your car, you can suspend the policy. You should, in advance, state this in the agreement when it is being set out between you and the insurance company.
The uninsured/underinsured motorist insurance coverage
The drivers have to have a liability insurance policy. Sometimes, a driver, who is at fault – for the accident or damage – does not have an insurance coverage or his/her coverage is not enough to compensate you for damages. This insurance handles this type of situation.
How much does a car insurance policy cost?
An estimated car insurance cost for a year, on the average, is about $1,500. That is about a premium of $125 per month. The premium amount depends on what type of policy you have purchased. Also other factors will be taken into consideration by an insurance company before they present you with an offer. Some of the important factors that influence the cost of an insurance policy, include: your age, history of driving, and health-related issues.
It’s a must to have a liability insurance coverage. It’s good to have a PIP and collision insurance coverage and it’s the best when you can afford all five of above-mentioned policies. There are other insurance policies you can get. Which one want to get, it all depends on your needs and financial funds available with you.
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