Car insurance is when we protect our cars from possible damage from an accident or theft or any other threat. If anything happens to our car, the insurance company provides the replacement or repair amount to the policyholder. Car insurance is sometimes mandatory and sometimes not. There are many extensions to car insurance too. Now you must be having a lot of questions in your mind like e.g. what kind of coverage, how much it is beneficial? And what will be the cost? Etc. Well, a smart and responsible customer will always look for the answers to these questions.
Let’s find out.
What is the Definition of Car Insurance?
Car insurance is purchased by a car owner with the motive of protecting himself from paying for damages to his car. It also protects him from the cost of legal defenses in case a third party gets injured through his car. It also means in any case if his car meets with an accident or gets stolen, damaged by fire, etc. then insurance will meet the monetary harms.
E.g. If by mistake you hit the person on the road from your insured car. The insurance company will pay the hospital bill for that person. The person may sue you for his bodily injury. Car insurance will protect you against such legal actions by paying medical bills.
To go in detail, the Insurance company has criteria set under which they decide the premium prices for the vehicle. There are many factors that a company keeps in mind while deciding the premium prices e.g. car model, body type, engine size, fuel type, age, credit score, Insured declared value (IDV), etc. If you want a policy, then the major car insurance companies in the USA are StateFarm, Geico, etc.
What are the Types of Car Insurance?
#1: Comprehensive Insurance
Comprehensive insurance is optional but also the most purchased insurance because most car owners add this coverage in their policy. It protects from damages other than collision e.g. damage from theft, fire, explosion, vandalism, falling of rocks and trees, etc. It also protects from damage from weather conditions like flood, earthquake, tornadoes, windstorms, etc. Your car will be replaced or repaired if any such condition causes damage to your car.
#2 Personal Injury Protection (PIP) insurance
Personal injury protection insurance is optional in some states and in some states it is mandatory. Hence, this insurance is an extension of car insurance. This covers the medical expenses of the injured policyholder(you) and passengers who were associated with the car accident. It also covers other expenses like funeral costs, lost wages, etc. This coverage is also called “no-fault insurance” because insurance will pay the medical bill regardless of who caused the accidents.
#3Medical payments insurance
This coverage is also an extension in your car insurance policy, hence it’s optional. It is also called “Medpay”. This insurance gives you coverage on medical expenses for policyholders and passengers who were in the car at the time of the accident. Even when you or anyone of your family members are walking on the road and meet with an accident. Then also, insurance will pay medical bills.
#4 Liability insurance
Liability insurance is necessary for you as well as under law. This insurance protects you from two types of liability: bodily injury liability, and property damage liability. For instance, if by mistake you hit someone from the car and the person gets injured. Then you are liable to pay his medical bills. Also, if mistakenly someone’s property is damaged by your car then again you are liable to pay for property damage.
There are many other types of car insurance like uninsured and underinsured insurance, collision insurance, gap insurance, ride-sharing insurance, towing and labor insurance, and many more.
What is the Importance of car insurance?
#1 Peace of mind
Cars are expensive and maintaining it is also expensive. It protects you from any unpredictable events. Like, your car gets hit due to other’s negligence. Or natural calamity damages it or it is stolen, etc. But you don’t have to worry to pay for such damages from your pockets when you have insurance to pay for you. Having this insurance can make you enjoy your ride with a free mind.
#2 No more liabilities
Everyone makes mistakes. If you mistakenly injure someone by your car or damage someone’s property. Then the insurance policy will cover you against the legal consequences of the accident you did.
#3 Becomes coverage for you and family
Car insurance not only protects policyholders but also the passenger in the car, other family members, and drivers. Anywhere and anytime during the journey on the road if your car meets with an accident irrespective it’s your fault or not, insurance will protect you. It will bear all the medical expenses and other expenses and also repair the damage to the car.
#4 No negotiation in claiming
Choosing the right car insurance will save you, your time, and your struggle. How? For instance, if another car damages your car in an accident. Then the other party is answerable. When you negotiate with such people for the cost of repairing or replacing your vehicle, then such negotiation becomes a headache. That’s where insurance works. It will save from such a struggle and will manage the further process to give you the best protection.
#5 Some extra benefits
In your car insurance policy, you have many extra add-ons to protect you from damages. Extra coverage/add-ons include zero depreciation, roadside assistance, return to invoice, engine Protection, etc.
Many people dream to have a new car, some are passionate about cars and some buy to fulfill needs. In both cases, the safety of you and your car is important. The auto parts of a car can get damaged anytime. However, you can prepare for such damages in advance. Car insurance keeps things are under your control.
Accidents, natural calamities, theft, vandalism, fire, etc. these uncertain events lead to body injuries or property damages. When such events take place you go through mental trauma as it gives the pressure of managing the financial situation. No one has the power to stop these events but one power can protect you from tough times of experiencing money problems. That is the power of car insurance. Always think about your security and family’s security and trust the process of car insurance.
We hope this article was informative and it helped you gain an understanding of the topic. If you want any clarifications, please reach us through the comment box below. Thank You!