What is car insurance?

Car insurance explained: It is a contract between you and an insurance company to help prevent financial loss if you are involved in an accident. It’s important to have car insurance to be covered from unforeseen events that might happen in the future. It’s an expense that is paid monthly so you don’t have an overwhelming amount to pay out of pocket when an incident does occur.

What exactly does car insurance cover?

Car insurance is very personalized. What one person needs will vary greatly from another. So one person could have completely different car insurance coverage from another on their respective policies.

A consumer must also think about which coverages are required in their state, if they have lienholder requirements, or even what coverages to add for their own personal piece of mind.

Here are Some basic Insurance coverage types that you will find on a typical car insurance policy:

  • liability coverage
  • Uninsured motorist coverage
  • Underinsured motorist coverage
  • Collision coverage
  • Comprehensive coverage
  • Medical payments coverage
  • Personal injury protection insurance
  • Gap insurance

Liability car insurance explained

Liability coverage is also known as third party insurance that helps the insured pay for medical expenses and property damage of the other person if you are found at fault in a car accident.

When a person looks at their insurance policy, their liability limits are broken into what’s known as split limits. For the state of Colorado for instance, a person’s liability limits will be written like this:

25/50/15

The first number, 25 represents $25,000 coverage for bodily injury per person, while the 50 stands for $50,000 per occurrence. The 15 represents $15,000 coverage for property damage.

These liability coverages are usually required in most states.

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Bodily Injury Liability Car Insurance Explained::

When you see a number or dollar amount of coverage on your policy for “bodily injury liability,” this is the amount of coverage that your insurance company will pay out for medical expenses for the other person if you are at fault in an accident.

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Property Damage Liability Car Insurance Explained

When you are at fault in an accident, your property damage liability coverage will pay for the expenses and damages on the other person’s vehicle.

Uninsured Motorist Coverage car insurance explained

Uninsured motorist insurance is the car insurance that covers the expenses of an an accident when another person is found at fault and they do not have insurance. Or, uninsured motorist coverage helps you in the event of a hit-and-run. Underinsured motorist insurance is when the other person’s insurance policy does not have the right amount of coverage to pay the expense of an accident that has occurred.

Medical payments coverage
& Personal Injury Protection Car Insurance
explained

Some states require you to have either medical payments coverage or personal injury protection on your auto policy.

These coverages help pay for medical expenses, doctor’s or hospital bills for you and anyone else involved in the accident, regardless of who was at fault.

Collison Coverage Car Insurance Explained

Collision coverage helps pay for repairs to your vehicle, or even replace it if it’s totaled if your car is damaged from hitting another vehicle or object. This coverage will help you to avoid out of pocket expenses regardless of who is at fault. You will be required to set a deductible.

Comprehensive coverage Car insurance explained

Comprehensive insurance covers damage to your vehicle caused by a fire, theft or vandalism, and other hazards not from collision with a vehicle, such as wind damage, damage from animals, etc. You will need to set a deductible.

Glass coverage car insurance explained

Glass coverage, as it sounds like, will help pay for damage done to your car’s windshield, windows, and any other glass components of your vehicle. Many insurance companies will include this coverage with your comprehensive policy, but always check first to make sure there is no deductible required.

How much car insurance costs?

Car insurance isn’t a set price because it varies depending on a LOT of rating factors.

You are rated on age, gender, credit history, violations, zip code where you live, your vehicle make and model, and year, etc.

It also depends on the insurance company you choose, as some companies rate certain factors differently from another company.

In order to get a good price, it is important to shop around. Call different insurance companies in order to get a quote. Once that quote is given, it’s then up to you to estimate and decide if it best suits you financially.

Can You Get Car Insurance With No Down Payment?
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How does car insurance work?

Car insurance works by having financial coverage over your vehicle. Its starts by figuring out what your state requires, what your circumstances are, and then setting up a policy with any auto insurance company that fits your needs. It all starts by making one call.

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Why is car insurance expensive?

Car insurance have varied prices for each policy you may be encountered with. the prices are minimal to over a big expense if insurance wasn’t provided. it’s in your best interest to involve insurance because it’s there to help you later down the road if an accident where to occur.

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Auto insurance companies

>Progressive
>Advantage Auto/Mendota
>Travelers
>Dairyland
>Sun Coast
>Gainsco
>Bristle West
>the General
>National General
>Falcon
>Assurance
>ASI

Last Updated on by danielle Deshong