What does car insurance cover?

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Car insurance protects you and keeps your car protected from the costs you would incur by damaging other people’s property with your vehicle, hurting someone, or even damages caused within your personal vehicle. When you purchase a car insurance policy, you are at liberty to choose the amounts and types of coverage you want. Car insurance covers different situations in which you would be liable, for instance, medical expenses or repair bills. Depending on the policy, it covers you, passengers in your car, and any third party whose car might have been damaged. This article helps you to understand the main components included in a car insurance policy, including personal injury protection that allows you and the people in your car, collision coverage for damage to your vehicle in the case of an accident, liability coverage- both for property damage and bodily injury, theft, vandalism and any other type of damage that could happen to your car when not in use. It is essential to look at car insurance reviews to help you select a reputable company to purchase your policy.

Here are the essential components of what’s referred to as a full coverage car insurance policy.

  1. Collision and comprehensive car insurance
    These two go together in covering damage to your own vehicle. Although the two types of coverage might not be required by law, once you loan or lease your car, comprehensive and collision insurance become mandatory. Comprehensive coverage is usually is purchased together with collision insurance. This type of insurance covers the damages that may happen to your car, excluding collision. This includes the events that cause damage to your vehicle and are beyond human control, for instance, riots, extreme weather conditions, animal damage, falling objects, and fire, just to mention but a few. This insurance also pays for your vehicle if stolen.
    On the other hand, Collision insurance differs from the comprehensive as the former covers damage to your car caused by a collision regardless of who was at fault. The insurance pays for accidental damage or loss to your insured vehicle, whether the damage only involved your car, such as hitting a tree or whether another vehicle was involved.
  2. Personal injury protection
    This helps to cover you and any passengers in your car in case of an accident. This policy may pay for costs associated with lost wages caused by being out of work, both medical and funeral expenses, in the event of death. Some of the medical costs covered by personal injury protection may include; x-rays, minor and major surgeries, bills from dental services, nursing services and bills from the hospital, and hearing aids and prosthetic devices. Personal injury protection is required where drivers get compensation for injuries after an accident through their own car insurance company instead of through the at-fault party’s car insurance company.
  3. Liability insurance
    It is required that all drivers have a car insurance policy for bodily injury liability and property damage liability coverage in every state. These are the two major types of coverage that would pay for another driver’s injury or damage caused to their vehicles if they are at fault in an accident.
    Medical bills could be expensive as one can’t predict how bad a person’s injury would be. Thus if you if it would be impossible to afford a high medical bill, then you’d want to set a high liability as you may not realize how much damage your car can do to someone’s property until you get the repair bill.
    With this liability insurance coverage, the injured party would file a claim with your car insurance provider, who would work with the injured person to ensure damages are paid.
  4. Gap insurance
    Gap insurance is usually added as an extra cost to your base car insurance policy. You may have it in your car insurance policy if you lease your vehicle, or you can buy it with a car loan. Let’s say you’ve loaned or leased your car; that means you may owe more money on that car such that it would exceed its worth. In that case, the car’s actual cash value may not be enough to pay off the payments you owe. Gap insurance comes in to pay out the difference in the real car’s cash value and the money you still owe on the loan or lease. Your insurance provider will pay out if your vehicle is totally damaged after an accident or theft, but they would deduct the amount by which the car has depreciated before paying you the actual cash value of the vehicle.
  5. Uninsured motorist coverage.
    This comes to effect in situations where you’re involved in an accident with an uninsured driver. Uninsured motorist coverage helps pay out the difference that remains after the payment that the other party can pay. It pays both for bodily injury and property damage. The insurance would also cover damages or losses caused by the driver of a borrowed car or a stolen one.

In conclusion  above are essential insights on car insurance