Auto Insurance Explained

Operating a motor vehicle is a privilege, not a right. Drivers assume a responsibility every time they get behind the wheel. Care must be taken to avoid accidents resulting in personal injury and/or property damage. When accidents do occur, auto insurance can help cover the costs involved. There are two major categories of automobile insurance. One type is liability insurance, which covers costs directed at an at-fault driver. The other is comprehensive and collision insurance. This covers expenses for repairing damage to the driver’s own vehicle.

Overview Of Liability Insurance
If a driver causes an accident resulting in injury to an innocent party, damage to another vehicle or damage to personal property he or she is liable for these costs. Most every state in the country requires drivers of any age to carry liability insurance. Liability coverage is broken into three categories. The first explains the minimum amount of protection a driver needs to purchase in order to cover the costs of injuries to a non-fault individual. The second category concerns the cost associated with injuries to all individuals per accident. The third category explains the minimum amount of protection needed to cover the costs of property damage per accident. If a state requires liability insurance in the amounts of 10/20/10, drivers must carry a policy that will provide $10,000 of protection for a single injury, $20,000 for all injuries per accident and $10,000 to cover property damage.

Collision And Comprehensive Insurance
If a car is being financed the lender will want to have assurance the vehicle can be repaired if damaged. Until the loan is paid off the lender is the legal owner and holds the title. Collision insurance covers damage to the car if the driver causes an accident. Comprehensive insurance covers repairs to the vehicle if the at-fault party is unknown or if the car is damaged by natural causes such as a falling tree limb. Collision and comprehensive car insurance for young people will cost more than the equivalent coverage for older adults. This is because the insurance companies know that a higher rate of accidents resulting in property damage are caused by inexperienced drivers.

Uninsured Motorist Protection
Most insurance agencies and industry experts encourage drivers to purchase uninsured motorist protection. This covers the cost of vehicle damage or personal injury caused by a driver who is not carrying the required liability protection. Some states also have a requirement for personal injury protection. This addition to the policy assures that medical expenses will be paid for regardless of who is at fault in an accident.

Car insurance for young drivers can be costly. Parents of teen drivers may be able to save money by adding the child to an existing policy. The type of car, how frequently it is driven, the location where the car is parked at night and any security or anti-theft equipment installed will factor in to the total cost of insurance.


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