The Most Common Types of Auto Insurance Coverage

Auto insurance is basically a contract between you and your insurance company which protect you financially in case of theft or accident. In return for your paying a regular premium, the insurer agreed to cover your claims as set out in your insurance policy. In case of an auto accident, your auto insurance will cover the repair or replacement of your car. It will also pay for any medical bills resulting from the auto accident as well as your rental car. In some states, auto insurance will also cover you if you are at fault in an accident and the underinsured or uninsured motorist is at fault.

Most states require that you carry enough coverage to ensure you’re covered in case of an accident. But there are times when you don’t have enough coverage and this is when you are sued. So how much coverage do you need? The amount of insurance coverage you’re required to carry will usually depend on your age, gender, driving record and the type of car you drive. For example, a person who drives an imported sports car won’t be required to carry as much coverage as someone who drives a reliable four-door family car.

Car accidents occur for a number of reasons. Sometimes it’s just unavoidable that some damage occurs; other times people are injured when they shouldn’t have been. But no matter what the cause of the accident, insurance companies see it as a chance to earn a profit. They want to pay as little as possible for the medical expenses and damages caused by the auto accident so they’ll settle for a low amount.

In most states, bodily injury liability is covered by your auto insurance coverage. This is the part that covers costs associated with personal injuries that happen to other drivers, passengers or pedestrians in your vehicle. Bodily injury liability covers such things as personal injuries, property damage caused by an auto accident, death or disease caused by a car accident, and mental injuries (such as stress from a traumatic event). A comprehensive part of your policy will cover damage resulting from theft, vandalism, malicious mischief, and intentional tort. Generally, your auto insurance coverage will also cover you in the case of libel, slander, malicious prosecution and eviction, among other things.

Another aspect of motorist coverage that can be quite important is medical bills. If you’re paying for the medical bills of a driver who is seriously injured in an auto accident, this is another expense that is likely going to get added to the cost of your monthly auto insurance premium. Medical bills are only covered if the other driver is found at fault for the accident.

Finally, you need to understand your bodily injury and motorist limits. Each state has a minimum amount of bodily injury that a driver is allowed to claim in a liability settlement. If you exceed that minimum amount, your insurance premiums will go up. Similarly, each state has a minimum amount of bodily injury that a driver is allowed to claim in an accident, but these limits are typically very low compared to the national minimums.

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