If you own a vehicle, you are most likely required to have auto insurance. Contrary to popular belief, auto insurance is not required in all states. However, most states have laws that make it illegal to operate a vehicle that is not insured. Understanding your auto insurance plan is important because you want to have the right kind of insurance should the worst happen. The following points represent a general overview of auto insurance plans and features.
Liability Insurance
This is the minimum insurance that drivers can get. It is required in states that have laws regarding insuring vehicles. Liability insurance protects all drivers on the roadway. It will pay for vehicle and property damage caused by the insured driver and cover medical expenses for others. An insured at-fault driver needs to understand that liability coverage will not cover the cost of their damages. This coverage is designed to protect others and can ensure that at-fault drivers have a means of paying for damages.
Collision Insurance
If a driver has a collision with another vehicle, both vehicles will likely get damaged. Collision insurance will cover the cost of repairs and replacements. Unlike liability insurance, the damages to the at-fault driver's vehicle and any other vehicles involved will be covered. This type of insurance is also beneficial if objects or structures such as utility poles or buildings are struck. Vehicles that have a lien on them or are being financed may have to have collision insurance as part of the agreement.
Comprehensive Insurance
This type of coverage is beneficial in the event of unexpected circumstances that are not related to a collision. Common events are things like a tree branch falling on a vehicle, floodings, and storm damages. Intentional acts committed by others such as vandalism are also covered by comprehensive coverage. It is possible to have comprehensive insurance in combination with a liability or collision insurance policy
Uninsured Motorist Insurance
Despite the legal ramifications, there are many uninsured drivers on the roadways each day. This type of insurance protects drivers who may have a collision with at-fault uninsured motorists. The average uninsured person likely will not have the resources to pay out-of-pocket for damages they cause on a collision. This is a layer of protection for those who could be impacted by their negligence.
An auto insurance broker is a good resource to use to understand more about auto insurance plans. They can offer additional insight regarding auto insurance add-ons and insurance bundles.
