Some Facts You Should Know Before Purchasing Car Insurance
Most jurisdictions today require that drivers or vehicle owners protect themselves and others against liability claims by purchasing a level of car insurance coverage that will pay at least part of any liability claims. Uninsured motorist insurance is required in some jurisdictions as well. A third major type of vehicle insurance is comprehensive. While comprehensive coverage is rarely required by government, many lien holders and owners choose to cover vehicles with comprehensive insurance.
When you are the responsible party in an automobile accident, you face financial ruin to pay for the hospital, medical and other costs of the other driver. Usually there are minimum coverage amounts, often expressed as the amount paid to a victim by the insurance company. The costs over and above the minimum coverage is the responsibility of the driver found to be at fault in the accident.
There are two numbers important in the coverage levels. The amount paid by the insurance company for a single victim of an accident and the total costs covered in a single accident. If your policy calls for $25,000/$50,000 limits, it means that your carrier would pay up to $25,000 for the single victim of an accident for which you are to blame, and a maximum of $50,000 for ALL victims of a single accident.
There are two major types of liability insurance. The first is personal injury liability. This coverage is intended to cover costs for medical expenses, pain and suffering and job loss or income loss costs. The maximum amounts will vary according to the jurisdiction in which the vehicle is registered and the insurance is purchased.
Another major liability insurance component is that of property damage liability. This part of insurance coverage is to pay the costs of damages to another vehicle or to property caused by the policy holder in an accident. Liability insurance doesn’t cover the holder of the policy for personal or vehicular expenses and damages, only the other driver is eligible.
Comprehensive insurance is the other major type of insurance for vehicles. This type of insurance pays to repair your own vehicle, even if you are responsible for the accident. It is usually required when there is a lien holder on the vehicle. So, if you are making car payments, it is likely that you will be required to carry comprehensive insurance as well as liability insurance.
Some car insurance statutes require purchase of uninsured motorist insurance. If your vehicle or you are injured by another driver who is not insured, this type of policy protects you. Before purchasing insurance, determine the needed coverage level and then search for the best price.
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