Auto insurance is your safety net if anything happens while you are on the road. It is morbid to think about accidents, but you don’t know just what might happen every time you drive your car. Your insurance protects you from the financial fallout of traffic collisions and other accidents and from the liabilities of any physical damage that you might inflict to other people or vehicles.
In most places, auto insurance is mandatory before you will be allowed to register your vehicle. This makes sure that all vehicles that are legally plying the streets carry insurance with them.
Auto insurance works by giving both the insurance company and the insured party benefits. The insurance company covers the amount needed by the insured party that filed a valid claim in case of an accident. This way, a vehicle owner does not need to pay for the expenses from his own pocket.
For his part, the vehicle owner pays the insurance company a premium an amount agreed to by the insurance company and the vehicle owner to avail of the services of the insurance company. The insurance company will keep the premium even if the vehicle owner will not file a claim during the duration of the insurance contract. This way, the insurance company earns when no valid claim is filed.
Depending on the type of insurance that you have, can avail coverage of some or all of the following with different benefits for each one.
- Personal coverage for medical payments which covers the hospitalization of the insured vehicle owner
- Physical damage to your car which cover the cost of repair from the damage suffered in an accident
- Physical damage and bodily injury to third party which means the insurance company will also cover the medical payments of other people aside from the insured party and the repair of their vehicles
- Fire and theft insurance
- Some insurance forms offer coverage to persons riding in the insured vehicle
Insurance coverage varies depending on the preference of the vehicle owner. It is up to you to make sure that you only get the best insurance for you and your car so that you are fully covered in case something bad happens.
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