The Basics Of Car Insurance Policies

Car insurance is the contract you sign with the insurance company that protects you from financial loss if an accident or theft occurs. The insurance company will pay for the losses included in your policy in exchange for your paying premium. Most of the policies cover you or another driver using your car at the moment of the accident. 

While some auto insurance requirements are mandatory, others are optional, and you can only add them for your benefit. Here's a breakdown of both required and optional car insurance policies you can consider.

1. Mandatory Coverage

These are the basic car insurance requirements that almost every state requires car owners to have. They include the following:

Bodily Injury Liability – This coverage protects you if you drive and cause an accident where the victim is injured or killed. If someone else was driving your car at the time of the accident, then they're equally covered with your car's policy. However, that's not all; you can use the coverage to pay for your legal fees if you're presented to the court to answer an accident charge. 

Property Damage Liability – Sometimes, it's inevitable that you swerve and end up hitting someone else's car or other people's property. When such a thing happens and you're found at fault, the property damage liability coverage will help you pay for repairs of the car and property you damaged. The common properties considered include someone else's car, utility pole, buildings, garage doors, etc.

Personal Injury Protection – PIP, also known as no-fault insurance, is one of the most frequently sought-after insurance coverage. It covers all medical expenses you incur to cater to personal injuries and those of your passengers. It's also used to cover funeral costs and lost wages as a result of the car accident.

2. Optional Coverage

The mandatory insurance coverage only works for the damage you inflict on other people's cars. To ensure your car against these damages, you need to take the following optional auto insurance coverage.

Collision – With this coverage, you receive reimbursement when you collide with another car or object like a tree or building, causing damages. If you're leasing or seeking finances using your car, the lender will ask for collision coverage.

Glass Coverage – Your car's glass, including the windshield, back, and side windows, are significantly important and need to be covered from damage. A glass coverage helps you pay for repairing your windshield or any other glass in your car. Your glass specialist will help you determine whether to replace or buy a new windshield.

Comprehensive – Is also known as other than collision insurance. When theft and general damage occur, you'll need a comprehensive insurance policy to take care of the loss and damages. The type of damage covered by this insurance policy is always non-collision related, thus the name 'other than collision.' 

Contact an auto insurance company for more information.