When you lease or own a vehicle you will be required to have auto insurance. However, what is auto insurance and why do drivers need to have it? How do you know you have good auto insurance and what coverage do you need? These are good questions to be asking yourself when shopping for auto insurance. InsureWise LLC will share why auto insurance is so important and more about the coverage base of a great auto insurance policy.
What is Basic Auto Insurance Coverage?
An auto insurance policy is a contract between the owners and driver of the vehicle with an insurance company. This contact is designed to help protect the driver’s financial loss in the event of an accident or even theft. This protection policy comes with an exchange of a premium payment which will vary depending on some differing factors. Auto insurance provides coverage for the following.
• Property damage or theft of the vehicle.
• Liability which is your legal responsibility to others that received bodily injuries or damaged property during an accident.
• Medical which covers the expense involving medical, rehab, loss of wages and even a funeral.
Basic auto insurance is mandated in most states. However, the law in each state will vary on what auto insurance must cover. Auto insurance can be customized and tailored to fit the policy holder’s budget and or wishes. There are additional coverages that the policy holder may want or find beneficial. Most insurance payments can be paid monthly, in six month segments or one year time frames.
Who is Covered Under My Car Insurance Policy?
An auto insurance policy will cover the vehicle’s owner and additional family members that are added to the policy. Your insurance policy will also cover you and your family members when driver another person’s vehicle with their permission, of course. Your auto insurance will also cover any damage to your vehicle if another person who is not on your policy was driving your vehicle with your consent. Personal auto insurance policy only covers personal driving. If you are using your vehicle for commercial purposes, such as an Uber or pizza driver, your insurance will not cover you. If you use your personal vehicle for commercial purposes, the company that employs you should cover your vehicle while it is be used for the company.
Why is Car Insurance Mandatory?
General auto insurance became mandatory in 1927 in the state of Connecticut. Over time the entire U.S. required auto insurance, excluding Virginia and New Hampshire. Due to the overwhelming number of accidents, the law now requires automobile owners to be financially responsible when damage, injury, or death occurs during an accident. Insurance policies have evolved and now you and other divers and passengers on the road are financially protected.
What are Add Ons in Auto Insurance?
Where the basics or general auto insurance policies cover medical, liability, and damage or theft, there are other additional coverage types. You can add collision, which reimburses you for damage that results in a collision by another vehicle or objects. Comprehensive insurance provides coverage from damage or theft from other hazards such as flood, fire, rock fall, hail, tree damage and even asteroids. Glass coverage is great because this insurance policy will pay for broken windows and windshields which are fairly common.