Anyone who drives or owns a vehicle should have car insurance. Most states require a driver to have car insurance and to carry proof of that insurance. There are civil penalties for not having car insurance up to and including losing a persons right to drive. Additionally, legitimate car dealers will not allow car buyers to leave their lots without having car insurance in place for the vehicles they have purchased. Many drivers and car owners may think that they can save on their auto expenses by doing without it, but in the long run, attempting to do without coverage can result in far greater financial hardship in the event of an accident or theft of the car; even being under-insured can be a big mistake. Given the importance of having vehicles properly insured, the wise car owner will become knowledgeable regarding specific kinds of coverage. The most popular car insurance coverage options are: Liability: This kind of insurance pays for damages incurred when a driver is at fault. It is categorized into property damage insurance and bodily injury insurance. In general, liability insurance represents the absolute minimum insurance which a driver is required to carry. Collision: This type of car insurance covers the cost of repairing or replacing a vehicle if it is hit or damaged by another vehicle or as the result of a single vehicle accident. Collision insurance will have a deductible, which is an amount of funds which is the responsibility of the person who owns the car. This amount is subtracted from the amount the insurance company pays to the policy holder in the event of an accident or other mishap. For example, if the deductible on a car insurance policy is $500 and the repair cost is $1,000 the car insurance company will pay the policy holder $500. If the repair costs less than $500, the car insurance company will not have to pay the policy-holder anything. People who drive older cars which have little value may want to consider dispensing with collision insurance. However, be aware that not carrying collision insurance means a car insurance company pays nothing in the event the vehicle is damaged, totally destroyed or stolen. No-fault insurance: This type of insurance is meant to cover medical treatments and loss of wages as a direct result of an accident. It is only available in a select number of states and will only pay under certain circumstances. Umbrella insurance: This policy goes above and beyond the typical coverage available to car owners, covering more than just the minimum liability. It may also cover things that traditional liability policies won't. Comprehensive coverage: Similar to an umbrella policy, this coverage also covers more than the traditional policy. However, comprehensive goes one step beyond even the umbrella coverage. It will compensate the driver in the event of fire, flood or other natural disaster, in addition to providing assistance if the vehicle is stolen or vandalized. Car insurance is required in all states, to one extent or another, but drivers are still free to choose to what extent they cover their personal property and health. The wise driver will evaluate his/her requirements before settling for the cheapest and least comprehensive plan available. |
