What is Auto Insurance?
Most of us have it and we define it as a contract between a driver and the insurance company where the driver agrees to pay the premium and the insurance company agrees to pay losses as defined by the policy.
Auto insurance provides property, liability and medical coverage:
- Property coverage pays for situations out of the driver’s control, for instance, wind, theft, hail, vandalism, fire, and collision with an animal. This also covers “at-fault” accidents for your vehicle, if you have full coverage, minus your deductible.
- Liability coverage pays for your legal responsibility to others for their bodily injury or property damage up to the chosen policy limits.
- Medical coverage pays for the cost of treating driver and passenger injuries, rehabilitation and lost wages.
Why do drivers need it?
With Auto insurance drivers can be assured that they and their property are protected from accidents. It is important to choose the right policy. Here’s why:
- If a driver is in an at fault accident or the car is damaged due to covered losses, coverage will provide the funds to fix or replace the vehicle.
- If the driver or any passengers are injured in an accident, coverage can help with expensive medical costs.
- If the driver or the car is responsible for damage or injury to others, the right coverage protects the driver’s wages and assets if sued by the other party.
It is important to know if a policy quotes high enough liability limits that allow the driver to add personal umbrella protection.