Categories: Lifestyle

Auto Insurance 101: What Does it Cover?

When looking for car insurance, the most important factor many people consider is the cost. Car owners know that auto insurance is essential, but no one wants to go for high premiums. However, apart from the cost of the insurance cover, there are other essential things you should know about auto insurance. First off, it is illegal to drive a car without auto insurance, and doing so can put you in trouble, especially if you are involved in an accident. You will be sued and fined heavily. These are just two reasons why you must have adequate insurance cover to protect yourself, the car, and your finances.

Image via Shutterstock by Lucian Milasan

Auto Insurance and What it Covers

Liability insurance

Liability insurance covers any damage or injuries that occur when you are at fault. This is required almost everywhere except for a few countries. It helps to pay for medical expenses and property damages to other people.

Personal injury protection

Personal injury protection or PIP covers some medical costs for you and other passengers. However, if you are cleared of any fault, it can cover the loss of wage and funeral costs. Medical costs covered include x-rays and surgeries, including a dental office, nursing services, and hospital bills. It may also help you pay for hearing aids and prosthetic devices. If you feel you are not satisfied by the settlement the auto insurance gives you, ensure you hire an auto accident lawyer.

Underinsured or uninsured motorist coverage

Most countries require drivers to have liability insurance before they can drive. However, you will still find underinsured drivers. This means if they hit your car and you sue them, there is a slim chance of getting paid. An uninsured motorist (UIM ) coverage can help you in such a situation. This cover takes care of medical bills, and it pays out for drivers whose liability insurance is not enough to cover your hospital bills.

Collision and comprehensive insurance coverage

Collision and comprehensive insurance coverage is different from liability insurance. It caters for your car’s damage costs, and it will reimburse you depending on the current value of your car. Here are two situations when this cover comes in handy:

  • It pays if your car flips over and hits an object or crashes with another car.
  • Pays you if the car is stolen or completely destroyed by anything else apart from a car crash. This includes storms, falling objects, and earthquakes, hitting wild animals, floods, vandalism, and explosions.

Gap insurance

Gap insurance is essential when leasing a car. You will be required by the car leasing firm to carry this type of insurance with you. This type of auto insurance comes in handy if the vehicle is crashed. Most companies include the gap insurance in the leasing fee. Gap insurance is also efficient for someone with a car loan. It helps if the car is totaled while you still owe a high amount of the loan. It can help you pay off the loan.

Choose the Best Auto Insurance

These are just a few things you should know about auto insurance. Talk to your insurance company and decide what you should buy. Find the best deal out there, but always make sure it offers you sufficient coverage.

Mayfair Green

Mayfair was born to be a writer, receiving his beloved IBM Selectric typewriter for his 10th birthday and lovingly maintaining and using it since. He loves cars, local events, beer, and travel, sometimes in that order. He currently resides in the UK, living in a lovely bachelor pad overlooking his favorite pub.

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Mayfair Green

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