There is no doubt about the fact that insurance car prices are high. It is high enough to force some people to think twice before purchasing the vehicle they want. This is because the monthly premiums of insurance policies tend to be quite high as compared to the amount paid in case of the actual damage of the vehicle itself. The high premiums are due to the fact that the insured is taking a greater risk of getting into an accident than the insured. The insurance company will compensate for the loss or damage of the vehicle by making a claim on the policy holder's behalf.
Now, you need to understand what insurance policies pay for. The three basic types of insurance policy are liability insurance, personal injury insurance, and collision coverage. Liability insurance is used mainly in the event you get involved in an accident. It covers the expenses for paying damages to other people or property that were damaged by the insured vehicle.
The next insurance policy is personal injury insurance, which pays off the medical bills of those who get injured in an auto accident. Most personal injury insurance also covers the costs for any other passengers who get injured in the automobile. It is also possible that the coverage provided by liability insurance will cover the repair or replacement of the vehicle that was damaged in the auto accident.
Collision coverage is used primarily when there is a total loss or damage to the insured vehicle due to an accident. In such cases, the insurance company will pay off the total cost of the vehicle, less the policy limits. Policy limits are the amount agreed upon between the insurer and the policy holder. The limits will vary depending on the kind of vehicle insurance policy. There are many factors affecting it including the age of the driver, the location where the automobile is driven, the type of fuel it carries, the frequency of usage, and the age and gender of the policy holders.
Comprehensive coverage is meant to compensate for the losses resulting from damages caused to another person's property as a result of a vehicular accident. It is not limited to automobiles, but applies to all kinds of property such as houses, garages, fences, and cars. It is the responsibility of the persons involved in an automobile accident to bear the liability portion of the claim. If no one can be found to be at fault, comprehensive insurance will cover the rest.
Rental car coverage is an auto insurance policy meant to provide coverage for damage that is done to the rented vehicle during the period of its usage. Usually, the coverage is provided only for the first day of the rental, and then the coverage is expanded if the rental car has been damaged or stolen. Policy limits may apply to liability as well as collision.
Bodily injury is a type of bodily injury not covered by the property insurance. This type of bodily injury is usually referred to as assault, battery, dog bite, defective product liability, hit and run, etc. In some states, the bodily injury must be serious enough to constitute "permanent disfigurement" and should have resulted in a permanent injury that could not be corrected by medical treatments. These states usually require proof of the seriousness of the injury.
Underinsured driver coverage provides financial protection to drivers who are operating vehicles that are not insured. In the event that the vehicle is driven into another vehicle, the underinsured driver's medical expenses and damages will be paid for up to the limits provided under the policy. Some states consider this type of insurance to be a kind of self-policing insurance, since there is a minimum level of coverage required by law and any vehicle that does not have enough insurance may be rejected by insurance companies. However, the underinsured driver may also be liable for legal expenses that arise out of the accident.
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