Car insurance protects you against financial loss when you have a car accident.
Car insurance is a contract that you have entered into with an auto insurance company. As long as you pay your bill, the company will pay out based on the policy coverages.
Every state has different auto insurance requirements. An auto insurance policy consists of six different kinds of coverage.
Some states will require you buy some of these coverages, but not all of them.
It is important that you are aware of these coverages before purchasing your car insurance.
You will need to meet the state minimum requirements when you purchase your policy, and then you may add optional coverages as you believe necessary for your driving experience.
Most policies are either for one month, six months, or one year.
It is illegal to drive a motor vehicle in most states without auto insurance.
If a law enforcement officer asks for proof of insurance, and you don’t have insurance, a traffic ticket may be issued to the driver.
In some states this can mean that points will be assessed against your license.
If too many points accrue, you may have your license suspended.
In some states they will simply suspend your license.
Some states will have all of the above take place and you will have your car impounded and your tag removed. This means that the penalty can be quite expensive for not having coverage.
Most states require that you have at least liability coverage.
Liability is your legal responsibility to others.
There are two basic types of liability coverage for auto insurance and they are bodily injury and property damage.
If you are at fault in an accident, bodily injury pays the person you hit, and property damage pays to repair their vehicle or property.
States require this to ensure that their citizens utilizing the roads and highways are protected in case you hit them. Some states, like Missouri and Kansas, require that you purchase uninsured motorist coverage as well.
This is to ensure that if someone hits you, who does not have insurance, you will be protected.
This is necessary because so many people attempt to skirt the law, and to drive without insurance, that you need to have added protections. Sometimes a driver will hit and run.
If you are not able to locate them, you can claim on your uninsured motorist policy. Sometimes someone will hit you who is underinsured. If so, you may be able to claim on your uninsured motorist coverage to be made whole again.
If you purchased a new car, or a car that you want to protect in case it is damaged, then you will need to purchase comprehensive and collision coverage.
Collision coverage covers damage to your car caused by impact with a car or thing.
Comprehensive coverage is coverage for something other than collision damages your car.
Examples of when this coverage would apply include theft, or hail.
If you have a lienholder, the company will ask you to purchase comprehensive and collision coverage. They will most likely ask that you have them added as a lienholder. It is important to communicate this to your local insurance agent so that they can add them.
Usually medical coverage is an optional coverage you will want to purchase. Medical coverage pays for treatment of injuries and rehab. Medical coverage pays if anyone in your vehicle is injured in an accident.
Have any questions, give us a call so that we can help.