Understanding The Basic Principles Of Auto Insurance
Buying auto insurance is a lot simpler if you understand how it works. If you do not understand how it works, you might feel confused and have many questions. If you currently need to buy an auto insurance plan, here are some basic details and principles of auto insurance. Learning these things might help you know what coverage types to buy when talking to an agent.
How Liability Coverage Works
The first thing to know is how liability coverage works. Liability coverage is the most basic form of auto insurance you can purchase. It does not directly protect you if you damage your car, but it protects others that experience damage from accidents you cause. While liability does not directly protect you, it does offer more indirect protections. When you cause an accident, the other party cannot sue you personally if you have liability coverage. Therefore, liability insurance protects you from lawsuits after you cause an accident.
The Basic Principles of Collision and Comprehensive Coverage
The next thing to know is about collision and comprehensive coverages. These two types protect you directly if you experience damages to your car, and agents often refer to them as full-coverage insurance products. If you cause an accident, your collision coverage compensates you for your damages. If you experience damage from an animal collision, theft, or a storm, your comprehensive coverage protects you. Having these coverages is vital if your car is valuable.
How Underinsured and Uninsured Motorist Protects You
You might also want to learn about uninsured and underinsured motorist coverages. These types are essential to have with your policy as they protect you if an uninsured or underinsured driver collides with your car. When you have this kind of coverage, you can file a claim with your insurance company if you encounter damages from a driver who does not have insurance or does not have enough auto insurance.
The Effects of Your Deductible
The final term to understand is deductible. A deductible is something you have with collision and comprehensive coverages. It refers to the amount of money you pay after an accident that is required before your insurance company pays the rest of the bill. Many people have a $500 or $1,000 deductible.
If you can understand these terms, you may have a better understanding of how auto insurance works. If you are ready to contact an agent to get a policy, contact an auto insurance coverage provider for more information.