Auto Insurance - Knowing What a Basic Policy Covers
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Generally speaking you buy auto insurance in six areas. You pay each sector separately. Thus the total cost of your insurance premium is determined by the amount of cover you purchase.
1) Injury Insurance
This is very basic. It covers the costs if you injure somebody else with your car. Accidents can cause somebody to sue you for a lot of money. This cover covers that. It also covers you if you are driving somebody else’s car. This type is mandatory in most States, and you will need to buy insurance to a certain level to be legal. A good tip is to take more of this kind of insurance than your State stipulates. Thus you will be covered in case the worst happens.
2) Property Damage
Is also pretty basic. This pays for the damage you or somebody else driving your car (with your permission) may cause to somebody else’s property. By other property we mean other cars or motor vehicles, motor cycles, bicycles etc. However, in the event of an accident for which you are held to be at fault you will also be responsible to pay for things like lamp posts, fences, house, mobile homes etc. This cover protects you from the possibility of having to spend all your savings and then even more by way of debt. You really need to have insurance protection in this department. Essentially the two varieties mentioned here are the basic insurance cover required by most states in the US. For instance the State of New Hampshire does not require drivers to be covered by liability insurance. The State of Virginia on the other hand charges drivers an annual fee of $500 if they elect to drive without liability insurance. These are the exceptions, so you must check out what is required in your State locally. A good place to ask would be the State Motor Vehicle Department.
3) Your Car
The law insists you carry insurance cover to protect third parties. However, you do not need to carry protection for your own car. If you drive an old vehicle, you can possibly afford to write it off in the event of an accident that is proven to be your fault. If it is the fault of the other person you will be covered by their insurance. However, if you have a new car you will find that the Loan Company will insist you have full comprehensive insurance cover in the event of an accident.
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