Car Insurance Policy Information
- According to the Insurance Information Institute, there are six basic forms of coverage that can be combined in an auto policy. These common coverages are collision, comprehensive, bodily injury, liability, uninsured/underinsured motorists and medical payments. By purchasing car insurance, individuals transfer the responsibility of paying for damages to the insured vehicles to their insurers. All claims made against the policy owners for damages caused by their cars are also paid by the insurance companies up to the policies' coverage limits.
- In 49 states it is against the law for cars to be driven without insurance coverage. Only New Hampshire doesn't have this requirement. Every other state sets its own liability coverage amounts that cars in their jurisdictions must have. Liability coverage pays for damages caused to cars and properties not owned by the policy owners, and also pays the medical expenses for injured parties up to the policies' coverage limits.
- Car insurance policies come with several features that help policy owners when they are having car problems. If the insured vehicles break down, car owners can prevent being stuck on the side of highways or roads by adding roadside assistance. If the cars are out of commission for extended periods of time, rental reimbursement covers car rentals until the vehicle is fixed. Policy owners can also add gap coverage, which pays off the remaining amounts owed to lenders if their cars are deemed totaled by their insurers.
- Insurance companies cover vehicles in exchange for premiums paid by the policy owners. Coverage is granted to applicants after insurers evaluate their information submitted on insurance applications. Some of the factors insurers consider include the applicants' ages, genders, locations, driving records and their cars' makes and models. These factors determine the level of risks of the applicants and those that rate a higher risk will have to pay increased rates. However, policy owners can lower their premium amounts by taking on more of the insurance costs out of pocket by increasing their deductibles.
