Car insurance is coverage for vehicles, specifically automobiles, trucks, motorcycles, or other road-going vehicles. The primary function of car insurance is to offer financial protection against bodily damage or property damage resulting from road accidents and from liability which may also arise out of incidents in an automobile. In addition, car insurance may also be required by some jurisdictions in order to drive a certain type of vehicle or age a specific age. Car insurance can also protect you from the costs incurred in case you get involved in an accident or at fault in an accident. Therefore, car insurance has many functions that serve important purposes.
Car accidents occur frequently on American roads. Unfortunately, this fact is well known to most Americans, especially those who drive large, expensive motor vehicles such as trucks and SUVs. However, it is also known to businesses and industries that employ thousands of people nationwide. For these businesses, the cost of paying for injuries, damages, and medical care of employees who are injured in accidents caused by driving and operating vehicles other than those owned by the business is extremely high.
Comprehensive auto insurance offers a variety of services which are designed to protect against the risk of personal injury and property damage due to automobile accidents. For instance, comprehensive auto insurance offers coverage for damages to a person’s body resulting from an accident involving a motor vehicle and another vehicle. Comprehensive coverage also offers coverage for repair of a vehicle that is damaged in an accident. Comprehensive coverage may pay for the repair or replacement of the vehicle if it has been totally wrecked. It may also pay to repair a vehicle that has been severely damaged in an accident that was caused by the negligence of the owner of the other vehicle. Comprehensive coverage may also pay to replace a vehicle if it is stolen.
Most policies offer a comprehensive coverage policy with a deductible. The deductible is the amount that the consumer must pay out-of-pocket before the insurance company pays the rest. Generally, the higher the deductible, the lower the premium for the total cost of medical expenses, damages, and rehabilitation, if applicable. In some instances, the insurer may pay only a portion of the total expense, leaving the remaining balance to be paid by the insured. Some insurers require the insured to pay the entire deductible up-front and some require a percentage of the monthly premium in advance as a payment schedule.
Another type of insurance policy is liability coverage. Liability coverage provides coverage for injury or property damage caused by the insured during an accident. In most states, liability coverage does not provide coverage for damages to a person’s own body resulting from an accident. It does, however, cover the expenses of treating a person injured in an accident for both physical and mental pain and suffering. Other types of liabilities insurance may also be required by some states, including commercial liability. In general, liability coverage is designed to ensure that the insured does not suffer financial hardship as a result of any property damage or injury that occurred during an insured event.
The commercial vehicle, or commercial auto policy, differs slightly from the liability insurance in that it specifically pays for damage to an insured vehicle that occurs as the result of a collision or accident with another automobile or object. Some states require this type of policy. Other states have a minimal limit on the actual amount paid for the third party’s damages. Also, it may be required that the insured pay for expenses directly associated with the repairs to the insured vehicle and any other damage directly resulting from an accident. In addition to paying for the damages to the vehicle, the insured can also be compensated for travel time and/or loss of income due to inability to work due to illness or injury. Liability insurance typically has a limit on the total compensation paid to the third-party.