A Break Down of Car Insurance Coverage

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Image source: http://financialtribune.com/

BY JELANI DANIEL

An automobile Insurance coverage is mandatory for a number of reasons including compensation for either driver in an accident, compensation for uncontrollable conditions, as well as general peace of mind for all drivers.

Some advantages of automobile insurance include rates being a motivational factor in safer driving (fewer accidents means lower rates), having an alibi after an accident and the ability to recover money from write-off’s in order to get a new vehicle quickly.

Although insurance is a general term for most drivers, there are different types of auto insurance that target different needs and have additional costs with added benefits.

TYPES OF INSURANCE:

LIABILITY AUTO INSURANCE:

Liability insurance is a mandatory form of coverage which allows other driver’s entitlement to any damages stemming from accidents either while driving or idle that you cause. They are given the benefit of compensation or the right to sue if they are hurt following a claim.

There are two types of liability insurance, one associated with harm to another person’s body or passengers in the car called ‘bodily injury liability’. The other type of liability is associated with damage to another driver’s car called ‘property damage liability’. Both are necessary since one provides compensation for a damaged vehicle and the other ensures the driver and passengers in the damaged car are given the medical attention they need after an accident.

COMPREHENSIVE AUTO INSURANCE:

Comprehensive insurance allows the insured party to recover from damages outside of an accident including vandalism or theft. Such insurance would be offered at an additional cost but would insure you against circumstances that are uncontrollable including floods, wind damage, as well as protecting you against liability from such circumstances. It is important to make sure you are well protected against the elements as well as other drivers, hence why comprehensive insurance is worth the additional cost.

COLLISION BASED COVERAGE:

Collision insurance is useful for major collisions with either an object (body damage) or a car. It gives the driver the chance to be financially compensated for any damages that may occur as well as giving the driver enough compensation during a write off to purchase a new vehicle quickly. Although collision insurance is extremely useful, it is the most expensive component of all three insurances.

Overall, car insurance is not as complicated as it seems. By using liability insurance with either comprehensive and/or collision coverage, you have the option to be fully prepared for any type of accident or uncontrollable circumstance.

Being insured can be expensive but the headaches it prevents is worth the money!

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