Many times, people ignore purchasing insurance coverage when buying a car, viewing auto insurance as one aspect that would increase the financial burden. However, purchasing auto insurance is vital as it greatly reduces the financial burden incurred due to an accident or property damage.
Most of the people have a vague idea about their insurance requirements. According to the law, car insurance must meet certain minimum requirements to be considered valid. The main coverages included in auto insurance are liability coverage, personal injury protection, medical expenses, death benefits, property damage liability, uninsured/underinsured motorist coverage , comprehensive coverage and collision coverage. Each state has different requirements related to these coverages. Understanding these coverages could significantly reduce insurance costs.
Liability insurance coverage is required in most state jurisdictions. Liability insurance provides coverage against injuries caused to the person driving the car. It also provides coverage for people injured and property damaged during the accident. The minimum amount required for liability coverage differs from state to state. However, liability coverage is not required in states like New Hampshire, Tennessee, South Carolina, and Wisconsin.
Certain states require insurance policies that provide protection against personal injury and also cover all medical expenses incurred at the time of treatment. Certain policies are also available that provide financial coverage against any lost wages, if the insured person is injured in an accident. It is always advisable to select a policy that includes a death benefit option, so that in the event of the unforeseen death of the insured person during an accident, the policy provides financial security for the family.
Collision coverage covers any damage to the vehicle that has occurred due to a collision. Comprehensive coverage covers problems such as theft, fire, and damage due to falling objects, missiles, explosions, earthquakes, floods, and riots.