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Car Insurance Coverage, Amount, types and Requirements


We will discuss the important things people need to keep in mind while buying car insurance for the first time.

Car Insurance basics requirements , coverage , amount and different types of car insurance, we will go through these details thoroughly.

I assured you that after going through this article , much of your queries would be resolved.


Parts Of Car Insurance 

Car insurance has got two parts. One is the third party liability. The third party insurance is compulsory in India.

car insurance

Second part is the own damage part or the damage to one’s own car .

When you buy both of insurance coverage, it is then called comprehensive  policy or a package policy .

Irrespective of the age of the car, liability policy or third party policy is compulsory .

This policy is taken for any damage to any third person’s property or injury or death of a third person.

On your behalf, compensation is paid to the third party by the insurance company.

The compensation amount is settled through the court of law.

If we are driving the vehicle, or it is being driven by our acquaintances or us, but with a valid licence and it meets with an accident, the damage is covered by it Insurance company provides the claim after deducting depreciation of the car depending on the age of the car.

For a new car one should take a package policy In the initial years, the depreciation is quite low .

There is not much difference among various auto insurance policies offered.

The difference in premium could at best be of a few hundred rupees.

Most of the policies seem to have the same features.

Insurance companies have now started offering zero depreciation or zero policies .

In these policies, they will not deduct any depreciation since it is the depreciation that hurts the most.

As a result, the premium will be slightly higher. But in case of damage to your car, the extra premium will be more than compensated .


Types of car insurance

I’m going to be telling you about the 5 different types of auto insurance coverage so you can know exactly what you’re getting into when you go to get anew auto insurance policy.

What car insurance covers

So you’re ready to select auto insurance for your car.

Where do you start? It’s a good idea to learn about your options.

Here are some of the different types of coverage you may include in your policy.

Let’s start with auto liability,which is required by law in most states.

If someone gets hurt in an accident you caused, bodily injury liability coverage helps pay for your legal fees if you are sued as well as the injured person’s medical bills and lost wages.

If you damage another person’s property with your vehicle, property damage liability coverage may help reimburse the other party for repairs or replacement.

Next, let’s look at coverage that helps pay your medical expenses if you’re hurt in a car accident.

Depending on the state where you live, you may have the option of purchasing either personal injury protection or medical payments coverage.

These may help pay doctor or hospital bills after a covered accident.

Another type is Uninsured and UNDER insured motorist coverage.

If you’re hit by a driver who doesn’t have car insurance, UN insured motorist coverage helps pay for your medical bills and depending on where you live, repairs to your property,after the accident.

UNDER insured motorist coverage works similarly.

It helps pay your medical expenses if you’re hit by a driver whose liability coverage limits aren’t sufficient to pay for your bills after the accident.

And then there are coverage that help if your car is damaged.

Let’s say you need to replace or repair your vehicle after a collision with another car or object.

Collision coverage helps pay those costs.

What if your car was damaged by something other than an accident?

Comprehensive coverage helps pay to repair or replace your car if it’s damaged by things like theft, animals, falling objects or fire.

Finally, it’s important to-remember that each type of car insurance coverage has a limit, which is the maximum amount your insurer will pay for a covered claim.

And, some overages have a deductible, which is the amount of money you pay out of pocket toward a covered claim.

Have questions? Reach out to your agent to learn more about what types of coverage may be best for you


Collision coverage

Now let’s get into it the first type of car insurance is collision coverage.

car insurance

if you want to make sure that the insurance company is going to pay for the damage done to your car you definitely want collision coverage .

So collision coverage encompasses car accidents or if you happen to hit like a tree or a guardrail or something else and damage is done to your vehicle .

if your car has more damage than it’s actually worth like if your car is worth $5,000 but you have $7,000 worth of damage they will deem it totaled and then they’ll pay for you to get a new car .

They’ll give you a check for the current value of the car so you’ll get $5,000 check which you can use to buy yourself .

If you’re shopping for auto insurance, you may consider collision coverage.

But, do you know what it protects? Collision coverage helps pay to repair or replace your vehicle if it’s damaged or destroyed in an accident with another car, regardless of who is at fault.

That’s different from liability coverage,which helps pay for damage to another person’s car from an accident you cause.

After an accident, you are responsible for paying a specified dollar amount toward repairing your own car.

That’s called a deductible, and for collision coverage, it can vary.

Once you’ve paid your deductible, your collision coverage will help pay to repair or replace your vehicle, up to its actual cash value.

If you owe money on your car loan, or lease your vehicle, you are typically required by law to have collision coverage.

But, if you own your car outright, it’s optional. You may be thinking: If collision coverage is optional, why buy it?

Consider this: If you get into an accident involving another car or object, would you want to pay out of pocket to repair your car– or even to replace it?

If not, then collision coverage may be a good choice.

So, now you know that collision coverage can help pay for damages to your car after an accident involving another vehicle, regardless of fault.

After you’ve paid your deductible, collision coverage helps pay to repair or replace your vehicle up to its actual cash value.

Collision coverage is typically required if you owe money on your auto loan or if you lease your vehicle, but if your car is paid off, it’s optional.

Have any questions? Contact your Agent today .


Auto liability insurance

Something new the next type of insurance is liability insurance .

Now this is the most basic type of insurance and a lot of US states require that you have it.

This is what protects other drivers on the road and covers property and medical bills.

if the accident that you got into was your fault it’s important to note that if you are the one who is at fault , you are required to pay for the damages .

Even if it exceeds your coverage because of that it can be kind of nice to purchase higher liability insurance. so that you’re protected.

Let’s talk more  about liability coverage. Basically, liability coverage is a part of your car insurance policy, and helps pay for the other driver’s expenses if you cause a car accident.

It does not, however, cover your own. It’s important to note there are two types of liability coverage: bodily injury and property damage.

Bodily injury liability helps pay for the other driver’s medical bills, lost income, and emergency aid if they’re hurt in the car accident and you’re at fault.

While property damage liability helps pay for repairs if you damage someone else’s property, like their fence or car.

Liability coverage is required by law in most states and is subject to limits, which is the maximum amount your insurer will pay.

A car accident can be expensive. It’s a good idea to make sure you have enough coverage to help protect yourself.


Car insurance full coverage

Next up we have comprehensive coverage. this is for damages that are not related to auto accidents .

car insurance

For example natural disasters or theft this type of insurance is more costly than the others.

But if you purchase anti-theft devices or tracking devices that can actually lower your rates .

So if a tree hits your car or if someone breaks into it you know you’ll be covered .if you have comprehensive coverage

Comprehensive coverage helps pay to repair or replace your car if it’s stolen or damaged by something other than a collision.

Comprehensive typically helps cover theft and damage from vandalism, natural disasters, falling objects, fire, hail, flood, or animals.

If you lease or finance your vehicle, your lender may require you to carry comprehensive coverage until your loan is paid off.

If you own your vehicle outright, comprehensive coverage is optional on your car insurance policy.

So, why consider comprehensive coverage? Well, could you afford to repair your car if it were damaged in a hailstorm?

Or, what if you hit a deer?  In these types of situations,comprehensive coverage may help pay for costly repairs, up to your coverage limit.

The limit is the maximum amount your insurer will pay for a covered claim.

The limit for comprehensive coverage is typically the depreciated value (or, the “actual cash value”) of your vehicle.

Say your car is stolen or totaled in a covered claim. Your insurer would cut you a check for the car’s actual cash value.

If you wanted to replace your totaled car with a new vehicle that cost more than your insurance reimbursement, you would have to pay the balance out of your own pocket.

Another key thing to know about comprehensive coverage is that it has a deductible.

A deductible is the amount you pay toward a covered claim.

You choose your deductible — for example, $500 — when you buy comprehensive coverage.

Now you have a little more information on the benefits of comprehensive coverage and how it works.


Under Insured Motorist Insurance

Next up we have uninsured or under insured motorist insurance now this is helpful if you get into an accident with a person who doesn’t have insurance altogether or maybe they do have insurance but it’s a very low low insurance plan. so even though an accident might be their responsibility .

car insurance

Like they may be responsible for covering the damages if they don’t have the coverage required for all the repairs then it’ll fall on your shoulders .this is never really mandatory insurance coverage plan .

But if you just ought to make sure you’re fully protected it’s worth looking into .

Personal Injury Protection

Finally we’re talking about personal injury protection.

So this insurance plan covers medical bills for you and other people involved .

One thing to note is that it’s not available in all states .

So if you get into an accident that wasn’t your fault and you are required to pay for the medical bills for you and whoever else was in your car.

if you’re ever afraid that you may not be able to pay for those bills you should definitely talk to your insurance provider about this type of coverage just to make sure that you have all corners covered.

There are a lot of different things that go into finding out which auto insurance coverage is going to be best for you .

Car insurance full coverage

What is “full coverage” car insurance?

When people use that term, they often mean a combination of coverage  but “full coverage” doesn’t actually exist.

A car insurance policy offers plenty of options to help protect you and your car.

Let’s talk about a few. Cause an accident? Auto liability coverage helps pay the other driver’s medical expenses or repair bills.

Keep in mind that your liability coverage won’t pay for your own bills after an accident.

Say your car needs repairs after a wreck. Collision coverage helps pay to repair or replace your vehicle.

Or, maybe your car is damaged, but not from collision.

If your car is stolen or if something falls on it, that’s where comprehensive coverage comes in.

Suppose your car is in the shop after a covered-claim.

Rental reimbursement coverage helps pay fora rental car while yours is being repaired.

What if you or your passengers are injured in a car accident?

Medical payments coverage or personal injury-protection help pay your medical bills.

Uh-oh! An uninsured driver injured you or damaged-your vehicle?

Uninsured motorist coverage may help with-your expenses. These are some of the common car insurance coverage you may want to consider adding to your policy.

Remember, each coverage has a limit, and some coverage have a deductible. Ready to start exploring your options? Contact an Allstate agent today.


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