Tips For How The 3 Types Of Car Insurance Work

October 27, 2016 · Posted in General Articles on Car Insurance 

So how does car insurance specifically work? Well first, you need to figure out the fundamental types of car insurance and what they cover in relation to specific types of accident. There is liability coverage, personal property coverage, and personal injury coverage. Every insurance has a different coverage and specializes in different areas of concern. Here is how each car insurance policies work.

Liability car insurance, also known as third party liability, extends protection to the other party and corresponding property involved in the accident. It also covers any medical concern raised by the third party. Briefly stated, liability insurance only protects you from paying damages to other people and their property, but you pay for the damages to your own car.

Liability car insurance also is the cheapest form of car insurance. So if you are on a tight budget, or have a vehicle that is out dated, you may want to choose this type of car insurance. Many states will allow you to have liability only, but some states make it mandatory for you to be covered 100 percent. Please check with your state for more information.

Property car insurance coverage is also referred to as comprehensive and collision. Comprehensive coverage shoulders any damage expenses that may arise from other uncontrollable factors aside from accidents, such as hail, theft etc. Collision coverage, as the name implies, protects you from spending for damages obtained in an accident involving another vehicle or while driving your vehicle.

Personal Injury car insurance protect yourself from any medical expenses or damages due to a covered accident. Personal injury protection will coverage expenses such as hospital and medical, funeral expenses, and lost wages due to the accident. This is probably the most important type of car insurance other than liability coverage because you don’t want to be worrying about medical bills after a traumatizing experience.

Know that you know the basic types of car insurance, you can get a reasonably good idea of how car insurance works. It is protection for you, the third party, and anything else that can happen to your vehicle. Having car insurance will enable you to become more at rest if an unexpected situation comes up. It is especially helpful for finance related accidents.

Hopefully this piece of information on the three basic types of car insurance enables you to better understand how car insurance works, and why you need it. Again, liability coverage is the least type of car insurance you can acquire in most states, and it’s the least expensive of the three. To be totally protected from any circumstances that may arise, better secure all three types of car insurance.

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