Auto insurance is basically insurance for automobiles, trucks, motorcycles, and any other road-going vehicles. Its primary function is to offer financial coverage against physical damage or injury caused by traffic accidents and from liability which may arise from accidents in a vehicle as well. Apart from providing compensation for property damage, auto insurance also covers the driver and passengers in case of any accident. The coverage provided by auto insurance varies from company to company.
One of the primary functions of auto insurance is to protect the insured vehicle. In the event of an accident, the auto insurance company sets aside a sum of money called the “wear and tear” allowance. This allowance will cover repair costs for the vehicle, such as car parts and engine repair. In the event that total loss is incurred due to the accident, the auto insurance company will compensate the injured party by paying them for their lost wages and also providing for the cost of rental vehicles for the time being.
In order to save more money on your premium, you may want to consider taking out comprehensive and collision coverage on your vehicle. Comprehensive coverage will help protect you from events like fire, theft, vandalism, and weather related events. Collision coverage, on the other hand, will help protect you from events like collisions with stationary objects. You can choose to take collision only if you have a newer vehicle and if your vehicle is fully paid for. If your vehicle is financed, you will have to take comprehensive coverage.
Another thing that you should consider is the level of bodily injury you want to be covered for. You may want to consider taking medical payments or complete and total Bodily Injury coverage. This will help you pay for medical expenses incurred by other persons or any one else on the roads who are injured while driving your vehicle. The cost of this type of coverage depends on the type of vehicle you have as well as the driver. If your vehicle has special modifications or added parts that increase the risk of accidents, then this type of coverage will also be more expensive.
Lastly, consider the option of adding comprehensive and collision insurance to your vehicle. This will not only increase your monthly premium, it will also make sure that you are covered in case you are at fault in an accident. You will be covered regardless of whether the other person is at fault or not. Remember that if the other person does have insurance, then it will be covered too. It will just be reflected as a fraction of your costs.
Most insurance companies will require you to have at least bodily injury and property damage coverage, but they will also look at your driving record. These factors will determine what your auto policy will include. Some companies will allow you to choose between collision and comprehensive coverage. It is important that you are familiar with what these two types of coverage are and what it covers so that you will know what you need to have with regards to your vehicle.