What is Car Insurance?

Car insurance is a type of insurance that covers the cost of damage to or loss of your car, medical expenses and other losses in case of an accident. That doesn’t sound too complicated right? But the truth is there are actually several different types of car insurance (or auto insurance as some call it) that you can buy, and they each have their own set of rules. So let’s take a look at exactly what types of car insurance there are and what they do so you can choose the one that works best for you.

Car insurance
Car insurance

Auto Insurance Basics

Auto insurance, also known as car insurance, protects you financially in case of an accident. This type of policy typically covers three things: liability, collision and comprehensive. Let’s briefly look at what each one means.

Comprehensive vs. Liability Coverage

This coverage makes up what most people think of when they hear car insurance. This can cover medical, disability and death expenses, which may come in handy if you or a loved one gets into an accident that injures you or someone else.

If a death occurs in an accident caused by another driver, life insurance will also cover funeral costs—and it won’t be held to a blood-relative requirement as it would be if you purchased individual life insurance. (There are exceptions: 

Some accident benefits policies don’t cover any costs related to organ donations.) Most experts recommend taking out enough so that your family won’t have to rely on Medicaid or public assistance programs for any coverage gaps left by whatever type of car-insurance plan you have.

Personal Injury Protection

For situations where you are at fault and are liable for an accident, personal injury protection (PIP) can provide coverage. PIP covers your medical bills, lost wages, and other costs associated with injuries from a crash or automobile related incident. In some states it also covers lost wages of those who were injured in your vehicle but not riding with you. 

Generally PIP is secondary to health insurance so if your health insurance pays for treatment you’re liable to repay any remaining costs not covered by your health plan. This can include copays or deductibles as well as some services that aren’t typically covered by health plans such as physical therapy and chiropractic care.

Collision vs. Comprehensive

Collision and comprehensive are two of your basic coverages that, taken together, make up your comprehensive auto insurance policy. As their names imply, they’re meant to cover you in different scenarios. Collision covers damage to your vehicle when you hit another object or are involved in an accident with another vehicle.

Comprehensive generally covers theft, vandalism and other events out of your control such as a hailstorm. The policy will also cover certain events when you’re not driving, but someone else is operating your vehicle with permission, like if they crash into something or are involved in an accident.

Deductibles (What Is It?)

The deductible, often abbreviated to just ded, refers to how much you’re willing to pay out of pocket before your insurer pays anything toward your claim. While lower deductibles can be a good way to save on premiums, they also force you to come up with more money if something happens—which isn’t so bad if you have money saved in an emergency fund. 

Also keep in mind that your deductible may change if you have multiple cars or houses insured with one company. Some insurers won’t let you waive a single deductible for all of your policies at once.

Car Insurance Cost By Age

Getting a proper auto insurance policy can be complicated, particularly if you don’t know what questions to ask. The cost of insurance differs depending on several factors: where you live, your age, your driving record and even your gender. In general, younger drivers with no claims have lower rates than older drivers who carry more accidents or tickets on their records. 

It’s important to do some research before settling on an auto insurer because you don’t want to overpay for something that isn’t necessary. Car Insurance Discounts: Did you know there are discounts available for everything from maintaining a good driving record to taking continuing education courses?

What is car insurance?

loss of your car, medical expenses and other losses in case of an accident. That doesn’t sound too complicated right? But the truth is there are actually several different types of car insurance (or auto insurance as some call it) that you can buy, and they each have their own set of rules. So let’s take a look at exactly what types of car insurance there are and what they do so you can choose the one that works best for you.

Car Insurance Cost By Age

Getting a proper auto insurance policy can be complicated, particularly if you don’t know what questions to ask. The cost of insurance differs depending on several factors: where you live, your age, your driving record and even your gender. In general, younger drivers with no claims have lower rates than older drivers who carry more accidents or tickets on their records. 

Click here for Finance related posts

Hey, My name is Sunil, I live inside Rajasthan in India and I am blogging from last 2 years. I hope you like my website.

Sharing Is Caring:

1 thought on “What is Car Insurance?”

  1. Pingback: Are you a farmer in need of insurance? Insurance for farmers » Techno Sunil

Leave a Comment