Buying auto insurance need not throw you into fits of confusion. By understanding what your needs are and what coverages are available to you, you will be able to choose the right policy.
Liability Cover. Liability coverage pays others for damages resulting from a car accident that you cause. It also pays for a lawyer to defend you if you are sued for damages.
Comprehensive Coverage – Comprehensive cover requires your auto insurance company to pay for damage to your car caused by something other than an auto accident such as fire, theft or vandalism. This sort of coverage is subject to a deductible. If you decide upon a $100 deductible, then you pay the first $100 and the company pays the rest up to the policy limit. Sometime this cover is combined with collision protection that covers you for damages sustained in a car accident.
Collision Coverage – With collision coverage, your auto insurance company pays for damage to your car if it is involved in a collision with another vehicle or with a stationery object, no matter who is at fault.
Uninsured/Underinsured Cover – Uninsured motorist cover is available for protection if you are involved in a traffic accident with a driver who is either uninsured or underinsured.
GAP Coverage. We all know that there is a sharp decline in the value of a car immediately after purchase. This means that any loan you took out to finance the purchase of the vehicle could be many thousands of dollars greater than the amount your auto insurance company would pay out if your car was stolen or became a total loss following an accident. Gap cover or loan/lease cover as it is also known is intended to bridge that gap in valuation and the amount you owe on the loan.
PIP Personal Injury Protection – PIP (also known as no-fault), covers medical and funeral expenses and lost wages of the driver and passengers in the insured vehicle no matter who caused the accident.
Pay-Per-Mile/Pay-As-You-Drive. Unlike the usual type of auto insurance policies that charge a flat rate based on time periods, Pay-Per-Mile coverage is based entirely on the distance driven. The distance is measured via a tracking device that the auto insurance company fits to your car.
With the Internet easily accessible you have a vast amount of knowledge at your fingertips to help you choose the best coverage for you and your lifestyle.
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