By Jim Grayson
Car insurance protects you against any financial loss that may
happen due to an accident or theft of your car. It is a car
insurance company that issues car insurance to you. A car
insurance company will work up a car insurance policy for you
after evaluating the various options like the make of your
the premium that you are willing to pay, your insurance risk,
etc. A yearly premium has to be paid by you to the car
insurance company so that the company can pay for your loses
that you may bear in the future. All the terms and conditions
are mentioned in the contract and it is your duty as a car
owner to look over all the points and ask the insurance agent
any questions that you have in mind. It is only after all the
terms and conditions are clear to you that you should sign on
the dotted line and pay the premium.
Normally all car insurance companies have the same insurance
policies. The premium to be paid and the percentage of losses
to be covered in case of any accident may vary slightly. Since
the car insurance market is very competitive, the premium
and other terms and conditions almost remain the same.
A car insurance policy may provide property, liability and
coverage depending on the type of policy. The property
covers losses for damage of the car or the theft of the car.
Liability coverage pays for any legal liabilities to other
people for bodily harm or property damage. And medical
covers expenses for treating injuries, medicine expenses and
funeral expenses in case of a car accident. You may buy the
different types of coverage depending on how much you want to
spend on your policy.
A car insurance policy usually consists of 6 types of
As mentioned before a customer can select from the different
types of coverage. Most of the car policies last from 6 months
to a year. Your car insurance company will bill you when it is
time to renew your policy and be prepared for a rate hike.
The different types of coverage are :-
1) Bodily Injury Liability
This type of liability covers the expenses of injuries that
may cause to someone else while driving your car. Also the
coverage includes injuries caused to a person while driving
other personís car.
2) Medical Payments and Personal Injury Protection
This type of liability covers the expenses for the treatment
injuries to drivers and other passengers. The liability also
covers medical expenses and funeral expenses in the case of
3) Property Damage Liability
This type of liability covers for damage to the other personís
car and your car. It may also include damage to lamp posts,
telephone poles, fences and other public property.
This type of liability covers expenses for damage to your car
or the other personís car. Even if you are at fault, then also
you will be reimbursed for the expenses of repairing the car.
This liability covers loses due to theft or damage to the car
by something other than collision with another object or
to the car due to fire, falling objects, explosion,
6) Uninsured and Underinsured Motorist Coverage
This liability covers damages to your car by another driver
The coverages mentioned above are offered by all car insurance
companies. In almost all states, car insurance is mandatory.
Therefore, it is your responsibility as a car driver to have a
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