- Insurance

Car Insurance Vernacular – Minimums, Liability, Comprehensive, and Full Coverage

If you happen to own a vehicle, it is important to know that the law makes it mandatory for the vehicle owners to avail insurance coverage for their vehicles. It is required in all the states. The owner has the choice to decide upon the type of insurance coverage; however the owners have to carry some kind of liability coverage which can compensate for the expenses occurring due to personal injury and property damage.

The mandate exists because if you get injured in an accident, or accidentally damage someone property, you do not have to pay the grieved party – the insurance company does it for you, and in case of personal injury the company pays the medical bills. It is worth knowing about some of the common insurance coverage options generally offered by the insurance providers. The plans are available for long durations. A few companies also offer plans for short term car insurance, if your premium budget is less. The plans are narrated below.

Liability coverage

This is the main and the most important aspect of insurance coverage. This plan protects the “insured” against the litigation and lawsuits filed by people who have suffered some kind of property damage, or received some kind of bodily injury, due to some action or activity carried out by the “insured”. It is worth knowing that insurance companies do not pay anything “under the sum” i.e. there are limits involved while paying the compensation. So if the accident involves more than one person, the insurance provider would pay up to the maximum limit signed within the plan. The remaining amount, if needed, is to be paid by the “insured”. The coverage is available for both new cars for sale, and also for used cars.

Medical coverage

This plan happens to be one of the most important forms of insurance coverage for majority of the people across the world. In most of the countries, medical expenses and fees tend to be high. So individuals work out this particular form of insurance coverage very carefully. The insurance provider pays all expenses arising due to hospitalization carried out for medical or surgical treatment, ambulance charges, nursing fees, and even expenses incurring during funerals. Medical coverage only provides compensation for any or all expenses associated with medical activity and/or treatment, and this can even include physiotherapy charges. However, the compensation is provided only up to the specified limit, so if the hospitalization is longer, and the medical bills mount up, the insurance provider will redeem a maximum of the signed amount mentioned in the plan.

Uninsured motorists coverage

This plan is recommended to secure protection against expenses occurring when the entity responsible for your damage is not known, and is not available. Typically the plan provides compensation for hit-and-run type of scenarios, when the person responsible for the accident or damage flees from the scene of the accident. The plan is also popularly known as the “UM” plan. Again there is a fixed limit up to which the insurance provider will pay, and only if the entity responsible for the damages is unknown. Many auto companies offer new car insurance while buying your car, so you do not have to find an independent insurance provider.

Automobile damage coverage

This coverage is also important for vehicle owners, since it provides coverage in the event your car gets damaged in an accident, and you incur a substantial “repairs” bill. The plan is actually offered in two parts:

The collision coverage

As the name suggests it covers any damages occurring due to any kind of impact or collision.

Other-than-collision coverage

This option is also known as the “OTC” plans, and provides coverage for other factors such as theft, fire, explosion, earthquake, flood, vandalism, and even animal accidents. Again there is a fixed upper limit, for both the options, up to which the insurance provider will compensate for.