What is Auto Insurance?
Auto insurance, also known as vehicle insurance, car insurance, or motor insurance, is insurance that you purchase for cars in order to protect you against financial loss if you have an accident as well as against liability that could be incurred in an accident.
Auto insurance is a contract between you and the insurance company whereby you agree to pay a premium and the insurance company agrees to pay your losses as defined in your policy. An auto insurance policy is comprised of various different kinds of coverage including property, liability and medical coverage as follows:
- Property Coverage – Pays for damage to or theft of your car
- Liability Coverage – Pays for your legal responsibility to others for bodily injury or property damage
- Medical Coverage – Pays for the cost of treating injuries, rehabilitation and sometimes loss of wages and funeral expenses
Why Do You Need Auto Insurance?
Auto insurance is really about smart planning which can offer valuable protection from expensive and unexpected financial losses associated with traffic accidents, vehicle damages from things such as vandalism, fire, theft and more.
Auto insurance should be incorporated into your total financial plan and can benefit you as follows:
- Pay for medical bills after an accident if necessary
- Protect you from the costly damages of an accident-related lawsuit
- Safeguard the financial investment you have made in your car
- Protect you from uninsured or under-insured motorists
- Pay for damage repairs due to theft, vandalism, fire or natural disasters
- Give you peace of mind, every time you take to the road
It is important to understand that not all auto insurance policies are alike and so it is vital that you understand the details of your requirements including what you need to protect, and how each auto insurance coverage option applies.
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