Understanding The Legalities And Jargon Of Auto Insurance

Auto insurance is not really an exciting subject, but it is highly necessary. It is a financial safeguard that will allow your car to be repaired and injuries to be covered, in the case of an accident, whether it was your fault or someone else’s. This is also why car insurance is mandatory across the country.

“Around 1925 Massachusetts and Connecticut became the first two states to write compulsory car insurance laws, in effect creating a pooled solution to help cover the costs of at-fault drivers so they wouldn’t default on their payouts. Since then, nearly every state in the union has enacted mandatory car insurance liability laws.”

However, because auto insurance is mandated at the state level, there is no one single rule that applies everywhere. There are, in effect, 50 different rules. And none of those are explained very clearly! Let’s take a look at what is there to know about insurance.

What Is Auto Insurance?

There is a surprisingly large number of people who really don’t understand auto insurance, nor why they really need it. The reason for this is probably because insurance is something intangible. Furthermore, many people end up never having to rely on their insurance, which makes it hard to really understand its value. So first, you have to understand what is auto or car insurance.

“Car insurance can pay to repair your vehicle after an accident depending on what coverage you select. A vehicle is often a major expense and you want to protect it. Comprehensive and collision each offers coverage for physical damage, which comes with a lot of rules regarding what is covered and what is not.”

What this means is that you pay a company – the insurer – and if you have an accident with your car, they pay for the expenses, which actually come from the money that have been paid in premiums. Why you need it is clear: a damaged vehicle and other damages to property require a huge expense, as are medical expenses.

Different Types of Auto Insurance

There are different elements to every auto insurance policy. One such element is liability insurance.

“If you cause an accident, liability coverage helps pay for the other person’s expenses. There are two types of auto liability coverage that drivers in each state must have: bodily injury liability coverage and property damage liability coverage.”

There are a number of so-called “no-fault” states. Here, you have to also have Personal Injury Protection (PIP), which will cover your own injuries and is irrespective of who was at fault for the accident.

Then, there is the element of collision coverage, as well as comprehensive coverage, which looks at flooding, fire, theft, and others. The term “full coverage” describes auto insurance in which all of these different elements are included.

There are also some option extras, such as:

• Uninsured motorist coverage
• Medical payments coverage

How to Obtain Auto Insurance

There are lots of ways to get a good deal on car insurance. You could, for instance, walk into an insurance agent’s office, or you could call up different companies. However, the easiest way to get a good deal is to use a price comparison website.

“Your searching spectrum gets limited to your own laptop or PC while you’re checking out a few online options. At the same time, you have the opportunity of checking a long list of online options with a few clicks of the mouse. You find more options to stick to your budget while checking out all online options and pricing at once.”

It may be tempting for you to go straight to the insurance company whose name you have heard before. However, the reason why those companies may sound familiar to you is usually not because they are the best ones, but rather because they have spent the most money on advertising.