Understanding the Types of Auto Insurance

August 03, 2017

Understanding the Types of Auto Insurance

Understanding the Types of Auto Insurance - Understanding auto insurance can be a difficult task, more so when you have never had to deal with insurance company and the types of policy they offer. Not only do you unable to navigate your way around the seemingly endless confusing terms, you also do not understand which type of automotive insurance policy you actually need. It would be a terrible move to choose one policy, and one with a high premium at that, only to realize that the policy is good as being not covered.
Understanding the Types of Auto Insurance
Understanding the Types of Auto Insurance

If you are one of those new car owners who have a little to zero knowledge on the matter, do not freak out. Here in this article, not only will you find the basic knowledge that will help you understand the differences between one policy and another, but also a few valuable tips to help you make an informed decision.

The importance of having an auto insurance policy

We all know the importance of having a car insurance, while it may seem like an extra expense that takes up a portion of your paycheck, being protected from devastating events is a much better option than cruising the road and gambling with not only your future – but also your loved ones’.

Yes, in the event of car collision, a car owner may need immediate financial assistance whether it be for car repairment or replacement, or hospitalization should you are injured. In the worst circumstance, your loved ones may need assistance for funeral arrangement and for their future. Or perhaps the car collision is unavoidable and you are in the wrong, the victim will most likely demand financial support to repair any damage you caused. Both of these scenarios share the same ending: you have a large, unexpected spending – and while the first scenario can be covered by your life insurance in case of death, any car repair or replacement cannot.

Which type of auto insurance policy is the right one for me?

This is quite possibly the most confusing part when it comes to decide on the right policy, simply because not everyone is aware of the differences of each policy offered to them. If you are one of those people, see the following explanation to understand the differences.

    Liability insurance

This type of coverage is specifically designed to protect car owners in situations where they are found to be responsible for any injury or damage should they get into a collision or an accident. If a car owner with this type of coverage is involved in an accident and is found to be in the wrong, they do not have to worry about draining their bank account to pay for damages and medical bills of the other party because the policy has it covered.

    Comprehensive insurance

This type of coverage is designed to protect cat owners from other forms of damage which are not caused by an accident or collision – which means damages caused by vandalism, theft, flood, hurricane, and other type of natural disaster is covered by your insurance company and you may easily claim it when you are stuck in such situation.
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