The Basics Of Auto Insurance

by Connie Barker

Auto insurance is used to protect an individual or entity
against financial loss. Financial loss can occur in many
different ways in association with vehicles, and most auto
insurance policies agree to cover the individual or entity by
providing insurance against property damage, medical coverage
and liability damages. For instance, many auto insurance
policies cover:

Coverage of property damage, sometimes including theft and
accidents

Medical coverage in the case you are inured in a vehicle
accident. Many policies cover treating immediate injuries, some
policies continue coverage for rehabilitation or even lost wages
and funeral expenses.

Coverage for liability damages. Liability coverage will pay for
legal damages done to other individuals or property.

Auto insurance is essentially a contract between you and your
insurance company. You pay a premium at a regular interval and
the insurance company is legally responsible to cover damages
that your policy covers.

There are many different types of policies and it should be
noted that the vast majority of state governments require an
individual or entity to purchase at least basic auto insurance
coverage in order to operate certain vehicles on public
roadways. In many cases, if you operate a vehicle that is not
insured, you can have your license revoked and pay large
penalties. Some of the more popular coverage options for auto
insurance policies available are;

Collision- this type of coverage protects your vehicle from
damages that result from a car accident with another vehicle or
with other objects on the road. If your vehicle gets into a car
accident, the insurance will pay for repairs or if the car is
totaled will cover the damages for the car's worth.

Comprehensive- this type of coverage protects your vehicle from
damages that are a result of things other than a collision. For
instance, if your radio was stolen and the burglar broke your
window and ruined your dashboard, the auto insurance will cover
your losses or fix the damage.

Policies are usually for 6 months or a year and the rate that
you pay for your premium is dependent on many variables
including type of coverage, age, type of vehicle, location of
residence and how you use your vehicle. There are many other
variables that might be taken into consideration; however each
insurance company has their own formula for calculating the cost
of a policy.

About the author:
Connie Barker is the owner of several financial websites
including those that deal with Auto Insurance