Automobile Insurance Coverages

You have to know the pros and cons of an automobile insurance coverage when you be the proud owner of a brand new automobile however, you have taken a car loan and worked out the installment payments. You are reconciled to the fact that the gasoline bills will pinch your pocket.  The only expense you are cribbing about is the cost of automobile insurance.

You should know that automobile insurance is mandated by law and surely you wouldn’t dream of not taking it. After all, you do not want to pay a fine, nor do you want your car to be seized, or worse still your license to be confiscated.  So, like a good citizen, you are going to take a policy with the required automobile insurance coverage though you are not happy with the additional burden which you feel is quite unnecessary.

Automobile Insurance Coverages

As an automobile owner you face different kinds of risks.  When you take automobile insurance, you are protected from adverse situations ranging from your being injured in a car accident to a third party suing you for damage caused to his car in an automobile mishap.  Insurance companies offer you a variety of automobile insurance coverage, each safeguarding you against one particular risk.  The premium you pay for your automobile insurance will depend on the coverage you opt for.

Different kinds of Automobile Insurance Coverages

  • Bodily Injury Liability Coverages

When driving your car, you may cause injuries to others.  Even if you are not at fault, the injured party may sue you for compensation.  If you have opted for bodily injury liability coverage, your insurance company will compensate you for any compensation you need to pay to the injured as well as any legal costs you bear to prove that the suing party is falsely claiming injury.

  • Property Damage Liability Coverages

This coverage protects you from any liability arising from damage to property caused by your car, irrespective of the fact whether you are at fault or not.  This along with bodily injury liability coverage forms part of third party automobile insurance coverage offered by automobile insurance companies.

  • Personal Injury Protection Coverages

This is also known as “no fault” coverage.  If you have taken this coverage, you will be compensated for any injuries even if they were caused when you were not driving.  So if you are involved in any accident with a motor vehicle whether you were just crossing the road or cycling, you would still be compensated.  It also covers injuries to your child, your household members, and maybe even other car passengers who do not have this coverage.

  • Uninsured and Underinsured Motorists Coverages

If you have taken this coverage, your insurance company will compensate you if you are a victim of a hit and run accident or if an uninsured / underinsured vehicle hits your car causing damage.

  • Collision Coverages

Your car may collide with another car due to a freak accident.  In this case, the driver of the other car may not be at fault and so you cannot take him to court for damages.  You will be compensated for your car repair costs by your insurance company if you have taken collision coverage.

  • Comprehensive Coverages

None of the above automobile insurance coverages will offer you protection if your car is damaged by a tree fall or by fire or if it is vandalized.  If you have opted for comprehensive coverage in your automobile insurance policy, you will be compensated for any loss caused by such incidents.

Selection of Automobile Insurance Coverages 

  • Find out which automobile insurance coverages are compulsorily to be taken.
  • If you have taken a car loan, the lender may insist on certain kinds of coverage.
  • You also have to decide which other automobile insurance coverage you need, based on your financial situation.

One should understand the importance of automobile insurance only when an unforeseen adverse event occurs.  Instead of repenting later for not taking adequate coverage, you can ward off the risks arising from a car mishap by taking suitable automobile insurance coverage right now.

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