Car Insurance Coverage in US

Uninsured/ Underinsured Coverage

  • UM or UIM is an abbreviation for the Uninsured/ Underinsured coverage. This insurance provides coverage if the person responsible for the accident, who causes damage to the vehicle, does not have any sort of Insurance.
  • This is a type of coverage that is often ignored or overlooked by a lot of people in USA. Many of the states have prescribed the minimum liability limits that are made compulsory by law.
  •  In case the person at fault does not have this or any other insurance, then the purchaser of the insurance and his/ her financial needs are taken care of by the insurance company. The costs incurred are then taken care of via payments from the party at fault.
  • Some insurance companies offer this coverage as a part of the package while others do not. Laws for UM/UIM defer from state to state and thus the difference in the offerings of the insurance companies.

Loan/ Lease Payoff Coverage

  • Loan/ Lease payoff coverage is one of the most important types of coverage offered by the insurance companies during the times of recession.
  •  GAP coverage is a protection for the purchaser of the insurance and is based on market trends regarding automobiles. The value of the vehicle after purchase does plummet and at a certain point of time, the amount owed to the banks via loan exceeds the actual value of the vehicle.
  •  If one finds that the vehicle cannot be further repaired then the owner still has a huge amount to pay (sometimes thousands of dollars). The entire motive of the GAP coverage is to provide financial stability to the purchaser of the insurance when there is a GAP between the actual value of the vehicle and the amount owed to the leasing company or the bank.
  • It generally, but not always covers late fees regarding payments or administrative fees which are assessed after the commencement of the loan and even certain skips of payments (also called payment deferrals). It is very important to understand all the intricacies involved in this type of coverage.

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