What is the Purpose of Auto Insurance?
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Automobile coverage can serve many purposes depending on a person's needs and situations. Mainly, states require motorists to carry a policy at their required limits in order to ensure that there is compensation in place in the event that a traffic accident occurs and there are injuries and/or property damage as a result. Additionally, it can provide valuable protection to an insured's assets, liabilities, personal injuries, vehicles, and financial hardship.
One can tailor their particular policy based on their needs, budget and particular situation. Learn more about what auto insurance covers and the benefits they offer.
Different Purposes of Car Insurance
Aside from state laws making it mandatory, having the proper coverage can help motorists avoid financial hardships resulting from automobile accidents. Most commonly, states require drivers to have a liability policy in order to operate vehicles legally. The main intention is to make sure that other motorists will be compensated for injuries and/or damages that are caused by another party, but this benefits the policyholder as well. By having one of these policies, the insured's provider will pay for injuries and/or damages that they cause up to the limits purchased. This can be quite beneficial considering the cost of medical expenses and the price of repairs or the replacement of vehicles.
Many individuals get more extensive protection in order to further protect their property and assets. Raising liability limits can help pay for serious injuries and damage to property. If a person suffers a permanent injury, dismemberment or disfigurement, the chances are that the state's requirements won't be sufficient in order to cover the cost of medical bills and/or rehabilitation. A very common addition to policies is comprehensive and collision coverage. This serves the purpose of covering a vehicle for physical damages and theft. This can include, but is not limited to: collisions, hail, striking an animal, fire, theft, vandalism among many other perils and is subject to payment of the deductible chosen at the time of purchase.
There are many various types of coverage with different benefits and purposes. In some states "Uninsured Motorist" is a requirement and even if it is not, it can be quite beneficial. This will pay for injuries to the policyholder and their passengers if they are struck by a driver who does not have a policy, does not have adequate coverage or if the insured is a victim of a hit-and-run. There are many optional add-ons to policies that may benefit some and not others. One should analyze their situation and needs in order to determine which protection should be purchased and which is not necessary.
Not all companies offer higher limits or all types of policies; therefore, one should obtain quotes and compare based on their needs in order to find an insurer that can offer the right product at the right price. Furthermore, all states have different laws and limits pertaining to auto insurance, one should become familiar with their particular state's requirements to help make sure that they are educated about their responsibilities and rights as a motorist.