Understanding how Auto Insurance Works

Auto insurance is a very serious subject and all road users should develop a thorough understanding of the different ways in which coverage works.  If a car owner is involved in a road traffic accident or their vehicle is accidentally damaged by any other means, a firm grasp of basic auto insurance knowledge is likely to make things much easier when the time comes to actually make a claim.

First and foremost, motorists need to be aware that auto insurance coverage is a mandatory requirement in most US states. Although minimum requirements are likely to vary from region to region, it is still imperative that a sufficient auto insurance policy has been purchased. One of the key features in most auto insurance packages is liability coverage and this is included within almost every policy as a means of establishing financial responsibility if injuries to other drivers are sustained in an at-fault accident. Furthermore, property damage liability will cover the cost of repairs or replacement to third party vehicles and property.

Collision coverage is also a recommended feature for newer models as this will cover the cost of repairs to the vehicle of the policyholder even if they are found to be at fault in a road traffic accident. Comprehensive insurance is another great option for new models and this form of auto insurance coverage covers the cost of repairs to a vehicle if it is damaged due to fire, theft, adverse weather conditions or falling objects.

Personal injury protection is compulsory in many US states and this auto insurance feature will cover the cost of medical treatment for the policyholder after a road traffic accident up to a specified limit. Uninsured/underinsured motorist coverage and GAP insurance are also common additions to a basic auto insurance policy.