Saturday, April 25, 2009
AUTO INSURANCE IN AMERICA
When ever a person is buying a car that person must have auto insurance. This is mandatory in most of the states of United States of America. So it very essential for a person to have a knowledge of it and its types as this will help a person to select a policy that best suits his or her needs. Types of polices:
Auto insurance companies in America provide a lot of policy that can satisfy one’s need. There is Personal Injury Protection (PIP), policies regarding Liability, Collision coverage, Uninsured motorist coverage, Underinsured motorist coverage and Comprehensive coverage.
Personal Injury Protection (PIP) – This kind of policy provides medical benefits to the person or to those who are affected in car accident. This kind of policy pays the medical bills without considering the faulty person. PIP is mandatory for all drivers. This is also "no-fault" insurance. It has two parts. One that pays the medical expenses and other one pays for non-medical bills.
Liability – This type of insurance is designed to pay those who are affected due that to person who is responsible for the accident. Liability coverage protects that person who is responsible for the accident by paying of legal expenses. This policy is divided in to two types: Bodily Injury Liability coverage and property Damage Liability coverage.
The Uninsured Motorist Coverage – In this case, if a person suffers due to any accident by an uninsured driver then this policy will compensate that person who is holding this policy. If the person who is responsible for the accident does not have any Liability coverage, he will not be paid for.
Underinsured Motorist coverage- This policy pays the owner of the damaged car in an accident by another driver who has limited insurance coverage. In this case, the policy pays the difference in the policy amount of the drivers. Therefore, the policy amount of the damaged car driver must be higher than the other.
Collision Coverage – This type of car insurance refunds for any damage to the car owner due t any accident caused by any one of the person involved.
Comprehensive Coverage – This policy covers the car owner from any damage to the car that is not due to collision.
Taking up any policy mainly depends on the state’s minimum liability requirements and affordability of any person. Many people try not to go for car insurance policy and to save that money but one should think about the financial pressure that a person would be having if he or she does not have any auto insurance coverage. At the same time, spending more than required on any car insurance is also not justifiable. Therefore, decision must be taken wisely.
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