Having an auto insurance coverage will help you protect whenever you figure in a car accident or when there is a loss to your automobile like fire and theft. You also need to be protected in case you injure another person through the use of your car or you made a damage to somebody’s property when using your car.
Auto insurance coverage is excluded from most homeowners forms thus auto insurance must be covered separately and it is called a personal auto policy. Since the personal auto policy contains property and liability auto insurance coverage, it is considered a package policy. The auto insurance policy form contains four distinct coverage with each coverage having its own conditions, agreements and exclusions.
One part of the auto insurance policy is the liability coverage. This is almost mandatory in most states in the United States. This coverage provides for the amount that the auto insurance company will pay to the victim of the car accident or to the value of the damaged property but only up to a certain amount provided in the car insurance policy. The person who caused the accident will pay any excess on the auto insurance policy limits. This coverage can be a standalone coverage or it can be combined with other coverages.
Another part of the auto insurance policy is the medical payments coverage. This coverage provides medical payment if you are injured in a car accident but only up to a certain limit of the policy. This is an optional coverage and it may only be included in the auto insurance policy if the policy includes liability coverage.
The third part of auto insurance policy is the uninsured motorist coverage which protects you, the other passengers of the vehicle and the vehicle itself from an uninsured driver. This is subject to the law and may vary from one state to another. In some states this is mandatory but in others the insured may opt out of this coverage in the policy. This type of coverage can only be written if there is also a liability coverage.
The fourth coverage of the auto insurance policy is the coverage for the damage to your car. This covers the actual physical damage to your vehicle. The policy covers the damage brought on the collision of your car and damages other than collision like fire and theft. This type of coverage can be a standalone coverage or can be written in conjunction with a liability coverage.
The personal auto policy can be written to a single individual or to the husband and wife who are on the same household. Most auto insurance coverage are written to include all of the available coverages but if you are saving money, you can choose whatever auto insurance coverage you want and opt out of the others which are not mandatory. Just be reminded to read the fine prints since there are conditions, limitations and exclusions in the auto insurance coverage.