CAR INSURANCE IN THE USA

Car insurance is an agreement between an individual and a company wherein the individual agrees to pay premiums in exchange for the finances that would be paid by the company in cases of losses occurring in various kinds of accidents involving the car.

Car insurance can offer protection against physical damage resulting from collisions involving the car, theft, and damages caused due to natural disasters. Every state has different minimum coverage requirements and the damage done has to be met with these requirements for it to be compensated with money.

Insurance coverages:

These are the different damages that car insurance will cover.

1. Bodily injury liability coverage- The coverage comes into play when you're involved in a car accident where someone else gets injured at your fault. It will help pay the costs but only up to the limits of your policy. It is mandatory in 49 states except in New Hampshire where it is strongly recommended.

2. Property damage liability coverage- This covers up the expenses of any damage you might cause to someone else's property like their car or wall. It is mandatory in every state.

3. Collision coverage – It covers damage that might occur to your vehicle in case of a collision accident. It is not mandatory in any case.

4. Comprehensive coverage – It protects from any damages caused to your car in a natural disaster like flood and also theft. It Is not mandatory in any state.

5. Medical payments/Personal injury protection (PIP)-It covers medical costs if you or anyone else in your car is injured in an accident and is mandatory in some states.

6. Uninsured or underinsured motorist coverage- This plays into when you are in an accident with someone who doesn’t have car insurance or their car insurance doesn’t suffice the damage. It is mandatory in few states.

Car Insurance costs:

Two kinds of costs involved in car insurance include premiums and deductibles.

Most states demand a certain minimum amount of premium. Premiums depend largely on gender, age, years of driving experience, and several other factors. When you file a claim to the insurance company for covering the damages, the amount in that process is called deducible.

How Car Insurances operate:

Insurance is made up of various policies, each priced differently. The insurance company pays the damages outlined in these policies, in return for the premium you pay to them. Policy terms are renewable and usually are renewed between a six to eight-month time frame. The company notifies the customer when the policy terms are to be renewed. There are some liabilities that car owners of every state have to carry, like body injury liability and property damage liability. The body injury liability covers costs surrounding injuries or deaths that may occur while driving the car by you or anyone else driving it. Property damage liability involves the cost that may reimburse when you or anyone else driving your car causes damage to someone else or their car. A lot of states have also made it mandatory for car owners to carry medical payments or personal injury protection. This comes into play for any medical injuries caused to you or any medical injuries you cause to someone else. It also covers lost wages.

Several types of car insurances cover the above-stated coverages with added damages too.

1. Gap Insurance – A car insurance might not always be able to cover the amounts in loans since a car value might fall quickly. To cover any amount owed in terms of the loan, in case of the car being stolen or damaged, this kind of insurance is very helpful.

2. Towing and labor insurance – This kind of insurance may reimburse you the labor costs required to deal with the damages to your car, only if you already have comprehensive car insurance.

3. Rental reimbursement insurance- You might need a car to get to places even after yours has been damaged in an accident. Rental reimbursement insurance helps to pay for a rental car in such situations.

4. Classic Car Insurance – For owners of Vintage and classic cars, classic car insurance provides policies that meet the unique demands of these cars.

5. Uninsured motorist Insurance – In case of your car is damaged by an uninsured driver as well as hit and run cases, this insurance has policies to cover those specific damages. Most times this insurance is coupled with Underinsured motorist insurance.

6. Underinsured motorist insurance – At times the minimum carried by drivers in liability coverage might not be enough to cover the damages. Underinsured motorist insurance will protect you in cases where the driver's insurance doesn’t meet the requirements of the accident or damages caused.

7. Medical payments coverage – Regardless of the perpetuator of the accident, medical payments coverage helps pay for the medical costs that might be in involved in case of you getting injuries.

8. Personal protection injury insurance – If a covered accident causes certain medical expenses or loss of income, personal protection injury insurance helps pay for it. This insurance may cover up to eight percent of these expenses.

9. Comprehensive insurance -In case your car meets with an accident involving another car, comprehensive insurance will help provide an extra level of coverage to cover the damages done to your car. Comprehensive insurance also helps to covers accidents involving animals, certain extreme weather conditions, vandalization, and collisions with other cars.

10. Collision insurance – If your car ends up in a collision accident with another car, Collision insurance will help pay for the damages to your car and the other car. Collision insurance also helps repair or replace any other vehicle involved in such accidents if they are covered.

11. Liability coverage- Liability coverage helps cover damages to other properties or injuries in incases of accidents. It is mandatory for legal drivers to pay for in the States.