As the owner of a motor vehicle, auto insurance covers your risk of financial liability or the loss you might face if your vehicle is involved in a collision that results in physical or property damage. Some states require vehicle owners carry a minimum level of liability insurance and carry a card to prove it. If you are financing a vehicle, the terms of your loan may define the type of auto insurance the lender expects you to maintain.
Basics About Auto Liability Insurance Coverage
Unless there are exclusions, auto liability insurance covers claims against the policyholder and certain other operators of the insurance vehicle. If they live at the same address, they must be covered on the policy. Sometimes this insurance does not protect drivers who operate vehicles other than their own. Liability covers bodily image or property damage that the insured driver is determined to be responsible for. The amount of coverage varies based on the jurisdiction and policy. Usually coverage can be increased by paying an additional premium. There are maximum payments per person and per accident.
Full Auto Insurance Coverage
Liability coverage is the minimum required by many states. Full coverage includes a combination of liability, comprehensive and collision coverage. Collision coverage provides cover for vehicles involved in collisions and a deductive must be paid. Payment is made to repair your damaged vehicle or replace it if the vehicle is totaled. Comprehensive coverage covers vehicles damaged from incidents such as weather, vandalism, fire, theft or impacts with animals. It may also cover certain “Acts of God” such as hurricanes or floods. Loss of use might be included in a full auto insurance policy, which covers the cost to rent a vehicle while the insurance car is being repaired.
What Does Auto Insurance Cost?
The cost of auto insurance depends on various factors such as the type of vehicle covered, the gender and age of covered drivers, their driving history and the location where the vehicle is stored and driven. The higher the risk, the most expensive your auto insurance premiums will be. If your state requires a minimum auto insurance policy, the fines and penalties you face could be severe if you do not carry proper coverage.