The day you own a car, you enter the world of auto insurance policy, whether you like it or not? If you own a vehicle by law you are entitled to an auto insurance as per the rules of the State. But do you have a thorough understanding about your insurance policy or are you at least aware of the basics of your auto insurance policy. The answer most of them likely to give is a No! Since it is no longer possible to think without a car, so is auto insurance policy. We don’t need to be an expert on auto insurance policy but should be aware of the fundamentals.
A usual auto insurance policy consists mainly of five parts. Like in any contract there is the declaration part. It contains your personal information and details about your vehicle. Along with this it also contains details about your policy and the type of coverage you have opted for and its limits and deductions. You must be always careful with your declaration because your claim can be denied if you provide wrong information.
Next is the coverage part. It goes into aspects like your coverage options and limits. It gives you a picture of what your company will provide for your auto insurance policy. The third part deals with exclusions that is aspects to which the insurance provider has no liability. The first and second part gives you a basic idea of what you are entitled through your auto insurance policy.
Conditions, an essential part in any contract, form the fourth part. All legal aspects pertaining to your policy is dealt here like ways to file a claim and also the steps to sort out disagreements. The final part is the one popularly known as ?®fine print.’ It describes terms and provides information on the rights of the policyholder and the provider.
Some of the most common terms you come across an auto insurance quote are coverage and liability. A normal auto insurance policy includes two types of coverage – collision coverage and comprehensive coverage. Collision coverage deals with the damage caused to your vehicle through a collision. It is the most costly part of an auto insurance policy as it pays for the repair of your vehicle. Here you should opt for a deductible that is you pay an amount of the bill and the insurance company takes care of the rest of the bill. Your premium will be less if you pay a higher amount. Comprehensive coverage deals with other damages caused to your vehicle other than accident or overturn. The premium payable is similar to collision coverage.
Liability takes care of the damages caused by you to others. It takes care of the injuries and property damage caused by you. This is the basic aspect of any auto insurance policy and liability limit is different for different states.
Other coverage’s include medical payments, which looks into all medical and funeral expenses involved in an accident irrespective of who caused it. Personal injury protection or no-fault benefits usually includes compensation for medical expenses, loss of income from work, accidental death and funeral expenses, and survivor benefits.
Each state has laws regarding auto insurance policy but they may not be adequate. So do an assessment of your policy once in a while and see if you are sufficiently covered.