How Does Car Insurance Work?

There are more cars on the road every year. As this number increases, the chances of a car wreck will also go up. Automobile insurance can be the difference between a minor setback and a large hassle. But why do you need insurance and just how much do you need? Car accidents can result in many different expenses, which your insurance might be able to pay for based on the insurance policy you own. Every state or province requires car insurance by law. Electing to drive without owning insurance could mean you have to repair or replace a stolen or damaged vehicle and pay the cost of all the damage that you may have caused. Liability: Bodily injury and property damage that you are responsible for will be paid for under liability insurance. It also covers your defense and court costs if you are sued. State laws typically require standard amounts of liability insurance, but larger amounts can be purchased and are extremely helpful. Personal Injury Protection: Personal injury insurance is required in some states and is optional in others. It pays you or your passengers for medical treatment resulting from a crash, regardless of who may have been at fault, and is often called no-fault coverage. It may also pay for lost earnings, replacement of services and funeral costs. State government typically sets minimum amounts. Medical Payments: This coverage is available in states that are not considered no-fault; it pays regardless of who carries responsibility for an accident. If you buy this type of coverage, you will receive payment for necessary medical and funeral costs. Collision: Pays for damage to your vehicle caused by a collision. Comprehensive: This applies if your vehicle is stolen or damaged by something other than a collision, including weather damage or vandalism. Uninsured Motorist: Pays for damages when an insured person is in an accident caused by another person who does not have liability insurance or by a person who cannot be identified (typically a hit-and-run driver). Under-Insured Motorist: Many drivers have liability insurance that can't pay for all the expenses they are responsible for. This type of insurance protects you from those drivers. Other types of coverage, such as emergency road service, are also available. State Farm Clermont