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What Is Car Insurance

What is Car Insurance and Why do We Have to Have It?

If you operate a motor vehicle you probably have auto insurance. Most states require that all drivers have appropriate coverage. But why must we have auto coverage, and how does it work? In this article I will answer that query in hopes that you will have a better understanding of precisely what automobile insurance is.

When you get a car insurance policy you have entered into an agreement with the insurance company. Your end of the deal is to make sure you pay your premiums on time and it's the insurance company's obligation to assume financial responsibility for any financial losses caused by injuries or property damage if you are involved in a wreck, up to the sum stated in your policy.

The minimum amount of coverage you could possibly get would be liability coverage only. If you are at fault in an accident liability coverage will only pay for damage to the other person's vehicle as well as their medical expenses but will not pay for damages to your vehicle. If you want your property and possible medical expenses to be covered no matter who is at fault you can acquire additional coverage.

Other options available to you are collision coverage and uninsured motorist coverage. Collision coverage will pay to repair your car whether you were at fault or not. Uninsured motorist coverage will pay to repair your car if you are in a wreck in which you are not at fault but the other party doesn't have car insurance.

If you have a new or expensive car you may even want to have a comprehensive policy that would reimburse you for any loss to your vehicle other than a collision. This type of policy would cover you in the event that your car sustained damage from fire, extreme weather, floods, and also theft or vandalism.

There are many variables in terms of the different choices of coverage you can get for your vehicle. And of course these variables will also affect the cost of your premium payments. When you have figured out just how much insurance you want it would be a wise decision to do some comparison shopping, obtaining quotes from a number of different providers to be certain you're getting the top coverage at the most affordable price.