Tips For How The 3 Basic Types Of Car Insurance Work

By Kathy Seneth

So how does car insurance specifically work? Well first, you need to figure out the fundamental types of car insurance and what they cover in relation to specific types of accident. There is liability coverage, personal property coverage, and personal injury coverage. Every insurance has a different coverage and specializes in different areas of concern. Here is how each car insurance policies work.

Liability car insurance is also known as third party liability, meaning it only protects other people and their property (not you) when an accident occurs. It also covers any medical issues that arise to the third party. In short, liability only protects you from paying damages to other people and their property. It will not pay you for damages to your car.

Liability car insurance saves you the most money among car insurances. This type of car insurance is recommended for those who are short in cash and possess outmoded cars. Many states permit you to acquire liability insurance only, but some states oblige you to be 100 percent covered. Please verify with your state for more details.

Property car insurance coverage is also referred to as comprehensive and collision. Comprehensive coverage shoulders any damage expenses that may arise from other uncontrollable factors aside from accidents, such as hail, theft etc. Collision coverage, as the name implies, protects you from spending for damages obtained in an accident involving another vehicle or while driving your vehicle.

Personal Injury car insurance protect yourself from any medical expenses or damages due to a covered accident. Personal injury protection will coverage expenses such as hospital and medical, funeral expenses, and lost wages due to the accident. This is probably the most important type of car insurance other than liability coverage because you don't want to be worrying about medical bills after a traumatizing experience.

Now that you are familiar with the basic types of car insurance, you have a clearer picture of how a car insurance works. It serves as a protection for you, the third party, and your vehicle from accidents and other factors beyond your control. Having a car insurance will enable you to relax more whenever an unexpected situation comes up. It is particularly useful for finance related accidents.

Hopefully this brief overview of the three basic types of car insurance enables you to better comprehend how car insurance works, and why it is essential for you. Once more, liability coverage is the least type of car insurance you need to obtain most states, and it's the cheapest of the three. For total security, get all types of insurance to make sure you get protected from damages and all costs that may arise from accidents and other factors. - 23212

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Next, to answer the question how does car insurance work head over to the how car insurance works website for more tips on car insurance and how to get the best rates.