If you want to drive an automobile in the United States, you are going to need to get yourself insured. You cannot legally drive a vehicle in any state without coverage of some kind. The insurance market is a complex and diverse place. There is no ‘one size fits all’ kind of automobile insurance. Like many other areas in the US economy, the automobile industry is balanced by a network of liabilities and insurance systems. This network, in theory, prevents catastrophic losses due to an accident from being passed on to the individual owners of vehicles. Here is a very brief guide to the kinds of automobile insurance available in the USA today.
Liability Insurance
Liability insurance is the most basic form of coverage you can get. In most states, it is the minimum legal insurance requirement. While the best car insurance policies go far beyond liability coverage,they will do if you are on a tight budget and don’t have an expensive car. Liability insurance covers the cost of any damage you cause to another person’s property in the course of an accident that is deemed to have been your fault. Liability is usually determined by the insurance company, the police, or a court of civil justice in the worst-case scenario. Liability insurance does not typically cover damage to the policy holder’s property.
Comprehensive Insurance
Unlike liability insurance, comprehensive insurance covers damage to your property. This usually extends beyond the damage caused by car accidents. For example, weather damage, theft, fire, and malfunction are all usually covered in comprehensive insurance plans.
Because of the sheer number of incidents that comprehensive insurance policies cover, there are usually higher costs for coverage of this type. If you are a regular driver with an expensive vehicle, then this kind of coverage is an essential purchase. Repairs to a car are usually very pricey – regardless of the cause. Comprehensive insurance is recommended for any driver that can afford it. Getting into debt over a break-in is a real nightmare.
Personal Injury Protection
Automobiles are inherently unsafe. In the United States, most people have health insurance policies that cover some of the cost of any treatment needed after a car accident. Costs can, however, still be astronomical. Adding personal injury protection onto a car insurance policy can help alleviate these costs. These plans cover the cost of medical treatments made necessary after a car accident – regardless of whose fault the accident was. If you are one of the many Americans without comprehensive health insurance, this kind of automobile insurance is essential.
Gap Insurance
Cars are expensive, and many Americans purchase them on credit. However, while paying off the debt incurred by credit, drivers are liable to pay off any expenses incurred by accidents even though they do not technically own the car. Gap insurance is specifically fabricated for this kind of driver. It ensures against damages even though the car is still being paid off by the driver.