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What are the types of car insurance?

The number of insurance providers offering their services to you can be overwhelming. If you factor in the sheer amounts of policies that are offered from these providers, the numbers can appear downright intimidating. However, your car insurance needs will be determined by the state you live in. The operating system your state follows involving automobile accidents will be either a no fault system or a Tort system. Under the guidelines of a no fault system,  each driver involved in a collision shares an equal amount of blame for the accident. Their insurance company is only responsible financially for the expenses the insured incurs to their vehicle or person. If you live in such a state, you will be required to have personal injury protection insurance and uninsured motorist protection in addition to liability insurance. If your state follows a Tort system, one party of all those involved must be deemed at fault. Their insurance company will then have the responsibility of paying for all the medical expenses and property damage costs incurred by all parties involved in the collision. Residents who live in a Tort state are generally only required to carry liability insurance. However, there are some Tort states that require their motorists to carry uninsured motorist insurance as well. 

Liability insurance and collision insurance are the two most common forms of coverage known among motorists. Liability insurance offers you protection by paying for the medical expenses and property damage repairs of other motorists if you are found to be at fault in an accident. Currently, forty seven states require their citizens to carry some form of this insurance. Liability insurance will not, however, assist you in paying for any damages you may incur in the accident.

Collision insurance is required by law if you own a vehicle with an outstanding loan on it. If you are involved in a collision, this form of coverage will provide a monetary amount toward the repair of your car that will not exceed the current market value of the vehicle. Because of this limitation, many motorists opt to purchase optional comprehensive insurance to act as a supplement. 

Personal injury protection insurance (or PIP) provides necessary monies to pay any medical expenses you or your passengers may have as the result of an accident. Because most people are covered by comprehensive health plans, many motorists do no elect to carry more than the required amount of coverage. Uninsured motorist protection provides for your medical bills and property damage expenses if you are struck by an uninsured or underinsured motorist.

Some research and education can assist you greatly in selecting the amounts of coverage that will be beneficial to you. Make certain you are aware of your state's insurance requirements as they will determine the minimum coverage you must attain. Take stock of your assets and their value, and then you can plan accordingly. Conduct some comparison shopping to find good rates, and then get a policy that truly fits your needs.


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