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What does vehicle insurance cover?

Automobile insurance can cover a variety of events dependent upon what you need from your coverage. The underlying principles behind the purpose of car insurance allow for the covering of medical expenses or property damage repair costs that may be incurred due to an automobile accident. There are numerous forms of coverage available to a motorist, and each form of coverage has a unique purpose. The absolute minimum amount of insurance a motorist can have is a liability policy. Currently, forty seven states dictate that you must maintain some variation of liability coverage. The required monetary amounts you must have for your policy will vary state to state.

As mentioned, liability insurance is the most common form of coverage required by most states. This form of coverage is split into two sections: bodily injury protection and property damage protection. Bodily injury protections provides monetary coverage for the medical expenses another party may incur if you are found to be at fault in an accident. The maximum amount that your insurance company will spend towards these costs are dictated on your policy. Property damage protection will provide monetary compensation to a third party for the costs associated with the repair of their vehicle. This coverage is not limited to vehicles. If you strike someone's mailbox, for example, your insurance will pay for the cost of replacing the mailbox. If your insurance coverage is not sufficient to cover the total balance of the costs incurred in an accident, you will be held liable for the remainder of the balance. For this reason, it may be prudent to consider raising the coverage amounts in a policy when you are purchasing car insurance. 

Collision insurance is the second most common form of car insurance for a motorist. It is required by law for you carry collision insurance if you own a vehicle with an outstanding balance on it. This form of coverage will assist you in paying for the cost of repairs to your own vehicle. However, the monetary amount an insurance company will provide you for repairs will not exceed the current market value of your vehicle. For this reason, many motorists opt to purchase comprehensive insurance as a supplement to traditional collision insurance. Comprehensive insurance will pay for the full amount of repairs to your vehicle as well as for damage that may be incurred due to an act of nature or a crime. Examples of these two situations include tornados and vandalism. 

For motorists in states that follow a no fault system, you will be required to carry two additional forms of coverage: uninsured motorist liability and personal injury protection insurance. Personal injury protection insurance provides money towards the cost of immediate medical attention you or your passengers may require. Uninsured motorist coverage will provide compensation for you if you happen to be struck by a hit and run driver or by a motorist who has no coverage for the costs of damages. Each different form of coverage can be beneficial to you in some manner. Education about your state's requirements will assist you in factoring what your needs are.


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