A car insurance policy is an accord between an individual and the automobile insurer. The insured pays a fee as insurance and the insurance company, in turn, promises to pay for vehicular losses accrued as long as the policy is in effect.

Auto insurance is compulsory in most states. There are different types of benefits or coverage.

Some of the components of automobile insurance are bodily injury liability, property damage liability, medical payments coverage, uninsured or underinsured motorist coverage, comprehensive coverage, and collision coverage. A typical policy features the six types of coverage listed above.

Bodily injury liability covers legal costs and personal injury claims filed against you if someone is killed or injured in your automobile and you are found to be at fault. Property damage liability deals with legal costs and other damage claims, in case there is damage to another person’s property by means of your vehicle.

Medical payment coverage assists in paying medical costs, even if the insured individual is hurt in somebody else’s car. Uninsured or underinsured motorist coverage protects against costs incurred as a consequence of an accident that is triggered by another person who is either uninsured or who has inadequate insurance coverage.

In comprehensive coverage, insurance is for vehicles that are damaged because of theft or natural calamities. Here, the insurance amount is paid for repair or replacement of vehicles.

Collision coverage is mainly for vehicles in which damage occurred due to collision with other vehicles, objects, or even persons.

Auto insurance policies allow premium discounts for theft devices or for owning more than one policy with the same insurer. An added advantage is the provision for extending coverage to others driving your car with your permission.

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