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If someone owns a car, they are more than likely to have car insurance: protection that a driver has in case of an accident or theft of the vehicle that he or she owns. In case anything were to happen to that car, truck or Sport Utility Vehicle, car insurance is padding from going into debt trying to pay for damages caused by an accident in which a person was at fault and any medical costs for himself and any passengers who may have been injured during the accident.
A basic insurance policy includes six portions of protection, each priced separately to come to a final premium which his paid monthly, every six months, or once a year in a lump sum. The first piece, bodily injury liability, applies to the person whose name is on the policy (policyholder) and covers any damages caused to someone else's car. Bodily injury liability also covers you and family members listed on your policy if driving someone else's car with their permission.
Let's say you are injured in an accident. The second part, medical payments or personal injury protection (also referred to as PIP) will pay for treatment for the driver and any passengers in the car of the policyholder. PIP can cover wages lost due to inability to work, medical bills for hospital stays, surgeries or X-rays, and, in some cases, will even cover funerals.
In case you or someone you allowed to drive your car crash into something that someone else owns, it will be covered under property damage liability, the third piece of coverage. While it usually means damage to someone else's vehicle, it also covers mail boxes, fences, telephone poles, lamp posts, sign posts, and other buildings hit by your car.
Fourth is collision, followed up by comprehension. Collision pays for damages caused by colliding into another vehicle, while comprehensive will reimburse any loss to your vehicle that is by natural causes and not a collision with another vehicle or object, such as fire, hail, flood, and earthquakes. Collision insurance will cover damages to your own vehicle even if you were at fault for the accident. Both comprehensive and collision insurance are sold with a deductible; collision generally starts at $250 and can span up to $1,000 and comprehensive insurance ranges from $100 to $300. The higher the deductible, the less you'll pay out of pocket. In most cases, cars that are being financed must be covered under comprehensive and collision through the entire loan period.
Rounding out a basic car insurance policy is uninsured and underinsured motorist coverage, a way to cover yourself in case involved in an accident where another driver is at fault. If their car insurance policy doesn't provide enough money to cover damages to your vehicle, then your policy will kick in. This part of coverage also encompasses hit and run accidents where the other driver leaves the scene of the accident, and in accidents if hit as a pedestrian.
In most states, car insurance is required in order to drive legally. It helps to protect the people and things that are important to you as the driver. Without it, a person could be sued for thousands of dollars for damages or even have to pay for the funeral of a loved one without any assistance.