A car insurance policy is a contract between you and an insurance company. You pay a premium and in exchange, the insurance company promises to pay for specific car-related financial losses, within the selected coverage limits, that you may have during the term of the agreement.
It is required in most states that you carry automobile liability insurance in certain minimum amounts. If you are at fault in an accident the law requires that you pay the damages sustained by the person who is not at fault. These can include property damage, which is the cost to repair or replace any property that you have damaged.
These can also include damages for personal injuries, which include not only the other person’s medical expenses and lost wages but also damages for pain and suffering, permanent injury, and loss of enjoyment of life.
Having a car insurance is essential to you because these damages can cost thousands of dollars. There are four types of coverage. These coverages include: Liability Coverage, Medical Payments Coverage, Uninsured Motorist Coverage (Underinsured Motorist Coverage) and Coverage for Damage to Your Auto (Comprehensive and Collision).
