Home »
Help Guides »
High Risk Drivers »
How Car Insurance Works.
In most places, car insurance is a requirement of the law. In addition, every insurance company offers optional coverage ranging from a lower deductible to a free rental car if yours gets damaged. But how does car insurance work?
Car insurance coverage can be broken down into 8 main categories:
Liability: Protects you from damage to other individuals or properties. Medical and legal expenses are covered as part of this.
Collision: Protects against damage to your vehicle.
Comprehensive: Other damage caused by natural forces, theft, etc.
Medical Coverage
Personal Injury Protection
Uninsured Motorist: Pays damage to your car, even if other driver is uninsured.
Underinsured Motorist: Pays damage to your car, even if other driver is underinsured.
Rental Reimbursement: If your car is damaged, covers a rental vehicle.
The cost of your insurance will be a balance between the type of coverage you have chosen, combined with the risks in your area and the value of your vehicle. If you live in a low risk area, choose minimal coverage and have an older vehicle, your insurance will be very inexpensive.
If, however, you live in a higher risk area, even having a cheap car and the lowest possible coverage can be very expensive.
Knowing the reasoning behind insurance can help you to make smart choices about your insurance coverage. If you have questions, talk to your insurance agent.
|
