Car Insurance Fundamentals
A Insurance Article Contributed by Ajishnu Sharma
Introduction to Car Insurance
Car insurance policies are some of the most important policies that you can have today. Insurance policies have become an indispensable part of modern life today. There are various kinds of insurance policies - life insurance, car insurance, medical insurance, etc. In this article we will talk about car insurance - what car insurance basically is, why it is important for a person to have car insurance, and at least one situation that a car insurance policy covers.
What is Car Insurance?
Car insurance or auto insurance, as it is also commonly called, is a form of insurance that helps a person cover the costs incurred in the event of an accident. It is a very important insurance policy to have. A car insurance policy is usually taken out at the time of purchase of a vehicle. A car insurance policy is an agreement that you enter into with the insurance company. You take out a policy for a certain amount of money. Then you pay the premium and also some amount of money at fixed intervals of time, usually monthly.
Car insurance is very useful to have, especially if you end up in an accident. Imagine the following scenario. You are driving your car. You get distracted, lose control, and ram it into another car. The victim will, nine times out of ten, file for damages and compensation. Now if you had not taken out an insurance policy on your car, you could be in big financial trouble. The more serious the accident, the bigger your financial worries. If, however, you had taken out an automobile insurance policy, the insurance company will take care of the financial side of your problems.
Liability Coverage and Car Insurance
This kind of car insurance is called liability insurance coverage. Liability coverage, as you know now, saves you from, at the very at least, a hole in your pocket and all the hassles and tensions that come with trying to raise a large amount of money in a short period of time. If you do not have liability coverage, you are on your own as far as paying damages to the victim is concerned. Liability coverage basically consists of two policies - bodily injury liability and property damage liability.
The bodily injury part provides you an insurance cover to take care of the costs that you might have to pay for injuries caused to your accident victim. The property damage part of this policy helps you take care of the costs you might incur as payment for damage caused to your victim's property. The term 'property' here is not restricted to the victim's car alone. Property could be a car, a house, a gate, a street light - any physical property belonging to the victim that you might have damaged.
Finally, this is just one type of insurance cover. There are different types of insurance covers for you, as a car owner, to choose from. In fact, insurance policies nowadays offer schemes that cover almost all eventualities related to an automobile accident. It is, however, advisable to choose your insurance policies carefully, and ensure that you cover all bases in the event that you are in an accident.
