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Auto insurance also called motor vehicle insurance or automotive insurance is a contract between you and an insurance company. You pay a premium and in exchange the insurance company protects you against specific auto-related financial losses as outlined in your policy. The insurance coverage depends on various factors such as the vehicle’s make and model, the general condition and its value.

Auto insurance is required in almost all states. Drivers must maintain a mandatory minimum insurance in case of an accident or injury to another person or property. If you do not maintain coverage, you could be in violation of the law. There are a few states that do not require you to purchase car insurance but instead you will have to show evidence of financial responsibility in some other way like a surety bond, a certificate of self insurance or a cash deposit with the state.

There are many specific forms of auto insurance that vary in the kinds of risk they cover and also the legal principles that underlie them. These include: Liability Coverage, Comprehensive and Collision Insurance, Medical Payments Coverage and Uninsured/Underinsured Motorist Protection and more. Let us go in detail on different types of coverage that are available.

It is sometimes called liability car insurance or auto liability insurance. This is the most common type of insurance. A minimum liability requirement is legally required in nearly every state to pay for damages caused to others in the event of an at-fault accident. It is intended to protect drivers from property damage or personal injury claims that arise out of the ownership, maintenance, or use of an automobile.

Unless specifically restricted by your auto insurance policy you will have liability coverage while driving any car, van or pickup as long as you have the owner’s permission to use the vehicle. A person who is driving your car, van or pickup with your permission will also be covered.

When the policy is issued, you will choose the limits of liability that you require and will determine the maximum amount that we will pay in the event of a loss. If the injuries and damages are severe then you might end up by paying for them out of your own pocket. Therefore, we recommend that you get additional coverage to protect yourself and your passengers in case of an accident.

Collision coverage reimburses you for damage caused to your vehicle when it collides with another vehicle or object (for example if you hit a tree, guardrail or a pole). It also covers the damages caused to your car from potholes or from rolling your car.

Standard collision coverage will reimburse you for any repairs up to the fair market value of your car. It usually comes with an insurance deductible. The higher the deductible you pay the less the collision coverage will cost.

Comprehensive Insurance is also known Other Than Collision (OTC). It is not accident-related and provides coverage for direct physical damage with things other than collision. It pays for damage to your vehicle from natural disasters like a tornado, hurricane, flood or hail. Other examples are theft, fire, contact with an animal, vandalism, falling rocks or trees and other hazards- even getting hit by an asteroid!

Like collision coverage comprehensive coverage will pay up to the fair market value of your vehicle(less than the insurance deductible). Although comprehensive coverage is not legally required by any state, you may need it if your car is financed.

Glass coverage is a part of comprehensive coverage and provides coverage from windshield damage. Some auto policies also include no-deductible glass coverage, which includes rear windows, side windows and glass sun-tops. Or you can choose to buy supplemental glass coverage to avoid having a deductible in the event of a claim.

Medical payment insurance or personal injury protection (PIP) provides reimbursement for medical expenses that you or your passengers incur as a result of an automobile accident. It covers the cost of treating injuries, rehabilitation and sometimes also covers other related expenses like lost wages and funeral expenses.

When your policy is issued you will choose a coverage limit. The coverage limit you select will be the maximum that will be paid to each person in connection with a single accident.

Though liability coverage is mandatory and often required, there are many irresponsible drivers who do not have auto insurance.

Uninsured motorist coverage will provide coverage for damage to your property and injuries you sustain in the event of an accident by an uninsured motorist. It will cover you and your passengers occupying an insured automobile.

There are times when your damage exceeds the limit of a liability insurance of the person who causes an accident. This is called underinsured motor-coverage as it covers the costs of a serious accident when the other driver lacks adequate coverage. The limits for this coverage are the same as that you selected for liability, although you can choose lower limits too.

Even if PIP and underinsured/uninsured coverage are optional in your state you should consider adding them to your policy for greater financial protection.

Auto Insurance can be confusing, but we at ChaCha Insurance would be happy to ensure that you have the ideal auto-insurance policy at the best price.

Request a quote and let us help you explore the options and find the right coverage.