Car Insurance Guide

In the United States, it is illegal in most states to operate a motor vehicle on public roads without valid insurance. Failure to comply with this regulation can cost fines of up to $250 and/or the suspension of a driver license for 2 years. Although this is a stiff sentence, there are other reasons that mitigate for insurance. In the event of an accident, one can be assured of financial recovery if they had valid insurance. Having valid car insurance is part of showing financial responsibility on the road. There are different types of car insurance as we will see shortly.

Liability Insurance
Liability insurance is extremely important and in many states in the United States, it is mandatory. Liability insurance protects the insured against any costs incurred when his or her car damages someone else?s car. Without liability insurance, a driver of a vehicle will end up footing the bill for the repairs of the other party?s car in the event of an accident.

Comprehensive Insurance
This is a more expensive insurance than its counterpart liability insurance. Comprehensive insurance covers the cost of repairing both your car and the other party?s car in the event of an accident. Comprehensive also goes further and pays for the cost of any hospital stays associated with that particular accident. Comprehensive is not mandatory by law but is required if you are leasing a vehicle.

Collision Insurance
In collision insurance, the policy pays for the damage caused to your vehicle in an accident in which you were found to be responsible. This policy pays for repairs and replacement of your vehicle. Collision insurance is also not mandated by law but it essential because it indemnifies even if you are found guilty of causing the accident.

Uninsured motorist
Once in a while, you may find yourself driving a car whose owner does not possess adequate car insurance or even none at all. In such an event, you may take out insurance to protect yourself against any losses that may occur due to an unforeseen accident. This type of insurance is called uninsured motorist insurance.

Personal injury insurance
This the type of insurance that indemnifies in case of an accident that occurs regardless of who is at fault. One downside to this insurance is that it is limited to immediate medical treatment.

Gap policy
This is an insurance policy which one takes to protect themselves against loss which may be as a result of the difference in the value of a leased car and the actual amount owed. This all-too-common scenario occurs when the car that you are leasing is actually worth less in the market than you actually owe. Gap insurance deals with this difference.
There are also other insurance policies that were not mentioned above but are nonetheless very important. One of them is towing insurance. This covers the cost of towing from the place of the accident to a repair shop or location of your choice. Then there is roadside assistance which covers motorists for minor issues like car towing, gas refilling, jump-starts and locksmith services.