When it comes to purchasing Auto Insurance, you can choose between two basic types. A minimal insurance policy covers the costs of damages to another party’s property and third-party injuries, but doesn’t cover you or your own. All-inclusive policies cover damage to both your vehicle and any injuries you cause. Many policies have renounce clauses to prevent you from filing claims if you have a DUI or other moving violation. In this case, your policy will only pay if you are found at fault in an accident.
The amount of insurance you buy depends on the state you live in. Liability insurance pays when you’re legally responsible for another party’s injuries or death. Property damage liability coverage pays if you damage someone else’s property. Each type of coverage has a limit. When you purchase a policy, you transfer financial risk from yourself to the insurer, which promises to pay for your losses. Various factors influence your insurability, including your driving record, occupation, number of miles you drive each year, and type of vehicle. You agree to pay a premium and the insurer pays a specified amount for your policy.
There are several ways to obtain auto insurance. Most states require motorists to have some sort of coverage in the event of an accident. You can also choose to take out a non-ownership insurance policy for other vehicles. The latter is a good idea if you only use your vehicle once in a while. If you’re a driver who doesn’t use the car frequently, you can purchase a policy for occasional drivers.
While you don’t need to carry this coverage, you should consider it if you’re a high risk driver. A policy with a high deductible is an inexpensive way to protect yourself from uninsured motorists. Regardless of whether you own a vehicle, you should always file a claim with your auto insurance company if you’re involved in a car accident. You can also file a claim under the policy of a relative.
You should also check your state’s laws. Some states require that you have a minimum amount of liability coverage for bodily injury and property damage. Others require that you carry a certain amount of personal injury protection (PIP) insurance. You should also consider getting a policy with a higher deductible than your state’s minimum. If you do, you’ll have a better chance of obtaining a lower rate for your state.
The maximum amount an insurer will pay in the event of an accident is called the insurance amount. This is the maximum amount that an insurer will pay if you’re at fault in an accident. Insurers base this price on a number of factors, including your driving history, occupation, and annual miles driven. You’ll be paying a premium based on these factors and on the risk you pose. If you’re at a high risk of accidents, you should purchase additional coverage.