Holding The Wrong Form Of Car Insurance Might Land You In Jail

By William Hazelhurst

Car insurance provides protection for the policy holder (generally the owner of the vehicle) from financial loss as a result of a car accident. To benefit from this protection the policy holder pays a monthly premium which varies according to several factors like the driver’s age, the type of vehicle, the driver’s history and the driver’s location to name a few.

There are several different types of car insurance to protect the plan holder from costs arising out of damage to the car, property damage and injury to persons involved in an automobile accident. The various different types of insurance cover include:

Liability cover which pays for damages to other people or their property as a result of a car accident and that additionally covers any court costs involved. In a lot of states this is the absolute minimum required before you are allowed to take a car onto public roads.

Collision cover which provides payment for damage caused to your vehicle in the event of a collision with another vehicle or object.

Comprehensive cover which is designed to pay for various types of damage including fire, theft, vandalism and extreme weather conditions.

Medical cover which is designed to pay for any medical expenses for injuries resulting from an auto accident.

PIP (Personal Injury Protection) cover which pays for medical expenses when injury is sustained in an accident, regardless of whose fault it is.

Uninsured and under-insured cover which pays for damages sustained to you in the event that the other driver involved in an auto accident does not have insurance.

Every state draws up its own rules governing car insurance and some types of insurance will be mandatory in a particular state while others are purely optional. Some states, for instance, only require you to have liability cover while other states require you to have personal injury protection insurance cover.

There are also various states that are referred to as ‘no-fault’ states where insurance policy holders are able to recover financial losses from their own insurance company, regardless of who is deemed to be at fault in a car accident. - 23687

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