Auto Insurance: A Simple Breakdown

Auto insurance is a protective agreement between an insurance company and a consumer. In exchange for paying a premium, the insurance company protects the individual from financial damages caused by accidents, theft, fire, and weather. Auto insurance is necessary and state-mandated for all drivers of motor vehicles.

Insurance companies allow consumers to pay monthly, every six months, or annually. If the consumer files a claim for damages, then the insurance company will check the coverage, send out an adjuster, and begin the claim fulfillment process. The deductible is an amount that the consumer must pay to the insurance company when filing a claim to pay for part of the damages. The consumer will have to pay their selected deductible before receiving a payout. They will also require repair services from a list of selected businesses in their network.

There are different levels of coverage that consumers can select between including basic, mid-range, and full. Property damage, liability, and medical coverage are required. Comprehensive and collision are optional but are recommended. The basic coverage is typically the minimums set by the state to drive legally. This varies from state to state. Mid-range includes comprehensive and collision but at a higher deductible. Full coverage would be the same as mid-range but with lower deductibles and add-ons such as emergency roadside assistance and car rental coverage

There are many benefits to buying and maintaining auto insurance. The most important aspect is financial protection. Accidents can cause a lot of expensive damage. If the consumer was at fault in an accident, then they would be financially responsible to pay for the other party’s repairs and medical bills. It is a protection against lawsuits. Insurance also offers peace of mind and 24/7 on-call protection. Auto insurance is the best solution to protecting assets and getting reliable help if an accident or other vehicular damages occur.

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