How Does Car Insurance
When you had your first car, purchasing car
insurance policy is done automatically. You may never give it much thought nor did you really care about how
can insurance works. Maybe you even purchased the next most affordable car insurance you can find without
really thinking about the whole benefit you can avail from these car insurances. So how does car insurance
works? Are there special processes involved in this? If you want to know how, then I recommend that you read
First of all, understand the types of car insurances.
Understanding how car insurance works begins with the different types of coverage and the kind of coverage
your policy has. Understand that all car insurance policies have liability coverage. This means that this
coverage pays the costs of damage or injuries you cause to someone else or to other vehicles in the event of
an accident. Liability coverage is usually required in every state by law. Another type of coverage is the
collision coverage. This coverage pays for the damage caused to your car in a collision even if it was your
fault. Collision coverage can also be used by other drivers with whom you gave the authorization to drive
your car. Besides the liability and collision, we also have the comprehensive coverage. This type of coverage
covers the damages to your vehicle such as theft, vandalism, damaged caused to your car when it is parked,
natural disasters and others. All of this will be covered under comprehensive coverage.
These are the three basic types of coverage that car insurance
offers. You can also have additional coverage like medical payments that allows you to pay your medical bills
of people in the event of injury during an accident. There is also what we call the personal injury
protection or PIP. This helps cover lost wages and other expenses and this is usually popular among uninsured
or underinsured motorist coverage. This will help pay for repairs to your car if someone else is driving
Your car insurance policy has a deductible too. This is when you
pay the amount of expenses out of your own money before you receive money from your insurance company. If you
raise your deductible, you can avail of a much lower premium. Insurance policies also have limits or what
they call as policy caps. For example, your policy may cover up to $30,000 in damage to your car and $50,000
in medical coverage. Though this vary in every state, it is best that you talk to your car insurance company
about this. Take note that the lower the cost of your policy caps, the lower your insurance will also
So how do insurance pays after an accident? If you had an
accident, your car insurance will help cover the damages done to your car. They will send an adjuster to
investigate the damage and you will be given instructions on how to get an estimate on the cost of repairs.
Once the estimate is done, they will send you a check to use and pay for the repairs. If the accident caused
injury and you require medical attention, your medical bills will be forwarded to the car insurance company.
And it will be the company’s responsibility to pay your medical bills until your treatment is complete. Keep
in mind that having car insurance is necessary. Having a better understanding how they work will also help
you choose the best one to fit your needs.