Most people only think that insurance is something they need so they can get their registration and tag so they can drive. It is something that they need because their license will be suspended if they don't get it. It's just a bother to some because people think "I don't get into accidents, I am a careful driver."
Often times people will call for insurance and say give me the cheapest insurance or give me only what is required. Many people don't even know what this insurance coverage this is. A lot of people only really become aware of what coverage they have when they need it, like when they need to make a claim.
When you run into that stopped car or have someone sideswipe your car in a parking lot while you are shopping, suddenly having only the coverage is required by law may not be the best thing to have. You should always have as much insurance as you can afford to carry. Having too little is never good and if you have insurance you cannot afford is not any better. A policy that is cancelled due to non-payment does you no good at all.
Lets take a look at the state I am familiar with - Florida. Florida is a no-fault state. What does this mean? Well, if you have the proper state required coverage you will be protected by the no-fault law. If you are in an accident whether you are at fault or not at fault you will go through your own personal injury coverage for your medical expenses for the first $10,000. If you do not have at lease state minimum insurance then you will not be protected and may be subject to paying for the injuries of the other people you hurt in the accident.
There are many types of coverage to purchase and meet your insurance needs. Every coverage has a purpose and all are good to get.
Florida state minimum insurance is Personal Injury Protection and Property Damage. Personal Injury Protection or P.I.P. covers your medical, hospital and funeral expenses up to its limits. It also covers others in your vehicle and pedestrians struck by your car. You are covered for up to $10,000. There also may be a deductible. This can be 0, 250, 500 or 1000 deductible. A $1000 deductible being the minimum in Florida.
Property Damage liability covers if your vehicle damages another person's property. This could be their car, house, motorcycle, etc. Limits for this are $10,000, $25,000 or $50,000. The Minimum in Florida is $10,000.
Another valuable coverage is Bodily Injury Liability. Bodily Injury covers other people's injury or death that you are responsible for up to the limits you purchase. This is not required by Florida for state minimum insurance, but it would satisfy another law called the Financial Responsibility law. This law states that if you are not financially responsible at the time of and at fault accident where someone gets injured or property damage occurs, your license may be suspended. At this point you may be able to get your license back by filing an Sr-22. This form shows to the state you are now carrying Bodily Injury Coverage and are now financially responsible. Usually you must carry this for 3 years with no lapses in coverage.
Another common insurance people ask for is Full Coverage. This is not an insurance coverage and means a different thing with every company you call. Most people only know that their car dealer or bank wants Full Coverage so they ask for it. Comprehensive and Collision is what these companies are looking for. Collision covers repairs when your vehicle hits or is hit by another vehicle. If it is destroyed it will also pay up to the book value of the vehicle at the time of a loss. Comprehensive covers for loss caused by other circumstances other than a collision. Some examples are theft, flood, fire or animal damage. This will also cover total losses up to the book value of the vehicle.
Other types of coverage available are medical and Uninsured Motorist. Medical covers medical costs to you and your passengers injured in an accident. Uninsured Motorist covers injuries to you and your passengers when the other person in the accident is at fault but does not have insurance or does not have enough insurance.
What is Car Insurance?
Car Insurance is compulsory in the UK. You are required by law to have a policy to cover your liability to other road users.
The Road Traffic Act requires all motorists to be insured against their liability for injuries to others (including passengers) and for damage to other people's property resulting from use of a vehicle on a road or other public place. It is an offence to drive your car or allow others to drive it without insurance.
Owning and driving a car means taking on many risks to yourself and others. When a traffic accident happens, damage, injuries, loss or all of these factors may be inflicted upon you and others. Damage and loss of your property may also occur. Fire, theft, vandalism and natural disasters are other possible risks.
Car Insurance protects motorists and drivers against liability in the event of accidents they may cause. It can also provide cover for the motorist's own vehicle.
Car insurance is what safeguards you against loss due to traffic accidents, thefts or other reasons. Taking out car insurance is very important as insurance is what secures you from economic loss or damages. In case you do not have car insurance and you are involved in an accident, in spite of who is at fault, you will be paying the compensation concerned with damages. Car insurance is designed to protect yourself and others against these risks.
Many different types of cover are available, ranging from third party cover which protects individuals against liability should they injure a third party or cause damage to a third party's property, but does not provide any cover for the individual's own vehicle or property, through to comprehensive cover, which can offer protection for accidental damage, theft, fire damage as well as liability towards third parties. The minimum legal requirement for car insurance to drive in the UK is Third Party Only, Car insurance is a contract between you and the insurer, specifying each party's rights and obligations. Essentially the car insurance company promises to provide specific coverage for you in return for your payment of the car insurance premium.
It is vital to know what your car insurance policy covers. It could be a complete and comprehensive policy that covers you for all risks that might be surrounding your car. The basic requirement is that in the event of an accident, you are covered for the compensation that you may have to pay for injury to other people and their vehicle. This is an amount that could run into several thousands which will be covered in the car insurance policy.
There are two main types of car insurance policies available in the UK :
Third Party
Third party insurance covers the insured when driving on private property as well as on public roads. This policy offers protection against legal liabilities as well as covering third party claims.
Comprehensive
Comprehensive insurance cover is the most popular form of cover, the most important addition being accidental damage cover, where policyholders can get their own vehicle repaired in case of damage. For people who want to be covered against as many risks as possible, then comprehensive policies is the solution.
You should read your car insurance policy carefully to ensure it gives you the level of cover you are seeking. There should be no small print or difficult language in modern insurance policy documents. If you are unsure about what the policy does or does not cover then just ask your insurer or insurance adviser to explain.
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