Car Insurance is also known as auto insurance or motor insurance. In broader sense car insurance is also known as vehicle insurance which can be purchased for cars, trucks and other types of vehicles. The primary purpose of car insurance is to provide protection against all looses that occurs during traffic accidents and it also provides protection against liability that could be incurred in an accident.
Minimum level of car Insurance each motorist required to carry depends on individual state law. Liability insurance covers all the claims against the policy holder. When you drive a car or any vehicle which is not owned by you then in that case you are covered by the owner of the vehicle’s policy. Non owners policies may be offered that would cover any vehicle the insured person drive. When you rent a car and if you have full coverage of comprehensive policies then it is also applied to the rental car. If you are paying via Visa or MasterCard then the card provide supplement collision damage coverage to the rental cars but there are some restrictions so please check this beforehand.
Liability part of car Insurance is the amount coverage for the damage by the insured driver during the accident. For example if the driver while driving the car damage a side of a house during the accident then the liability coverage will pay for the damage up to the liability amount.
Collision part of car Insurance is the amount coverage for the damage of the car during accident for the insured person subject to a deductible. The main purpose of this coverage is to pay for repair of the damaged vehicle or pay cash value of the vehicle if it is not repairable. This coverage is optional.
Comprehensive part of car Insurance is the amount coverage for the damage of the car other than accident for the insured person subject to a deductible. If the car is damage in fire or vandalism or if there is a loss due to theft or weather or impacts with animals then this coverage is used. The main purpose of this coverage is to pay for repair of the damaged vehicle or pay cash value of the vehicle if it is not repairable or if it is lost. This coverage is optional.
Loss of use
If the insure vehicle is unusable then during the time the vehicle is repaired then the loss of use coverage of car Insurance covers the rental car expenses.
Uninsured or underinsured coverage
If during the accident the at-fault party either does not have car insurance or does not have enough car insurance to cover for the loss then your car insurance company acts as at fault party’s car insurance company.
Loan payoff or Lease payoff
If the value of the car is less than the amount owe by the loan then this negative equity is covered by this part of car insurance coverage in case the vehicle is beyond repair during an accident or any other non-collision loss.
Towing or Roadside assistance
Tow and other roadside assistance during accident are covered by other coverage but if there is towing and other roadside assistance due to non-accident related to breakdowns, flat tires, gas outs then this part of car insurance coverage is used.