The concept of auto insurance revolves around protection to the insured against losses involving his automobile by offering different coverages depending on the needs and wants of the insured. Auto insurance is a part of general insurance or non-life insurance, and is considered to be one of the most common forms of general insurance.
Primarily an auto insurance is a combined structure of seven coverages, and all these coverages has their own separate premium.
A policyholder pays exactly the total amount of all these separate premiums.
The Seven Primary Auto Insurance Coverage are for :
Bodily Injury Liability: Provides protection if the policyholder injures or kills someone while driving. This liability only covers injury to people but no coverage is there for the vehicle. At the same time, this coverage provides as a legal defense where the another party, involved in the accident files a lawsuit.
Medical Payments, No-fault or Personal Injury Protection Coverage: Pays medical expenses of the injured persons(driver and passengers). Claim can also be made if the policyholder, as a pedestrian, is injured by a vehicle.
Uninsured Motorists Coverage: Provides coverage for injuries caused by an uninsured driver and some times for the policyholder’s damaged vehicle too ( in special circumstances).
Comprehensive Physical Damage Coverage: Pays for losses due to flood, fire, theft,etc. This is not a coverage for collision
Collision Coverage: Insures the vehicle against any type of collision.
Property Damage Liability: Protects the policyholder at times, when his vehicle damages somebody else’s property. At the same time, this coverage provides as a legal defense where the another party, involved in the accident files a lawsuit.
Rental Reimbursement: Covers the rental vehicle under special circumstances.
Mechanical Breakdown Insurance and Emergency Road Service are extra coverages one can avail by spending a bit more on the premiums.
Some auto insurance companies are:
GEICO Car Insurance
Compare Auto Insurance
Metropolitan Life Insurance Company
AIG North America
AIG Specialty Auto