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What to Know about Car Insurance in the USA

What to Know about Car Insurance in the USA

Whenever you buy a car in the United States, you should not forget to apply for designated motor insurance which helps protect you from financial liability in case you, your passengers, and your car are involved in an accident. Today, car insurance is considered a must, however, some states may deprive you of it including Virginia, New Hampshire, Mississippi, where you may pay the fee directly to the state. Let’s get into details.

Car Insurance Profile

Car insurance is basically a contract between a car owner and an insurance company. Every month, one pays a fee to the insurer which is also called a premium, so that in the case of any theft or accident, you receive financial support taken from previously funded premiums to cover the expenses.

Car insurance carries several purposes including property and medical coverages. Property coverage is related to damage your car might incur, including fire damage, hail, and vandalism, or actual theft of your vehicle. Medical coverage serves to help you with the treatment of injuries resulting from an accident as well as funeral costs. Beyond that, there are such divisions of underinsured/uninsured coverages.

Uninsured coverage helps you cover medical expenses, or repairs of a car if you are hit by a driver who does not carry any insurance. Underinsured coverage is useful in events when you are hit by a driver whose insurance is limited in liability, hence, he won’t have enough money to cover your medical expenses.

All the mentioned coverages may be optional or mandatory depending on the state where you buy your car. In addition to that, they may greatly vary in prices and types. For more information you may check with the following article, – how much is commercial auto insurance?

To ensure the utmost protection when driving a car, insurance companies went even further by adding the option to apply for such coverages as rental coverage, ride-sharing coverage, gap coverage, and glass coverage. When consulting your insurer, you might want to ask which one is fit for your particular driving case.

Expenses not Covered with Your Car

There are events when you should not expect to get coverage for your vehicle. All of them are typically mentioned in the contract between you and the insurer and may be discussed upon signing the agreement. If you want to expand the coverage of your insurance or make some exclusions from the list below, you may do it by paying an extra premium. Otherwise, you should stick to coverage that solely deals with particular needs, like commercial car coverage.

The exclusions from your coverage will typically include the following.

  • You failed to renew your car insurance on time (usually it has validity for one year).
  • You drove a car under the influence of alcohol or any illicit drugs which led to a car accident.
  • Your car was used by a friend, relative, or any other person who did not have a valid driving license.
  • Your engine was damaged due to an oil leakage.
  • You violated the car manufacturer’s guidelines when driving which resulted in an accident or damage.
  • Your car received damages as a result of war, radiation, or terror attacks.

These are common risks mentioned in the standard insurance plans. To learn more about all possible non-covered expenses, consult the insurer.

Finally, you should understand that insurance coverage does not apply to damage incurred in the event that you use a personal car for commercial purposes, such as taxi services, or delivery. If you plan to do this with your car, you may either stick to commercial car insurance or expand the capabilities of your standard coverage by paying an extra premium.

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by Harvey Carr // Harvey Carr is a contributor to Businessing Magazine.

Opinions expressed by contributors are their own.