Motor vehicle insurance is compulsory in almost all jurisdictions. The minimum liability threshold may vary from place to place as do the stipulated mandatory policy benefits. In most situations, insurance is governed by the law of torts where the liable party provides the compensation meant for the victim’s damages and medical expenses. In other places, no-fault laws carry the day. In such situations, parties file claims that elicit compensation without necessarily determining where the fault lies. Auto insurance coverage characteristics describe damages as pain, suffering, and lost wages, and these are compensated differently depending on the insurance policy of the liable party. The common coverages include liability, comprehensive coverage, personal injury protection, medical, collision, and underinsured coverage.
Coverage Characteristics of Auto Insurance Protecting Against Liability
Liability coverage has these auto insurance characteristics: it is crafted to shield you from the burden of compensating others because of an accident. Such compensation includes both bodily injuries and damage to property. It is very appropriate in states with insurance compensation built on tort laws. This auto insurance coverage takes care of medical expenses, pain and suffering compensation, funeral costs if death arises, repair costs, lost wages, and legal costs that would otherwise come from your pocket.
Auto Insurance Coverage for Other Incidents
Comprehensive coverage on the other hand pays for damage or loss due to any other misfortune except an accident. The coverage characteristics of auto insurance in the comprehensive package take care of natural disasters, vandalism, and theft. This insurance policy, also known as Other Than Collision (OTC), is never a requirement. It does, however, form part of many car loan agreements.
The car insurance characteristics of collision policies describe their limits, which pay for vehicle repairs necessitated by collision with either an object or another vehicle. In situations where the damage is very severe as to warrant a replacement, then this policy is sufficient to ensure that. The law is never explicit regarding picking such a policy, but many car loan lenders encourage or rather insist on customers to hold this policy for their car loan tenure.
Medical and Personal Injury Coverage
The coverage characteristics of auto insurance for policies paying medical and personal injury protection include, among other things, medical and child care expenses as well as lost income. Medical auto insurance coverage pays for the cost of accessing medical attention for accident-related injuries. This coverage provides such access regardless of fault. Some insurance companies model them to cover other family members who may get injured in the same insured car. Personal injury protection (PIP) is designed to remunerate a proportion of lost income, such as medical expenses as well as child care expenses in case you get hurt in the accident. Usually, the policy covers items not necessarily budgeted for and as such are not included in the medical insurance. There are situations where replacement or repair as well as medical costs may not be wholly covered by the other party when that party is at fault. Motorists who have underinsured coverage can invoke this to meet the deficit.