In the United States there is a traffic accident every 3 seconds. So it is very important to have an automobile insurance, if you own or ride an automobile. Automobile insurance is an insurance which provides insurance cover against costs incurred by the insured due to traffic accidents. Further it is mandatory for all vehicles in the United States to have an automobile insurance. Let me explain some of the basic facts of automobile insurance.
Coverage: Usually insurance covers the insured party, the insured auto mobile and third parties.
Premium: Premium is the money you pay to the auto insurance company usually every six months for insurance cover. It depends on your age, gender, driving record, type of policy, type and cost of vehicle, usage like commuting or commercial use etc.
Liability insurance: It covers claims against the policy owner and the owner's vehicle. If you drive your car and end up in an accident damaging another person's car and that person, then your car insurance cover will pay for damage to that person's car, medical costs of that person, repair/replacement cost of your car and medical costs to you if you are injured. If you are driving someone else's car then you will not be covered by your insurance. If you want that type of coverage you should buy a non owner's insurance policy.
Comprehensive coverage: Provides coverage for damage to your automobile if it gets damaged due to things like theft, vandalism, animals, weather etc.
Underinsured coverage: If at fault party's insurance is unable to pay damage to your car and your injuries then your own underinsured coverage will pay up the balance.
Rental Coverage: If your vehicle is damaged and you have to pay for rental expenses, then rental coverage insurance will pay the expenses.
Towing insurance: If your vehicle becomes non drivable due to breakdowns, flats etc and costs incurred due to road side assistance such as towing, the expenses are paid by towing insurance coverage.
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