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Auto Insurance:
An auto insurance policy serves as a contract between you and your
insurance company. You pay a premium (calculated monthly,
quarterly or annually), and in exchange, the insurance company
promises to pay for agreed upon financial and property losses during
the term of the policy. You may have to pay the initial
portion of these losses, based upon the amount of your deductible
(your portion of a covered loss, based on your selected policy).
What kind of coverage do I need?
When selecting automobile insurance, you will need
to consider coverage in the even of a collision or theft, as well as
liability. You will also need to review the ages, driving
histories, gender and, in the case of teenagers, grades of all
household members who drive. Some insurance companies will
lower the rate for their premiums if teenagers can provide evidence
of good citizenship and scholastic success. Rates also may
drop if multiple insurance types are purchased from the same
insurance company. Finally, you must consider the requirements
of the state in which you live and meet requirements of the law.
Types of Auto Insurance Coverage:
Collision: pays for damage to
your vehicle caused by a collision with another vehicle or object,
with the exception of animals.
Comprehensive: pays for loss of or damage to your
vehicle caused by fire, flood, hail, theft, vandalism,
windstorm/sandstorm, or impact with an animal.
Liability: pays for accidental bodily injury and
property damages to others when a covered driver is legally found to
have caused the harm. Coverage can include medical expenses,
lost wages, and other damages, including pain and suffering, loss of
use of damaged property, legal defense and court costs.
Personal Injury: pays medical expenses for the
injured, for treatment due to an auto accident, regardless of fault.
It may also replace lost wages and services, such as childcare
expenses, and pay for rehabilitation. Some policies include
funeral expenses.
Uninsured or Underinsured Motorist: pays damages
when a covered person is injured in an auto accident caused by a
driver who does not have liability insurance or who is underinsured.
Rental Reimbursement: pays for a car rental
when yours is disabled due to an accident.
Emergency Road Service: pays towing fees incurred
as the result of a breakdown.
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