Do you Know the Purpose of Auto Insurance?

Nowadays, transportation is very convenient and people can choose various means of transportation to reach their destinations, such as cars, planes and trains. However, the most widely used means of transportation in daily life is the car, so auto insurance has become a necessity for those who own a car.

What is auto insurance?

Auto insurance is a way to protect yourself in a financial form. When you are involved in a car-related accident, auto insurance can help you pay for the unexpected costs associated with the vehicle for which you have auto insurance.

Common types of auto insurance.

1,Bodily Injury Liability Insurance: If you are at fault in an accident, bodily injury liability insurance will pay for the other party's medical expenses. For example, if you are speeding and hit another car and the driver or passenger in the other car is injured, your bodily injury liability insurance will help you pay for the medical expenses of the injured person in the other car, depending on your policy coverage.

2, Property Damage Liability: If you are at fault for property damage, then property damage liability insurance will pay for the property damage you cause, but not your own property damage. For example: if you hit a street light on the side of the road, then once the city has assessed the damage to the light and determined what it would cost to repair it, then property damage liability insurance will provide you with the ability to pay for the cost of repair, depending on the limits of coverage you have purchased.

3, Collision Coverage: Collision coverage will pay for repairs to your vehicle whether or not you are at fault in the accident. For example, if you collide with another vehicle and your vehicle is damaged, collision coverage will cover the cost of repairs to your vehicle based on the actual cash value of your vehicle, less your deductible.

4，Personal Injury Protection: Regardless of whether you are at fault for the accident, Personal Injury Protection will pay for the medical expenses of you and your passengers in your vehicle. For example, if you are struck by another vehicle while driving and you break your leg and need money to heal your leg, your bodily injury insurance will cover the cost.

How much auto insurance you need depends on your individual needs, but you must have the minimum type of coverage required in your state to be able to legally drive a car. However, state minimums are usually very low, and it is easy to exceed the limits of your insurance coverage in the event of an accident, resulting in high out-of-pocket expenses. Therefore, it is recommended that you purchase a slightly higher insurance policy to reduce unnecessary out-of-pocket expenses in the event of an accident.