Understanding Auto Insurance Basics- What You Need to Know

Buying auto insurance is critical task unless you know the basics of auto insurance; otherwise you have to end up unnecessary costs and expenses. Choose insurance for auto which fits yourand your family’s needs. Here are the answers of few basics questions like what isauto insurance,  what does auto insurance cover, what does an auto insurance policy consist of.

Auto Insurance Basics
Auto Insurance Basics 

What is Auto Insurance?

Auto insurancealso known ascar insurance isinsurancewhich is purchased for vehicles such as cars, trucksandmotorcycle. The purpose of auto insuranceis to provide financialprotectionagainst auto damages and bodily injured which may cause autoaccidentor traffic collisions.

Insurance for autois the contract between the auto owner and the auto insurance companies. The auto owner pays a certain amount of money or premium and the insurance company provides a set of coverage the auto owner selects.

What Does Auto Insurance Cover?

Auto insurancecovers mainly four basic incidents. The first coverage is for the damage of your car, the second coverage is for the damage of other’s car which is if you accidentally damage another car, and your auto insurance company covers this liability. The third coverage is coverage for medical expenses and the forth is coverage for uninsured motorist which is if anybody without having enough auto insurance policy injures you or your family, your insurance company will cover this.

What Does An Auto Insurance Policy Consist of?

Auto insurancepolicy consists of three main parts; base policy, declaration page and endorsement page.
Base Policy: this part has the fundamental provision of the auto insurance policy and the responsibility of the both insurance company and auto owner. This page setliability on the insurance company to provide financial protection and on the car owner to telling to the company when the owner faces in accident.

Declaration Policy: this part forecloses the information about the car owner such as the policy holder’s name, policy number, policy limitations, policy liability and premium. Declaration page also has few things such as which vehicles are included intocar owner’s policies, who can damage the car and who are allowed to drive.
Endorsements: endorsements have the power to alter the base policy such as to edit, boarder, and limit or add the coverage.

It is auto owner’s responsibility to read carefully these three parts of auto insurance policy, otherwise policy holder will be fully responsible if anything don’t fit with the policy.

Auto insuranceis necessary and you need to buy insurance for your auto if you buy a new one. So understand the basics of auto insurance, read the coverage which fits you and buy a policy.