NBGS ONLINE
Everything you wanted to know about insurance products … but were afraid to ask.
© NBGS Online 2010

How Car Insurance Works

Auto insurance is meant to provide protection from financial difficulties to vehicle owners, drivers and passengers after any vehicle related incident such as an accident. Every state mandates drivers to have auto insurance or some other kinds of proof of financial responsibility. Knowing and understanding why insurance (though confusing at times) is required and how it works is important and will aid you in finding the right coverage at the best price. Car Insurance Requirements The requirements for car insurance differ with states and proving that one is able to pay for any damages done in an accident is a necessity and is known as proving financial responsibility. Auto insurance is the simplest way this requirement can be met, though some states permit drivers to prove they are capable by posting a certificate or bond. You should visit our Car Insurance section to get information on the different types of auto insurance coverage your state requires. Benefits of Car Insurance Formerly, before car insurance became widely mandatory, victims of car accidents got no compensation. And if a victim sued the at-fault driver, the driver paid large sums that could have financially crippling effects. The car insurance states require from drivers gives them protection from the large costs associated with accidents. This enables the victims of any car accident pay for either medical or funeral expenses and even repair a damaged property without having to do so from their pockets. It also enables the at-fault driver cover the cost of most damages without having to lose huge amounts in lawsuits. Knowing that you will be financially covered in the case of an accident because of car insurance can give you some peace of mind. Types of Car Insurance Liability insurance, where the victim’s damages are covered is the most legally required insurance but there are so many other types of coverage where additional protection is offered both drivers and passengers from the costs of property damages and injuries. They include:  Collision coverage: this covers any damage to your vehicle from a traffic collision. Comprehensive coverage: after any incident that is not accident-related, this pays for property damage. Underinsured/uninsured motorist bodily injury coverage – pays for your expenses if you get hit by anyone without any or insufficient insurance. Underinsured/uninsured motorist property damage coverage – covers any damage to your property in the event that you were hit by an underinsured or uninsured driver. Medical expenses payments coverage – this enables you cover your passengers’ and your medical expenses irrespective of who was at fault. You should visit our Coverages section to get more information on the different coverage types on the market. Certain factors have been found by car insurance carriers to statistically affect your chances of being involved in an accident. These are used in determining your premiums and include, but are not limited to: - Your credit history - Your occupation - Number of miles you drive monthly/yearly - The make, model and year of your vehicle - Your gender, age and marital status - Your driving record - Accidents, DUIs, tickets, and others make you riskier to insure.
Car
NBGS ONLINE
Everything you wanted to know about insurance products … but were afraid to ask.
© NBGS Online

How Car

Insurance Works

Auto insurance is meant to provide protection from financial difficulties to vehicle owners, drivers and passengers after any vehicle related incident such as an accident. Every state mandates drivers to have auto insurance or some other kinds of proof of financial responsibility. Knowing and understanding why insurance (though confusing at times) is required and how it works is important and will aid you in finding the right coverage at the best price. Car Insurance Requirements The requirements for car insurance differ with states and proving that one is able to pay for any damages done in an accident is a necessity and is known as proving financial responsibility. Auto insurance is the simplest way this requirement can be met, though some states permit drivers to prove they are capable by posting a certificate or bond. You should visit our Car Insurance section to get information on the different types of auto insurance coverage your state requires. Benefits of Car Insurance Formerly, before car insurance became widely mandatory, victims of car accidents got no compensation. And if a victim sued the at- fault driver, the driver paid large sums that could have financially crippling effects. The car insurance states require from drivers gives them protection from the large costs associated with accidents. This enables the victims of any car accident pay for either medical or funeral expenses and even repair a damaged property without having to do so from their pockets. It also enables the at-fault driver cover the cost of most damages without having to lose huge amounts in lawsuits. Knowing that you will be financially covered in the case of an accident because of car insurance can give you some peace of mind. Types of Car Insurance Liability insurance, where the victim’s damages are covered is the most legally required insurance but there are so many other types of coverage where additional protection is offered both drivers and passengers from the costs of property damages and injuries. They include:  Collision coverage: this covers any damage to your vehicle from a traffic collision. Comprehensive coverage: after any incident that is not accident- related, this pays for property damage. Underinsured/uninsured motorist bodily injury coverage – pays for your expenses if you get hit by anyone without any or insufficient insurance. Underinsured/uninsured motorist property damage coverage – covers any damage to your property in the event that you were hit by an underinsured or uninsured driver. Medical expenses payments coverage – this enables you cover your passengers’ and your medical expenses irrespective of who was at fault. You should visit our Coverages section to get more information on the different coverage types on the market. Certain factors have been found by car insurance carriers to statistically affect your chances of being involved in an accident. These are used in determining your premiums and include, but are not limited to: - Your credit history - Your occupation - Number of miles you drive monthly/yearly - The make, model and year of your vehicle - Your gender, age and marital status - Your driving record - Accidents, DUIs, tickets, and others make you riskier to insure.
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