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What a Car Insurance Policy Covers


For those unfamiliar with insurance, most wonder what a car insurance policy covers. In simple terms, car insurance policies are composed of various coverages. There are several types of coverage that cover people from injuries or property damage during an accident. Generally, what a car insurance policy covers depends on the type of coverage you have.



Insurance policies have been practiced for many years. These are provided by auto insurance companies worldwide. Car accidents are common in all parts of the world. The loss arising from such mishaps need to be controlled. Financial assistance is simply what a car insurance policy provides to drivers during accidents and other misfortunes.


The first thing on what a car insurance policy covers is the car liability coverage. This coverage is practiced in many countries and is mandatory in most cases. Auto liability coverage covers bodily injury or death of a person or more in an accident. This policy also covers property damage caused by the accident. The levels on what a car liability insurance covers are set by the State’s laws. These are referred to as the minimum liability levels. In most states, it is mandatory for all vehicles to carry at least the minimum liability coverage as set by the state.

The other thing on what a car liability insurance covers is paying for legal defense. Liability insurance covers a driver, responsible for an accident in court. This also pays for all court expenses.

When a driver lacks liability insurance and is involved in an accident, the uninsured / underinsured motorist coverage can be applied. This coverage is also important when a driver at fault does not have sufficient liability insurance. This coverage pays for damages for covered person’s injury in an accident.

A person’s medical expenses are also what a car insurance policy covers. This is provided by the Personal Injury Protection coverage (PIP). This is through treatment for covered people during an accident. The same also pays for lost wages, rehabilitation and funeral expenses in case of death.

Medical payment is also what a car insurance policy covers. This is through the Medical Payments coverage. In most states, medical payments coverage is common. This works relatively the same as the Personal Injury Protection but is limited to only paying medical bills and funeral expenses arising from an accident.

There is also car insurance policy that mainly pays for car damage. This is the collision insurance coverage. When a covered vehicle collides with another vehicle, then this policy applies. The same is also responsible to pay for damage caused by collision with an object such as trees. In addition, this policy also covers for rollover of a vehicle.

A car insurance policy also covers damage or loss arising from natural disasters. This is through the Comprehensive insurance coverage. Rather than damage caused by collision or rollover, the comprehensive insurance coverage pays for loss or damage arising from fire, wind, floods and other calamities. This coverage also pays for vehicle loss through theft or vandalism.




In general terms, what a car insurance policy covers is loss arising from car accidents. There are other calamities covered by insurance policies such as vehicle theft. What a car insurance policy covers simply depends on the coverage type in place.

By SAMUEL MUHIA, published at 03/30/2012
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