Car insurance keeps your car secure against damage caused by natural and man-made disasters. Personal accidents, liability all are covered in just one policy. In most states, taking up auto insurance is very important before using or keeping a motor vehicle on public roads. It is necessary for both the driver and the insurer.
Things which are covered under auto insurance policy are loss or damage of vehicle against natural occurrences like fire, explosion, earthquake, flood, hurricane and much more. What is not covered under the policy is the usual wear and tear and ageing of the car that would already be listed in terms and conditions of the policy.
The term excess is always used in a policy. Here we explain its meaning. This is the fixed amount you have to pay each time whenever your car is repaired by your insurer. The payment is made directly at the place where you repaired your car. Excess is further divided into two types:Compulsory excess and voluntary excess.
Compulsory excess is the minimum excess payment your insurer will agree to accept as per the insurance policy. This depends on your driving record and insurance company though.Voluntary excess: it is the extra amount over the compulsory excess which you would have to agree to pay when you make a claim to your insurer.
Liability insurance is offered for physical injury or property damage for which the insured driver is solely responsible. The premium under this type of coverage varies from state to state. In USA, the liability insurance covers claim for policy holder or any other driver of insured vehicle. But if you are driving third party vehicle, you will be covered and liable against the policy of that party. Liability coverage is available either as a combined single or split limit policy.
Combined single limit: It encapsulates liability coverage and bodily injury coverage in one combined limit. Split limits: This coverage policy deals with property damage coverage and bodily injury coverage individually. Bodily injury coverage is also usually split into maximum payments per person and a maximum payment per accident.
In US, auto insurance covering liability for property damage and liability for injuries done to others is obligatory in most states but is enforced differently in different states. For example in Virginia residents have to pay $500 annually per vehicle if they do not have liability insurance whereas in New Hampshire motorists do not require liability insurance. Some US states ask that people should carry the policy in their vehicle whereas other states have no such restriction. But it is wise to keep it in case traffic police ask for it.
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