An auto insurance policy is designed to protect the insured from financial risks and liability issues due to owning and driving a motor vehicle. Accidents where the vehicle is damaged, or when legal action is undertaken against the insured are examples in which auto insurance covers the risks. The alternative to having the protection of an auto insurance policy covering you is paying significant out of pocket costs for auto repair should an accident occur to perhaps having to come up with an enormous sum of money if you are at fault for the accident and are facing legal action. This is how auto insurance can be a veritable life-saver.
Insurance companies usually have several auto policy variations that are tailor-made for different customer situations. The most common kind is Individual coverage, but policies are available for companies, organizations, and for those who drive professionally. An example would be a few delivery trucks for a flower shop or a fleet of semi-trucks for a big retail chain.
Insurance companies are generally open to anyone desiring coverage but they can refuse to accept any new customers who do not meet any or all legally acceptable criteria. Should an individual be accepted for coverage then the insurance company issues a policy and it remains in effect as long as the policyholder continues to make the policy premium payments or should he or she lose the privilege to drive. In return, the insurance company protects the client financially in the event of an accident or some other covered situation.
The level and kind of coverage the customer purchases determines the type of assistance received in the event of an accident or covered incident.
A policy that has only liability type coverage would indicate that the insurance company promises to assume financial responsibility should an at-fault policyholder be obligated to pay damages to another operator of a motor vehicle. With a policy that provides the driver full-coverage, the insurance company will provide financial support for a wider array of situations.
Auto insurance is not only a good idea for anyone who operates an automobile, but most states in the US now mandate at least liability insurance for anyone who drives a car. If pulled over by a police officer one of the first requests is to show proof of insurance. A driver generally must also have full coverage if he or she has purchased a new car through a lender.
Regardless of the law, automobile owners are wise to purchase insurance. A policy can pay for things such as the replacement or repair of vehicle in the event of an accident, and many policies have perk options such as rental car provision. Auto insurance is always there for the automobile owner should the unexpected occur.
Copyright Woodbridge Insurance Services 2016