Insurance is a risk management system with the primary objective to evade the risk of a contingent, tentative loss. Auto insurance or vehicle insurance is purchased for cars trucks and other automobiles to provide reimbursement against physical damage resultant of traffic collisions and against liabilities that might occur therefore.
Insurance companies provide vehicle insurance offers in packages of different types of coverage (You might be looking for full coverage and some agents can even convince you for one, but you should be cautious as there is nothing like a full coverage insurance). It is easiest to determine what you consider most important in your car or truck, which needs to be protected. Once you have determined this you are one step closer to you desired insurance policy (To know what you want is half the battle won). Insurance serves as a protection to your family if something happens to you or your property. It also protects you from the damage brought and suffered by others.
This article deals only with Liability Coverage.
Bodily Injury (or BI) Liability:
This package insures and covers the injuries or death that is resultant of your action. It also provides legal defence, in case the injured party files a lawsuit against you. Medical Bills, Loss of income due to the accident and it's impacts can be claimed. If there has been a critical accident one might need sufficient insurance cover to fight the cases in court without affecting their personal wealth. However, Body Injury Liability only covers people and not your car. This coverage is limited to the terms and conditions of the company as mentioned in the auto insurance quotes. It is mandatory to have a BI coverage in most states.
It is important for you to decide the limits of BI coverage. If you keep it too low, in case of a severe accident the lawsuit, legal procedures and expenses would ruin your savings. You might have to liquidate all your investments and put on stake your future earning to bear the expense of these lawsuits. Being a bit thoughtful can save you these hassles.
Property Damage (or PD) Liability:
This policy is meant to cover other's property that might have suffered damage from your car. This cover is not just limited to other's cars but covers all types of properties (house, fence, letter post etc.). This cover also provides for a legal defence in case the sufferer decides to file a lawsuit against you. The PD coverage is also limited by the policy's terms and conditions and the auto insurance quotes.
It is important for you to decide a feasible limit because this might lead to additional expense (just like Bodily Injury Coverage) in case of a severe accident.
My next article will deal with the policies that would cover you, your family and your vehicle.