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Wednesday, January 19, 2011

Definition: Auto Insurance

Auto insurance is a kind of insurance. As our learning media, this blog will provide you a definition about auto insurance. The definition is according to Insurance Information Institute. Or you can visit the website of Insurance Information Institute here.

What is Auto Insurance?
The auto insurance will protect you against financial loss if you have an accident. How it works? It works under  a contract between you and the insurance company. On the contract, you agree to pay the premium and the insurance company agrees to compensate your losses as defined in your policy. An auto insurance should provides property, liability and medical coverage:
  • Property coverage compensates for damage to or theft of your car.
  • Liability coverage compensates for your legal responsibility to others for bodily injury or property damage.
  • Medical coverage compensates for the cost of treating injuries, rehabilitation and sometimes lost wages and the funeral expenses.
So, is there any coverages we need? Basically, an auto insurance policy is comprised of six different kinds of coverage. But, most states require you to buy some, not all, of these coverages. for example, if you're financing a car, your lender may also have requirements for the policy. Then, most auto policies are for six months to a year. Do not forget that your insurance company should notify you by mail when it’s time to renew the policy and to pay your premium of the auto insurance.

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