What are My Choices with the Coverage Offered by Auto Insurance?

Dominic is thrilled with his latest purchase. He has brought the latest model of Toyota, from a Boston based car dealer. Dominic has been a car lover since his childhood. Naturally, when he landed up a high paying corporate job at Citibank’s Boston branch, he decided to finance the purchase of his new car with the help of a car loan.

However, the lender asked Dominic to apply for auto insurance, as that was a part of the loan agreement.  When Dominic visited the Boston office of an auto insurance provider, he was confused with regards to the types of auto insurance policies that were being offered by the company. Dominic was under the impression that there is a single type of auto insurance policy that seeks to protect your car. Dominic was clearly off the mark.

Auto insurance is mandatory in almost all the states of US. Auto insurance is a contract between an individual and an insurance company. The insurance company provides a financial cover over the expenses incurred in case of an accident, in lieu of the premiums paid by the individual. This covers all the expenses that are included in the policy.

There are a variety of auto insurance policies each tailored to meet the differing needs and expectations of individuals. In other words, the coverage offered by auto insurance policies varies from policy to policy.  Each coverage is priced separately be the auto insurance company. You need to choose a coverage/s that complies with the rules in your state.

Take for instance the collision coverage. Auto insurance that offers collision coverage makes a payment in case you are required to carry out repairs in an event of an accident or collision. Take the case of Adam, a Boston based architect.  A fortnight ago, his car collided with a tree. The collision caused serious damage to his bonnet as well as the grille. Luckily, Adam’s auto insurance policy offered collision coverage and hence he did not have to spend a single dime on the repairs from his own pocket. In case of collision coverage, the insurance company pays for the damage irrespective of who is at fault.

Boston auto insurance companies also offer Medical Payments or Personal Injury Protection [PIP]. Janet, a sales manager associated with Tesco’s Boston branch decided to opt for an auto insurance policy that offered PIP after narrowly escaping a serious accident. She suffered only minor injuries. Her doctor at Boston’s medical center told her to go in for an auto insurance policy that offers PIP coverage. He reasoned that had the injuries been serious, the surgeries and operations would have drained her financially. A PIP auto insurance policy covers the cost incurred for any injuries suffered by the policyholder as well as the passengers traveling with the policyholder. This payment is made irrespective of who is at fault.

 You can also opt for an auto insurance policy that offers a coverage known as ‘bodily injury liability’. Neil became aware of the importance of going for this kind of auto insurance policy after he had to pay for an expensive operation of a person who was injured due to rash driving by his brother. According to Insurance Information Institute, “This coverage applies to injuries that you, the designated driver or policyholder, cause to someone else. You and family members listed on the policy are also covered when driving someone else’s car with their permission.”

We all are aware of the fact that an accident does not always involve human beings. Take the case Shaun, a freelancer working for Boston Phoenix. The other day, he was returning home from a late night assignment. He was driving the car at a considerable speed. Unfortunately, he rammed his car into a lamppost and had to pay a hefty fine for the same. Had Shaun opted for an auto insurance policy that offers ‘Property Damage Liability’, the same amount would have been covered by an insurance company. Such kind of policy covers damage caused to telephone poles, fences, and buildings by your car.

‘Uninsured and Underinsured Motorist Coverage’ is another type coverage offered by auto insurance policy. Here, the policy covers the medical expenses incurred for treating the policyholder or some one designated by him for the injuries suffered due to being hit by an uninsured or an underinsured driver.

Auto insurance companies also offer what is known as comprehensive coverage. According to cars.com, this coverage pays for repairs or the replacement of your car if it is stolen or damaged in a fire, flood or high winds.  Comprehensive coverage is one of the most popular of all the coverage because it covers a wide range of expenses that you are likely to incur with respect to your car.

Thus, there are different types of coverage available with an auto insurance policy. Choose one that you find the most useful and at the same time affordable too.

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