Car Insurance 101: Understanding Your Auto Insurance Policy

When it comes to finalizing deals, car companies offer info on auto insurance to their customers to help shield them for inevitable financial losses. Reading insurance policies may be nerve-wracking at first, especially to those who have no idea about insurances. This encompasses a lot of common insurance topics that is why this is a must-read by every car owner. In order to be acquainted with the coverage, limits, terms and conditions, and other unfamiliar terminologies, one must take time to read and comprehend this document.

When Car Insurance Is a Necessity

Accidents happen by surprise and the best way to do away with extraordinary bills is to get coverage for you, your car, and the other people involved. This helps protect your finances when you crash into someone’s property and when you encounter legal issues. Sales representatives will put forward info on auto insurance as your ultimate savior in case of emergencies.

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Compulsory Coverage

Bodily Injury Liability covers expenses for any injury or fatality whether or not it was you or someone else was driving your car. Although this does not directly offer protection to you or your vehicle, it can defend you from damage claims by the other party. Another compulsory coverage, the Property Damage Liability serves like a “money-back” guarantee for the property damages committed, no matter how major or minor damage it is.

Frequently-Needed Coverage

No-Fault laws do not entirely free you from lawsuits but it limits the damages you face when you have two of the frequently-needed auto coverage. Personal Injury Protection is a repayment of expenses on hospital bills, rehab, lost wages, funerals, and other expenses under the stipulated on your agreement. Residual Body Injury Liability can protect you and people inside your car who are of legal age from legal actions taken by the other party.

Discretionary Coverage

Car owners can opt to add Collision Coverage which repays you for damages caused by collision. People who experience events like a car crash or smashing another object can take advantage of this. A Comprehensive Coverage give reimbursement for damages incurred aside from collision. This covers incidentals like fire, hail, flood, falling debris, vandalism, and glass breakage.


This gives you an idea on the extent of your car insurance coverage. Having enough info on auto insurance gives you the upper hand as it outlines how the coverage works and what percent is covered for specific damages incurred. Know that every coverage have different costs so you can tailor according to your needs and budget.

Terms and Conditions

This segment discusses the responsibilities of every customer and the insurer. It includes policies on cancellation, handover of rights, and payment schemes. To make sure you won’t have legal problems in the end, you must be equipped of this data.

Duties and Responsibilities

This part of the insurance document provides the courses of action to take when encountering car or property damages or loss. This states how owners should be proactive in contacting the insurer or filing a police report when misfortunes happen.


The Endorsements page contains non-compulsory coverage being offered by the car company. This endorsement may have varying policies so you should choose the ones that suit you best.

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Know the ins and outs of your car insurance policy to avoid headaches in case you need to make a claim. For more info on auto insurance, check out

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