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Buying your new car is a great investment – people say. From having a fun weekend with your family to just chilling with your friends, your car is always in use. Before you go on to purchase a brand new car using Modesto auto loans, you should consider a few features first, such as getting the right coverage for your vehicle.
Auto insurance is designed to protect your vehicle against the listed covered perils.
Now, what’s a covered peril?
A covered peril is an event that an insurance company agrees to pay for in case that event damages your vehicle.
Basics Of Auto Insurance
Auto insurance is a contract between the insured and the insurance company where the company agrees to provide coverage against damages incurred due to covered perils. Think of auto insurance and you’ll be bombarded with options. It is important to choose one wisely depending on its features.
For example, there are certain types of insurance coverages that are mandatory in most states.
At the very least, here’s what ordinary auto insurance should cover:
Any damages caused to the car or theft of your car
Your legal responsibility of causing property damage or health damage to others
Treatment cost, cost of rehabilitation, and compensation for lost wages
Who Is Covered Under My Auto Insurance?
Generally, basic auto insurance would provide coverage to you and your family members while driving your car or someone else’s car, given they are driving with consent.
The policy would also cover the cost of damages (medical and property) caused by you to someone else’s property or health. For instance, you caused damage to someone’s yard by running a car into it.
A normal policy would not cover the damages incurred to you or the vehicle while you are carrying out any commercial work like delivering food or working for apps like Uber. However, you can get additional coverage at additional expenses if you want to use your vehicle for commercial purposes.
Moreover, before you get an auto loan, it is recommended to ask your lender for the list of mandatory coverages so that you are sorted from the beginning.
Is It Mandatory To Have Auto Insurance?
There are a number of coverages available in the market. And, honestly speaking, not all types of coverage are mandatory. However, getting a basic plan is mandatory in most states.
Here are the types of coverage you are required to buy:
Bodily Injury Liability
If you are at fault for causing damage to someone else, bodily injury liability will cover the cost of their medical bills, funeral, or lost wages.
It will also cover the legal fees if they file a lawsuit against you.
Property Damage Liability
If you caused an accident that damaged the property of someone else, this coverage would cover the bills associated with repairing and legal fees.
Personal Injury Protection
PIP will cover the medical fees and compensation for lost wages in case you or the insured person is injured in an accident.
Uninsured Motorist Coverage
If you or your vehicle is damaged by someone who is underinsured or uninsured, Uninsured motorist coverage would pay for that.
Which Type Of Auto Insurance Is Right For You?
Factually, there is no one-size-fits-all when it comes to auto insurance. It truly depends upon your individual needs and requirements. However, it is vital to understand that getting basic coverage is necessary for most states. You can also opt for additional coverages like roadside assistance and gap insurance.
It is wise to check available loan options for buying a new car and round upon the one that suits your needs.
Keyword: Types Of Insurance Coverages You Should Go For While Buying A New Car