Types of Automobile Insurance
Types of Automobile Insurance
Automobile insurance is a type of insurance specialized for automobiles. The main function of automobile insurance is to offer financial coverage against damage or injury caused by accidents in a car and from liability which can also arise due to domestic incidents in the automobile. The major types of automobile insurance are comprehensive, collision, and liability insurance. Each one of them has different features of insuring automobiles.
Generally, a premium for an automobile insurance policy from https://www.mbsinsurance.com/automobile-insurance-edmonton.htmlis paid only once a claim has been made. If you are involved in an accident or have to file a report with the police or the authorities, then the insurance company will pay your claims directly. However, if you are at fault, the insurance company may not pay the full amount of the premium. For instance, if you claim for the loss of your car but the cost of the repair is more than what you paid for your car, then the insurance company may refuse to pay the premium and hence your claim will be rejected.
There are various ways in which an automobile insurance company can decide whether it should cover a certain person or not. One is through the Voluntary Market. Under this system, the insurance company allows people to choose on its own whether they want their automobiles insured or not. The insurer then compensates the cost of repairs by charging a premium on the insured amount. In case there is a loss, the company may also withdraw from the settlement. But in case of voluntary market, a person may have to pay his or her claim to the insurer irrespective of whether he or she is involved in an accident or not.
Another type of automobile insurance coverage is Property Damage Liability. This coverage covers the losses that occur due to personal bodily injuries and property damage. Property damage may consist of damages to a car or a person's personal belongings. Bodily injury liability is the part of liability coverage that actually pays the medical expenses and any other incurred costs for the injured person. In cases where the insured is proven to be at fault for the auto accident, the insurer has to bear all the expenses. In such cases, it is customary for the insurer to demand proof from the police and witness. See facts, visit https://www.britannica.com/topic/insurance/Business-liability-insurance.
The third type of insurance policy is the Effective Date. The Effective Date is the actual date on which the insured vehicle was manufactured. Thus, if the policyholder wants to drive his or her car after the effective date, the policy will not be effective. Instead, the insured vehicle must be re-exported or disposed off. The policy period begins with the manufacturing date and ends with the expiry date specified on the policy.
The fourth coverage is for bodily injury liability coverage. Under this coverage, the insurer compensates for damages to a person caused by an automobile accident. However, the extent of the coverage is dependent on the underwriting rules of the insurance company. Bodily injury liability coverage may also include property damage, which means it pays for repair costs for vehicles or other properties that are damaged as a result of an automobile accident. With the limitation of bodily injury liability, it is important to state that the insured need not prove that the accident occurred as the basis for the claim. Also, this coverage does not apply if the policyholder has hired a personal injury lawyer to defend his or her claim. Get more info.