Reader’s Question:
What is an automotive insurance policy?
Ellenroh
Seattle WA
Automotive insurance policy is a document that contains the details of the insurance coverage you sign up for with a provider. You can find there the amount of insurance coverage you and/or your car are entitled to. You can also find there the different types of coverage you pay for. So basically your policy is a package of different kinds of insurance coverage.
The types and amount of coverage to be included in your automobile insurance policy is not solely based in your decision. We can consider the state law as the major deciding factor when it comes to your car insurance because, in the first place, they are the one who make it a requirement. Driving without one makes you law breaker. The 2 types of coverage required by law are bodily injury and property damage liabilities coverage. The state of Nevada’s minimum required coverage is 15/30/10. This means you need to get the following amount of coverage:
$15,000 of bodily injury liability for 1 person
$30,000 bodily injury liability for all people, and
$10,000 property damage liability.
If you want to increase the coverage amount of your automobile insurance policy, then it will be already your decision. After the state’s required basic coverage is fulfilled, you can now decide what to add – amount of coverage and or other types of coverage. It is advised that you examine carefully what other coverage you want to add, how much you want to add. Then, cross check them with your budget. Can your budget still handle the additional coverage you like to be included in your policy? If yes, then good. If no, then maybe you can adjust the coverage amount or remove some that are not really a priority.
If your car is purchased via loan from a financial institution, then they can also be part of deciding what coverage should be in your automobile insurance policy. They would usually require collision and comprehensive coverage. Collision covers the repair cost if you are at fault. Comprehensive will cover the replacement cost if your car get stolen or become a total wreck. Banks would require this as to protect the money they invested in your car, which has not yet been repaid.
