Motor insurance is also called as auto insurance or car insurance or motor vehicle insurance. Auto insurance is an formal agreement between the owner and the insurance company, in which the owner pays some amount to the company in exchange to receive benefits against losses. Auto insurances gives benefits to the losses which are related to the your automobile.
Auto insurance mainly provides three types of coverages
- Property coverage
- Liability coverage
- Medical coverage
1. Property coverage:
Auto insurance covers all the losses which arise from car accidents, theft, fire accidents, and also from earthquakes, house breaking etc,. Auto insurance recovers the cost to buy a new car, if you lost your car by theft. Auto insurance pays service and spare parts cost , if your car gets damaged due to fire accident. It also pays for the technical and mechanical problems.
2. Liability coverage:
Auto insurance provides the benefits against legal claims of your car. If you by accident are responsible for damage of some others car, then you will face some legal problems by the car owner. If you have the car insurance, then the insurance firm pays the amount needed to recover another person car.
3. Medical coverage:
Auto insurance covers medical expenses, death benefits, and hospital charges for the injured person. If you cause accident to a person by fault, then you are responsible for the injury or death of the person. In such cases, if you have the auto insurance, then the insurance company pays the medical and hospital charges for the injured person to recover his health. In case of death of a person, the company provides death benefits to the dependents of an individual.
Due to its wide coverage, an auto insurance is a must for vehicle owners. Depending on the amount of premium some companies also provide additional coverages too.
