Table of Contents:
- Introduction
- Liability coverage
- Collision coverage
- Comprehensive coverage
- Personal injury protection (PIP) or medical payments coverage
- Uninsured/underinsured motorist insurance
- Conclusion
- FAQs with answers
Introduction:
Car accidents can happen to anyone, and they often result in significant financial losses for the parties involved – from vehicle damage to personal injuries that require expensive medical treatment.
To protect yourself financially against such risks, it’s essential to have car insurance policy which provides different types of coverages depending on your needs and budget.
In this article, we will discuss various types of auto-insurance policies available so you can make an informed decision when purchasing one.
Quick Explanation:
Auto-insurance policies provide several kinds of protections including liability , collision , comprehensive , PIP/Medical Payments Coverage & Uninsured /Under-Insure Motorists . Each type offers unique benefits based on what kind accident occurs.
Liability Coverage :
This is mandatory by law as per South African Road Traffic Act No 93 Of 1996.This covers damages caused due to bodily harm or property damage resulting from an accident where you are at fault.The amount covered depends upon the limit set forth under your policy agreement.It also includes legal fees if someone sues you after being injured during a crash involving your vehicle.
Collision Coverage :
It pays for repairs/replacement costs incurred because of any physical impact between two vehicles while driving.Collision may include hitting another car/object like tree/pole etc., rolling over onto its side/topside too.In case repair cost exceeds actual value then insurer declares total loss .
Comprehensive Cover :
As name suggests,it’s all-encompassing plan covering almost everything except collisions.Comprehensive plans usually pay out for damages caused by theft, fire , natural disasters like floods or hailstorms and other non-collision related incidents.
Personal Injury Protection (PIP) Or Medical Payments Coverage :
This coverage pays medical expenses incurred due to injuries sustained in an accident regardless of who is at fault. It may also cover lost wages if you are unable to work because of the injury.
Uninsured/Under-insured Motorist Insurance:
If someone hits your car but doesn’t have insurance or has insufficient liability limits, this type of policy will pay out on behalf of that driver up-to limit set forth under agreement.
Conclusion:
Having a comprehensive auto-insurance plan can provide peace-of-mind while driving .It’s important to understand different types available so as make informed decision based upon individual needs & budget .
FAQs with answers:
Q1.What does Liability Cover?
A1.Liability covers bodily harm /property damage resulting from accidents where insured party was found responsible .
Q2.Does Comprehensive Plan include Collision ?
A2.No.Comprehensive plans usually don’t cover collision-related costs.However,it provides protection against almost everything else including theft,natural calamities etc.,
Q3.Is PIP/Medical Payment Coverage mandatory?
A3.It depends on state laws.In South Africa it’s not required,but highly recommended especially when one lacks health insurance.
Q4.Why do I need Uninsured/under-Insure motorist coverage ?
A4.Unfortunately there are many drivers without proper insurances which means they cannot compensate victims after causing any kind accident.This makes uninsured motorists’coverage essential part every good auto-policy.
