What Exactly Is Auto Insurance?
A policy purchased by vehicle owners to mitigate costs associated with getting into an auto accident. Instead of paying out of pocket for auto accidents, people pay annual premiums to an auto insurance company; the company then pays all or most of the costs associated with an auto accident or other vehicle damage.
Typically, auto insurance in California consists of the following parts:
- Part A--liability coverage: This provides protection for claims brought against an insured when the use of an insured vehicle caused bodily injury or property damage to someone else.
- Part B--medical payments coverage: This provides coverage for various medical expenses incurred by the insured and others as a result of an accident, regardless of negligence or liability on the part of the insured.
- Part C--uninsured motorists coverage: This provides coverage for losses that the insured and others sustain when injured through the negligence of an uninsured or unidentified hit-and- run motorist.
- Part D--coverage for damage to your auto: This provides coverage for losses that the insured suffers as a result of damage to his or her covered vehicle and/or its contents. This coverage consists of two parts: collision and other than collision (also known as comprehensive). Other-than-collision losses include such things as fire damage, damage caused by animals in the road, and theft.
- Part E--duties after an accident or loss: This imposes various requirements on the insured if an accident or other loss occurs. If you do not comply with the duties spelled out in this section, you may forfeit your contractual rights under the policy.
- Part F--general provisions: This specifies certain conditions that apply to the entire policy or insuring arrangement. These include provisions for fraud, bankruptcy of the insured, and cancellation of the policy, among other things.