What are the functions of auto insurance ? You know that car insurance is compulsory while driving on any road. Getting your car, bike or any other automobile insured is costly. So, what do insurance companies provide you for the insurance payment ? Well, they provide services to you for your financial safety. The main function of an auto insurance is to keep you financially covered in case of an accident on the road.
These are some of the main functions of auto insurance.
- Liability in case of an accident : Suppose, an accident occurs between your car and another driver’s car. If the driver is insured , he/she can ask you to bear the expenses of the repair work for his/her car’s damage. This repair work may sometimes become costly. If you and your car is insured , then the auto-insurance company can bear the liability of the expenses. So, you get saved from paying for the damages from your own pocket.
- If you meet with an accident and the other person is not insured ? In that case too, the insurance company can pay for the damages that happen to your vehicle. They actually file a legal case against the uninsured driver and recover the money from him/her. In such a scenario too, you don’t have to pay for the vehicle damages from your own pocket. Since they handle the matter with the other driver, you are saved from a lot of legal matters and wastage of time.
- Another function of auto insurance is to pay for damage to the vehicle caused by natural events like hurricanes, floods or hailstorm etc. Natural hazards too can cause significant damages to any automobile.
- Car break down : This is a very nice facility provided by auto insurance companies. If your car breaks down somewhere, you can call them and tell about it. They can contact a towing company or a mechanic nearby to assist you. In this kind of cover, the auto-insurance company pays for the repair work and the towing expenses. This cover is one that helps when you are in need.
- Auto Insurance can also cover the medical expenses in case of a bodily injury. However , different companies offer different levels of medical expenses coverage. There is another form of coverage called personal injury protection ( PIP ) or no-fault wherein the insurance company can also pay for medical expenses and lost wages because of an accident.
- Sometimes, the auto-insurance company can also cover valuable items in your car. For example, if you have installed a nice speaker system in your car which is expensive, the auto-insurance company can insure it against damage.
These are some of the common functions of automobile insurance. If you buy all the coverage types provided by an auto-insurance company, it is called as Full Coverage. Car insurance is made compulsory by law . Besides this, auto insurance can really save you a lot of money in case of an accident. These functions of auto insurance save us from stress and a lot of monetary expenditure . The objective of any insurance policy is to mitigate or transfer the risk involved for the insured person or object.