Car Insurance Policy Defined

Car insurance policy is what protects you from liability in the case of an accident while driving. If you didnt have a car insurance policy and caused a major accident perhaps even an accident where someone goes into the hospital and requires major medical assistance you could be responsible for all the costs. That could really sink a person who doesnt have insurance especially a person who doesnt have a high income. If you put a person into the hospital, for example, with broken bones and damaged organs, their total bill for treatment and recovery could amount to almost a million dollars, if not more. Add in the money you would owe to repair their car and you could be facing a major financial catastrophe. This figure doesnt even include the damages to your own car, or your own medical bills!

Who Needs a Car Insurance Policy?

All drivers are required by almost all states to have an adequate car insurance policy that will, at minimum, cover the costs involved to another driver in case you get into an accident. The way it works is that you, the insured driver, pay a monthly bill your premium to the insurance company. This premium insures you in case there is an accident. If there is an accident, and you are to blame, the insurance company will pay the bills involved, whether its for damage to the other drivers automobile or their medical bills. Most insurance policies have a limit, however: they will pay up to, say, $50,000 of another drivers medical bills, but after that amount is reached you are responsible for the difference. If you want the insurance company to pay more than that in the case of an accident, you can opt for a more expensive monthly premium.