Auto owners insurance is car insurance. For people who finance their vehicles, there may be certain insurance requirements. However for people who own their cars outright, many of these insurance requirements may not be necessary. However we will discuss different kinds of coverage and why they should still be included.
First of all any auto owners insurance has a component which requires liability insurance. This type of coverage will pay for loss associated with damage to people or property as a result of an at fault accident.
In addition if people are hurt as a result of an accident, they may seek financial compensation to cover medical expenses and other financial issues arising from an inability to work or money to cover pain and suffering.
The injured parties may elect to sue you for this money. If you do not have liability insurance you could be directly responsible to pay for these damages. However liability coverage does pay for these expenses and they can also provide you with legal representation should that become necessary.
Another common type of coverage is property damage, medical expenses, and personal injury protection. These are usually included in most car insurance policies.
Collision and comprehensive is also a common type of coverage. Collision pays for repairs to a damaged vehicle which can occur as a result of an accident. Liability coverage will pay for damage to other vehicles in an accident but not to your own vehicle.
And comprehensive coverage pays for loss or damage to a vehicle as a result of a non accident related situation. So if the vehicle is vandalized or stolen, the comprehensive coverage will take care of this.
Now for drivers whose vehicles are financed or leased, there may be requirements for the type and amount of coverage. But for someone who owns their vehicle, they usually do not have to include collision and comprehensive coverage. This is because if there is damage to the vehicle, there is no lienholder whose rights have to be protected.
Someone who has auto owners insurance may be tempted to drop collision and comprehensive coverage. While this may be a viable option for a vehicle which has little value, it is definitely not a good idea for a vehicle which has value which is higher than what the owner would like to lose.
If there is no collision coverage for example, if the car is damaged there would not be any money from the insurance company to cover it. So make certain to give careful thought when it comes to type and amount of coverage for auto owners insurance. The wrong decision can be very costly indeed.