The purpose of insurance to guard against loss or damage. For example, health insurance is there to help you pay for medical costs that would otherwise be too expensive for most people. Insurance can also specifically protect someone other than the person who is insured.
Common Types of Policy Coverage
Most states require drivers to purchase specific types of car insurance coverage and set mandatory minimum liability limits. Generally speaking, there are different types of damage that car insurance policies will cover. Probably the two most common categories of car insurance are bodily injury liability and property damage liability.
Self-Insurance
Usually people purchase car insurance from an insurance company and pay a monthly premium. But, some states allow drivers to self-insure their car. Self-insurance can take a variety of forms such as purchasing a surety bond or making a deposit with the Department of Motor Vehicles. Basically, the driver sets aside money to cover insurance needs, and the amount set aside must meet the minimum insurance requirements of the state.
Related Resources:
- Find an Insurance Lawyer Near You (FindLaw’s Lawyer Directory)
- Insurance (FindLaw’s Learn About the Law)
- Roundup: Car Insurance Questions and Answers (FindLaw’s Law and Daily Life)
- Raised Rates After a Car Accident: Are There Limits? (FindLaw’s Law and Daily Life)
- Understanding Insurance Laws (FindLaw’s Law and Daily Life)
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