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What Does Car Insurance Cover?

March 1, 2023 General

Car insurance is a type of insurance policy created to protect drivers and their vehicles in case of accidents, theft, or other unexpected incidents. In most countries, car insurance is considered a legal requirement. You cannot operate your vehicle unless you can show proof of the best car insurance in Michigan.

close up image of a car with key for the best car insurance in michigan 

What Is Car Insurance For?

What’s car insurance for, and why do I need it? The primary purpose of car insurance is to provide you, as a policyholder, financial protection in case of accidents. It also helps cover the cost of the injuries and damages sustained by other people because of your driving.  

When choosing a car insurance policy, it is important to understand the available coverage types and to select a policy that meets your specific needs and budget. In this guide, we will discuss the basics of car insurance and help you make an informed decision about the coverage that is right for you. 

What’s Included in a Car Insurance Policy?

A typical car insurance policy may include the following types of coverage: 

  • Liability Coverage 

When you are at fault in an accident, your liability coverage pays for any damage or injuries you cause to others. There are usually two types of liability: bodily injury and property damage. 

  • Collision Coverage  

When you get into an accident, this type of coverage could pay for repairs to your car regardless of who is at fault. 

Your vehicle is covered for damages from non-collision incidents, such as theft, fire, or natural disasters. 

  • Uninsured/Underinsured Motorist Coverage 

In the event of an accident caused by a driver who does not have insurance or enough insurance, this policy covers your losses. 

  • Medical Payments/Personal Injury Protection (PIP): 

This insurance covers your medical expenses if you or your passengers get into an accident.  

In addition to these standard types of coverage, some car insurance policies may offer additional options such as rental car reimbursement, gap insurance, and more. The specific coverage options and limits included in your car insurance policy will depend on the policy you choose and the insurance company you purchase it from. 

What Are the Benefits of Investing in a Car Insurance Policy?

Car insurance provides the following benefits: 

  • Car insurance helps cover the cost of damages or injuries you cause to others in an accident and the cost of repairs to your vehicle. This can provide peace of mind and protect you from financial losses in an accident. 
  • In most countries, having car insurance is a legal requirement. Failing to have insurance can result in significant fines and other legal penalties. 
  • Some car insurance policies include medical payments coverage or personal injury protection, which can help cover medical expenses for you and your passengers in the event of an accident.
  • Without car insurance, you would be responsible for paying for damages and injuries caused by the accident yourself. Car insurance helps reduce the financial burden in these types of situations. 

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Looking for the Best Car Insurance in Michigan?

Car insurance is a critical component of owning and operating a vehicle. It provides financial protection, legal compliance, and peace of mind in the event of an accident or other covered event. Encore Insurance Group offers customized insurance policy solutions that fit your needs. Contact us for your peace of mind.  

Please note: 

The above is meant as general information and as general policy descriptions to help you understand the different types of coverages. These descriptions do not refer to any specific contract of insurance and they do not modify any definitions, exclusions or any other provision expressly stated in any contracts of insurance. We encourage you to speak to your insurance representative and to read your policy contract to fully understand your coverages.