In truth there are quite a lot of different types of motor vehicle insurance available. You only have to ask around for quotations from different insurers to find out just how many different types there are. In essence an insurer can literally just define their own term in reference to a motor vehicle insurance policy, but generally there are two types which make for a very important focus from a legal stand-point.
Damage & Theft Coverage
When the average consumer thinks about motor vehicle coverage, naturally this is what they’re probably considering. Damage and theft coverage offers a financial safety net for just that – theft of your car or any kind of damage.
This type of motor insurance coverage is pretty straight-forward in that you’d be liable for a payout in the event of a qualifying claim, with the amount you’re subsequently paid out depending on the class of coverage you took out.
Liability motor vehicle coverage is less talked-about because for some reason many people don’t quite take out this type of insurance. It’s perhaps every bit as essential as damage and theft coverage however and it simply refers to a financial safety net to fall back on should you be the cause of a motor accident in which the other party would incur a financial burden. So basically your liability coverage would assist you financially should it be deemed that you are liable for the cost of the damages or injuries suffered by the victim of the accident you’re involved in.
Paying your premiums as a requisite condition to ensure you have no problems when you file a claim is important, with arrangements that can be made should you be experiencing a particularly difficult month and subsequently can’t make your premium payments.
In both instances however, and perhaps all other instances that have anything to do with insurance, the whole exercise of taking out insurance coverage is nothing more than a legal exercise, so it’s important to get to grips with exactly what you’re getting into.
Getting back to the discussion of how insurers can basically just define terms to include in the policy, which is a legally binding document, that’s precisely the reason why contracts known as insurance policies are so long. Pretty much every term first has to be explained and clarified with regards to the various scenarios under which it is applied.
The car accidents and injuries suffered by any party involved in the accident could very well cover a narrower or a wider scope if you compare the meaning of the phrase as it applies to a legal representative as opposed to the insurance company.
Ultimately what this all comes down to is that you have full understanding of exactly what you’re getting into by way of the terms defined. Insurers are legally obliged to explain everything to you prior to your signing of the contract at your request, otherwise as soon as you sign on the dotted line, you are basically proclaiming to have fully understood the terms and that you fully agree with the business relationship going forward.