When you take out your car insurance policy, the company you have your cover with will ask you what kind of cover you want and whether or not you have any additional cover needs, such as cover against vandalism. But what happens if you’re involved in an accident, or if someone hits your car without having insurance? What happens then? Well, it depends on who’s to blame for the accident – whether it was you or someone else – and how much damage there was to the vehicles involved in the accident.
Personal injury
There’s no doubting that accidents happen. And when they do, it’s important to have the right insurance in place to protect yourself, your family, and your finances. But what is the legal minimum insurance cover on the road? It turns out there isn’t one. In the UK, for example, you’re legally required to have third party insurance but nothing more than that. With third party insurance only you can claim for any injury or damage if you’re involved in an accident where someone else is at fault – regardless of whether or not you’re at fault too.
Third party liability
When you’re driving, you’re required by law to have at least third party liability insurance. This type of coverage protects you financially if you’re responsible for damages or injuries to another person or their property. In most provinces and territories, the minimum amount of coverage is $200,000. But it’s a good idea to purchase more than the legal minimum, since even a small accident can quickly exceed that amount.
Property damage
If you’re at fault in an accident, property damage coverage will help pay to repair or replace the other driver’s car. The minimum limit is $5,000, but it’s a good idea to carry at least $25,000 of coverage. Keep in mind that this only covers damage to the other driver’s car, not yours. If you want your own car protected, you’ll need collision and comprehensive coverage.
Compulsory third party
If you’re driving a vehicle on the road, you must have compulsory third party (CTP) insurance. CTP insurance covers you for liability for injuries to other people that arise out of the use of your vehicle. It doesn’t cover your vehicle or any other property. The minimum level of CTP insurance you can have is determined by each state and territory. In most cases, you’ll need to have at least $5 million in coverage.
Collision
Even if you’re a safe driver, you can’t control what other drivers do. That’s why it’s important to have collision coverage on your auto insurance policy. Collision coverage will help pay to repair or replace your car if it’s damaged in an accident with another vehicle or object. But don’t just assume that this kind of damage is covered by your regular comprehensive and liability coverage. Collision may be necessary to protect you against liability for injuries to passengers in the other vehicle or injury to people hit by the second car involved in an accident. If one of these happens, then damages could easily surpass $100,000. So make sure you know what is covered under your auto insurance policy before driving away from a scene of an accident.
Comprehensive
When it comes to car insurance, there are two types of coverage required by law in almost every state: bodily injury liability and property damage liability. These types of coverage protect you from any injuries or damage you may cause to other people or their property in an accident. These are often called liability insurance because they pay for your damages if you’re found legally liable for a crash. Collision: If your vehicle is damaged during a collision, this type of auto insurance covers the cost of repairs up to your policy limit, as well as paying for rental cars while yours is being repaired. Comprehensive also pays out when weather events like hail storms and floods occur