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Car insurance policies consist of contracts between the car owner and an insurance company. Car owners agree to pay for the insurance policy, or policies, and the insurance company agrees to pay for damages or injuries that the policies agree to cover.
Types of Car Insurance Policies
A number of different types of car insurance policies exist, offering different types of coverage. Sold separately, car insurance policies include liability, collision, comprehensive and uninsured motorist.
Liability Car Insurance
Liability car insurance pays for bodily injuries to another person, or damage to property owned by another person, when the insured car causes the injury or damage.
Collision Car Insurance
Collision car insurance pays to repair or replace the policy owner's car when damage occurs in an auto collision with another car or object, such as a tree or light pole.
Comprehensive Car Insurance
Comprehensive car insurance pays to repair or replace the insured car for damages or loss that occur for some reason other than an automobile accident, including fire, storm, animals, vandalism and automobile theft.
Uninsured Motorist Car Insurance
Uninsured motorist car insurance pays the policy owner for bodily injury or car damage caused by another automobile, whose owner does not have insurance.
Source:
Insurance Information Institute: What is covered by a basic auto policy?
Insure U: Consumer Guideto Auto Insurance
CarInsurance.com: Insurance Coverage Definitions
More Information:
Insure U-National Association of Insurance Commissioners
Insurance Information Institute
Consumer and Family Economics-University of Illinois Extension
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