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When a car owner suffers a loss, auto insurance companies provide reimbursement to help cover the cost of necessary repairs or a replacement vehicle. In the case of a car accident that involves more than one vehicle, the insurance of the driver at fault usually covers the cost of repairs for all cars.
Personal auto insurance is reserved for individuals and can cover one person, a couple or an entire family of drivers. Business auto insurance covers a company's fleet of vehicles.
Bodily injury and property damage liability auto insurance policies provide payment if an insured vehicle causes physical injury to a person or damages a house or other structure during the course of an accident. Uninsured motorist coverage helps pay for damage to an automobile if the vehicle is hit by a driver who does not have car insurance.
Most auto insurance policies feature a deductible, an amount that the insured must pay out-of-pocket before receiving any reimbursement from the policy. The amount of the deductible varies from policy to policy.
As of March 2010, the average cost of auto insurance was $1,000 to $4,000 per year, reports CostHelper.com.
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