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Auto insurance protects you against financial loss in the event of a car accident, with a varying degree of success, depending on your coverage. Insurance mandates differ from state to state and are crucial to ensuring you’re covered after an accident.

“How does car insurance work?” is a broad question, so we’ve broken it down into a series of facts you should definitely know. If you’re concerned about your policy and what exactly you’re covered against, it may be worth contacting a Richmond car accident lawyer to ensure you’re protected should the worst happen.

Why Do I Need Car Insurance?

Car insurance is mandated by law in most states across the USA, though statutes differ on the level of cover you require. If you’re leasing or financing a car, you’ll likely be expected to have insurance, without which you may not be able to do so. Most states require basic auto insurance at the bare minimum.

The cost of car insurance varies, depending on the coverage you opt for. Higher costs generally mean more coverage, so it’s essential you do some research to find the right coverage for you. Cheaper coverage will often leave you with significant sums of money left to pay if an accident were to occur. 

What Does My Car Insurance Cover?

Auto liability coverage will mitigate against bodily injury costs and property damage costs. This is usually the minimum standard mandated by the state, though some notably only require proof of financial responsibility. Auto liability coverage likely won’t cover close to the total amount needed in the event of an accident, so other forms of coverage may also be desirable.

Comprehensive coverage, collision coverage, medical payment coverage, and personal injury protection are just some of the forms of coverage available. They each vary in what they cover, and as a responsible motorist, you should endeavor to do your research or seek advice to best calculate the coverage you require.

If you’ve caused an accident with a bicycle or collided with a pedestrian, then you could be facing a lot of expenses through medical bills for the other person involved.

How Does a Deductible Work?

Deductibles are a means of sharing risk between yourself and your insurer. The deductible you choose is the specific sum of money you’re responsible for paying toward an insured loss. For instance, if a car accident left you with a loss of $8,000 and you’d chosen a deductible of $2,500, your claims check would come to $5,500.

A higher deductible will often save you money on your monthly insurance plan. Bear in mind, however, that in the event of an accident, the payout you receive on an insured loss will be lower as a result. Therefore, choosing the right deductible is a matter of how much cost you’re willing to shoulder on your own if an accident occurs.

Ask an Attorney for Input After a Car Accident

If you’re still unsure how comprehensively your insurance policy covers you, talk with an experienced lawyer at The Estes Law Firm. You can reach us at 281-238-5400 or via our contact form for any guidance you need.