Each payout that gets made by an insurance company is supposed to provide a claimant, plaintiff or policyholder with money to cover the losses that were created by an accident. In that way, such payouts are meant to help each of the recipients become financially whole.
Main types of insurance
Liability: This becomes useful when the driver of the insured vehicle has caused the accident. It is mandatory in every state. It covers the medical expenses for the person or family that was in the impacted vehicle. It does not cover the responsible driver, as per personal injury lawyer in Schaumburg.
No-fault: This guarantees coverage of any medical expenses, regardless of who was at-fault. It does not cover any property damage. If a driver has no-fault insurance, another driver cannot sue that same insured individual, unless that second driver, or an occupant of that driver’s car has sustained a decidedly severe injury.
Options that supplement the 2 main types of insurance
Uninsured motorist coverage: This is mandatory in some states. Insurance companies must offer it in every state, although car owners may not be required to buy it. This makes the insurance company accountable for any losses that the policyholder might experience, after being hit by an uninsured motorist.
Insurance companies introduced that particular option, after a large number of policyholders had chosen to pursue a lawsuit, in an effort to obtain coverage for damage that had been caused by an uninsured motorist. The option’s terms state that the policyholder must follow the claim process that has been established by the insurer.
Underinsured motorist coverage: This gets used if the at-fault driver’s insurance does not cover the cost of the claimed damages. Any policyholder that hopes to use this particular option, in order to make a claim, must have an amount of coverage that exceeds the value of the limits on the at-fault driver’s policy.
Property damage liability: This pays for damages to the other driver’s vehicle, if the insured driver has caused the vehicle-damaging accident. It acts as a supplement to the larger liability insurance. Unlike the basic liability policies, no option that concerns property damage has been declared mandatory in any state.
Collision coverage: This covers damage that resulted from the insured driver’s collision with a stationary object, other than an animal. In the past, this is what a driver had to use, in the event that an uninsured motorist hit him/her.
Comprehensive: This covers the cost for damage that has been done to a parked car. That would include things like theft of parts or accessories. It also covers damage caused by the weather. In addition, comprehensive guarantees coverage for any damage that might have been caused by an animal.