In many states, an insurance policy is mandatory. Thirty-eight states in the US stipulate a fault-based policy. In this policy, the insurance company of the person at fault pays for the damages to the other party in any accident.
The terms of any policy are very exhaustive. It would pay you to study them so that you know the procedures in event of an accident. They list out the rights and duties of the policyholder as well as the obligations of the insurance carrier. Broadly speaking some of the major terms are outlined below:
O As the insured, you are under obligation to inform your insurance provider immediately immediately after an accident.
O In this event, you are obliged to extend all possible cooperation.
O You will give your insurance provider access to any legal documents related to the accident.
O You will subject yourself to a medical examination at a cost if required.
O You will give the insurance provider access to your medical records.
The policy would then go on to elaborate on their responsibilities in all foreseeable situations that may arise. These are broken down into several parts illustrating on the extent of their liability and involvement in these situations.
Fault-based policies can be made comprehensive that is the coverage could include and pay for the damages to your car resulting from vandalism, theft, or natural calamities. You could add collision coverage which would cover the damages in any form of collision. Other additions are coverage from an accident with an uninsured or under insured driver, and medical expenses to yourself or the occupants of your car. These are optional.