An Commercial Auto Insurance describes a contract between an insurance company and the person who have purchased the insurance policy. The insurance policy is essentially a contract between both the insurance company and the insured, that determines the insurance claims that the insurance company is legally obligated to cover. In return for an initial fee, called the premium, the insured promises to reimburse the insurance company for financial loss resulting from perils explicitly covered in the insurance policy language.
There are three distinct types of insurance policies. General insurance contracts cover risks associated with weather, nature, fire and theft. Liability insurance contracts, on the other hand, are designed to cover damage and injuries resulting from libel, slander or malicious mischief. Personal injury protection insurance (PIP) is a special insurance product that covers disability-related expenses. PIP policies are often mandatory when a person owns a business.
One important aspect of an insurance policy is the endorsements. The most common endorsements are life, health and death. However, an insurance policy can also include product endorsements, legal endorsements, business endorsements, property endorsements, and voluntary endorsements. Property endorsements provide the insured a guarantee that the insured car will be repaired or replaced in the event of a loss. Legal endorsements give the insured a legal right to use the property mentioned in the insurance policy.
Whole Life Insurance policies have a level premium that remains fixed until the insured reaches a certain age. When an individual reaches this age they are often able to purchase either a decreasing or increasing premium. A decreasing premium keeps the total cost of the insurance policy flat throughout the insured’s life. Increasing premiums are typically reserved for individuals that are more at risk of dying prematurely, or for people that have a pre-existing medical condition. A basic insurance policy will pay a fixed amount regardless of whether you pass away or remain healthy.
The third-party insurance policy, also known as liability insurance, is another type of auto insurance. This type of insurance provides coverage on damages and injuries to other people. It is required by many states to be carried at all times. Carrying this type of insurance provides protection for both the driver and the passengers. In some cases, it is required to legally drive a vehicle.
Liability insurance is only one type of policy that carries a high premium. It is important to compare each of the insurance policies before determining what coverage is best. Some people may find it beneficial to carry combined coverage. Whatever coverage is selected, it is important to remember that premiums are charged based upon the coverage provided.