How Car Insurance Works
Car insurance, which comes under the category of auto insurance, provides coverage for cars/automobiles and financial risks that arise thereof. Car insurance is a mandatory compliance in some states, though it definitely recommend always.
The working of a car insurance policy is quite simple. A person has to simply apply for the insurance policy and get an audit of the car done. During the audit, specifications of the car such as design, speed, safety features, and security are analyzed. Based upon these features, the insurance company quotes a policy. This quote contains all features of the policy and its coverage, such as what it will exactly cover and what it won’t, the interest and premium of the policy, compensation of the policy, etc. Finally, when you start paying the premium, the coverage of the policy is activated, and your car has insurance protection.
Car Accident Without Insurance
Customarily, after an accident, insurance companies send their representatives to the site of the accident in order to audit the damage. Then, based upon the audit as well as your claim, a settling compensation is given. Here’s the twist. The company, based upon the policy, might provide compensation for even the opposite party. This basically depends upon which party was at fault, and which wasn’t.
Car owners who have auto insurance get some of the amount of compensation, however, those who do not have any insurance policy covering their cars have to face quite a financially rough time. First of all, there are some state laws in accordance to which you will be fined. This happens prominently in cases where insurance coverage is mandatory. If your state does not make insurance mandatory, you will get away without a fine, but will have to bear the burden of repair. Another probability that one should not forget is that, the other party might sue you for damages.
After ending up in a car accident without having any insurance, there are some solutions which you can use in order to get out the mess.
- Salvage: A solution that is applicable for a car that has been damaged beyond repair. You can consider salvaging the car and selling off all its spare parts. In cases where the damage is extensive, salvage is a good choice, as you will be able to recover some finances.
- Secured Loan: A secured loan is an option that is viable for expensive cars or cars that have suffered minor damages. Securing a loan with the help of the car, and paying it off later is one option that you can strongly consider. The loan will help you pay off fines and compensations.
- Repair and Resale: Considering the fact that the damage to the car has been minimal, though not minor, you can also try to restore it and then sell it off. The sale will get you a decent amount, of which, you can use for compensation and fines.
It is safer and better to get a good insurance policy, than to be sorry when you have an accident without possessing insurance coverage.