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How Does Car Insurance Accident Protection Work?

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Car insurance accident protection refers to the fact that a car insurance policy can protect you from financial loss in the event of a car accident. There are several different types of car insurance accident protection, each of which is designed to serve a different function.

Car Insurance Accident Coverage

When you get into a car accident, your insurance has several different policy provisions that may apply, depending on the situation. For example:

  • If you are at fault in the accident and the other party suffers property damage, the property damage liability coverage in your policy will protect you from having to pay to repair the property damage out of pocket. For example, if you cause $5,000 of property damage and you have a $500 deductible, your insurance company will pay $4500 to repair the property and you will only have to pay $500 out of pocket.
  • If you are at fault in an accident and the other party is injured, the bodily injury liability protection in your policy will pay the person's medical bills and lost wages. If the injured parties sues you, your insurance company will pay your legal fees in defending the claim and will also pay any settlement or damages awarded by a jury up to your coverage limits
  • If you are at fault in an accident, either with another person or with a stationary object or non-moving car, collision coverage will pay to repair or replace your vehicle. The insurance company will determine whether repair or replacement is appropriate, and send you a check either to repair the car or for the replacement value of the vehicle.
  • If you are in a car accident and the other party is at fault, normally, the other person's insurance should pay for your property damage and/or personal injury damage. However, if the other person doesn't have enough insurance to cover all of the damages you suffered, your underinsured or uninsured motorist coverage will kick in to pay the rest of the bills caused by the accident.
  • If you or a passenger are in a car accident and don't have medical insurance, personal injury protection coverage (PIP) can pay your medical bills.

How Does Insurance Accident Coverage Work?

After an accident occurs, you will contact your insurer and the insurer of the other party who was riving. The insurance companies will determine fault based on evidence from the accident, and based upon your statement and the other drivers statement. The insurance company will then determine which company is responsible for making payment. Payment will then be made, up to the limits of the policy protection.

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