The Role of Insurance In A Car Accident

The Role of Insurance In A Car Accident

Are you also looking for the role of insurance in a car accident?

If yes, then you’re at the right place!

All car owners generally pay the premium of car insurance every month. They got to fall into claiming their policy only after an accident. Thus, in this article, we have mentioned all the roles of insurance in a car accident.

Let’s begin the guide by knowing how many insurances are and how they situationally work.

Types of Car Insurance And Their Roles


1. Liability Car Insurance

Liability car insurance is also popularly known as fault-based insurance. Simply put, this coverage activates when you are on the faulty side. In such a case, if any other pedestrian, cyclist, motorcyclist, driver, or passenger gets injured, your liability insurance will compensate on your behalf. However, it compensates to a limit.

Also read: Car Insurance: What Drivers and Vehicles are Covered?

It covers the other’s medical bills, lost income, or further damage. Liability insurance is mandatory insurance by state law. The main idea behind this compulsory liability car insurance is to show your financial responsibility if you cause an accident.

These insurance companies provide coverage in a specific manner:

  • They provide coverage of a minimum of $15,000 per injured person and a $30,000 minimum coverage for all people.
  • They provide coverage of around $5,000 to $10,000 for vehicle damage or any other property loss.

Vehicle owners have various options to showcase their financial responsibilities. But liability car insurance will help you much better.


2. No-Fault Car Insurance

In most states, “no-fault” car insurance is in more demand. People generally cover their damage and medical loss regardless of who is at fault.

In this insurance, you can claim only in the conditions you got in an accident and get injured. They have set their minimum amount to claim. Thus, you can not claim just for any common accident.


3. Uninsured Motorist (UIM) Coverage

UIM coverage refers to insurance that doesn’t determine who is at fault. Instead, it provides coverage to the policyholder. It covers your medical bills, car damage, and other losses. Coverage amounts are pre-decided in your insurance policy.

UIM is rarely compulsory in any state. Instead, it has additional coverage. Even in some states, insurance companies have to offer it to the customers, but they are free to refuse it. Remember one thing. The UIM doesn’t usually cover vehicle damage. Thus, you have to approach the other insurance policies to protect your vehicle from damage.


4. Underinsured Motorist Coverage

Likewise, the UIM, Underinsured Motorist Coverage, also comes into play when the at-fault driver lacks insurance. You can even claim this underinsured motorist coverage once the at-fault driver’s insurance limit exceeds. 

For example, you have lost $50,000 in an accident. The at-fault driver has an insurance claim of only $20,000, and you have the underinsured motorists coverage of $30,000. Then, you can claim the $20,000 from the driver and the rest of the $30,000 from your insurer.


Final Words

We hope you have understood all these types of insurance. All of them work based on their pre-decided situations. We hope you like the guide and find everything you should know about the role of insurance in a car accident.


Frequently Asked Questions (FAQs)

  • Does car insurance cover the accident?

Car Insurance refers to the coverage of your car and the third-party liabilities in case of an accident. However, most of the conditions will depend upon the T&Cs of your policy.

  • How to claim insurance if someone hits your car?

Let’s have a look at the step-by-step process to claim insurance if someone hits your car:

  1. Firstly, you need to inform your insurer about the accident.
  2. Secondly, you must register an FIR at the nearest police station.
  3. It is always better to take photos and videos of your scenario.
  4. Reach out to your insurance company and submit all the essential documents.
  5. Ask your insurer to send a surveyor to check everything.
  6. Finally, send your car for repair.
  • Why do insurance companies hire accident investigators?

Insurance frauds are widespread in today’s world. It affects the insurance company as well as the other policyholders. Insurance investigators deeply investigate everything about the case and lead the insurance companies on whether they need to provide coverage. They go through all the legal procedures only and figure out if there is any fraud.

  • Is the claim possible in case I’ve damaged my car?

Yes, you can claim insurance if you damage your car. All you have to do is immediately inform the insurer about the accident. Make all the paperwork and do whatever your respective insurer says. This is how you can easily claim your cover.

  • Can I claim insurance for car bumper damage?

You must have a comprehensive insurance plan to claim for the car bumper damage. It is not covered under the third-party insurance plan.

  • How many days do we have to claim the insurance?

All insurance companies have a pre-decided time frame for the policyholder to raise their claim. This time limit starts from 48 hours within the incident to 7 days from the accident date.

  • What are the three types of car insurance?

There are three types of car insurance, as mentioned below:

  1. Liability coverage insurance – It provides coverage in case you have damaged the other’s vehicle.
  2. Collision coverage insurance – It comes into play when you hit another car, person, or non-movable object.
  3. Comprehensive coverage – It acts as overall insurance.