What is a Car Insurance Policy?
A car insurance policy is a legally binding contract, an agreement between a car insurance company and the person who buys the car insurance policy. This is called the insured or the policyholder. In exchange for a payment, called the premium, the insurance company agrees to pay for certain types of loss or damage as outlined by the insurance policy, the contract. Should a loss occur which meets all of the requirements described by the terms the insurance policy, the loss is said to be covered by that policy. Why Do I Need Car Insurance? Your Car is a valuable asset which could be very expensive to repair or replace if is damaged. Part of what car insurance does is to pay for the repair or replacement of a vehicle which is damaged either as a result of your driving or from other causes not related to driving, such as theft or storm damage. Without insurance, most people would be unable to replace vehicles that are stolen or become severely damaged.
