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CarsAuto Insurance Primer
by:
Belinda Waters
What is car insurance? Car insurance (or car insurance, motor insurance) is insurance consumers can purchase for cars, trucks, and another vehicles. Its primary use is to provide protection against losses incurred. By buying car insurance, depending on the type of coverage purchased, the user
may be protected against:
* The cost of repairing the vehicle following an accident
* The cost of buying a new vehicle if it is purloined or damaged on the far side
economic repair
* Legal liability claims against the driver or owner of the vehicle following the vehicle causation damage or injury to a third party.
Liability insurance covers only the last point, piece comprehensive insurance covers all three. Even as comprehensive insurance, however, doesn't fully cover the risk associated with buying a new car. Due to the sharp decline in value instantly following purchase, there is generally a period in which the remaining car payments exceed the compensation the insurance company wish pay for a "totaled" (destroyed, or written-off) vehicle. So-called GAP insurance was established in the early 1980's to provide protection to consumers based upon buying and market trends. The escalating cost of cars, extended term car loans, and the increasing quality
of leasing gave birth to GAP protection. GAP waivers provide protection for consumers once
a "gap" exists between the actual value of their vehicle and the figure of money owed to the bank or leasing company. In several countries including New Island and Australia market structures mean that folk are much likely to buy a nearly new car than a new car so this is less of a problem.
In the United States, liability insurance covers claims against the policy holder and generally, any another operator of the insured's vehicle, provided they do not live at the same address as the policy holder and are not specifically excluded on the policy. In the case of those living at the same address, they must specifically be covered on the policy. Thus it is necessary for example, once
a family member comes of drive age they must be accessorial on to the policy. Liability insurance generally makes not protect the policy holder if they operate any vehicles another than their own. Once
you drive a vehicle closely-held by another party, you are covered under that party's policy. Non-owners policies may be offered that would-be cover an insured on any vehicle they drive. This coverage is accessible only to those who do not own their own vehicle.
Generally, liability coverage makes extend once
you rent a car. However, in most cases only liability applies. Any additional coverage, such as comprehensive policies, i.e. "full coverage" may not apply. Full coverage premiums are based on, among another factors, the value of the insured's vehicle. This coverage may not apply to rental cars because the insurance institution makes not want to assume responsibility for a claim greater than the value of the insured's vehicle, assumptive that a rental car may be worth much than the insured's vehicle. Several states, such as Minnesota, may require that it extend to rental cars. Most rental car companies offer insurance to cover damage to the rental vehicle. In several regions, the cost associated with not having access to the vehicle ("Loss of Use") is besides covered.
Just about the author:
What is car insurance? A basic primer on car insurance.
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