Auto insurance (or car insurance, motor insurance) is insurance consumers can purchase for cars, trucks, and other vehicles. Its primary use is to provide protection against losses incurred as a result of car accidents.
By buying auto insurance, depending on the type of coverage purchased, the consumer may be protected against:
The cost of repairing the vehicle following an accident
The cost of purchasing a new vehicle if it is stolen or damaged beyond economic repair
Legal liability claims against the driver or owner of the vehicle following the vehicle causing damage or injury to a third party.
Most car insurance plans charge a premium based on several risk factors that are likely to have an impact on the frequency of occurrence or on the expected cost of future claims. The premium usually depends on the car characteristics, the coverage selected (deductible, limit, covered perils), the usage of the car (commute to work or not, predicted annual distance driven), driving history, as well as the age and sex of the driver. Usually a car insurance broker can offer several motor insurance plans.
In many countries it is compulsory to purchase auto insurance before driving on public roads. This is to protect third parties against the financial consequences of loss, damage or injury caused by a vehicle. Typically, coverage against loss of or damage to the driver's own vehicle is optional.
Car insurance can be quite costly, but it is far more expensive to forgo. Many states arrest and/or fine drivers found to be uninsured. Additionally, accidents, theft and damage can create financial chaos for uninsured/underinsured drivers.
Car insurance Rates can change with time and circumstance. Carriers typically issue policies for six months to one year. Review your policy regularly to make sure that your coverage and limits meet your current needs. Our suggestion is that you research two or three insurance companies and consult several brokers.
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