Auto Insurance Primer

What is auto insurance? 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. 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.

Liability insurance covers only the last point, while comprehensive insurance covers all three. Even comprehensive insurance, however, doesn't fully cover the risk associated with buying a new car. Due to the sharp decline in value immediately following purchase, there is generally a period in which the remaining car payments exceed the compensation the insurer will 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 price of cars, extended term auto loans, and the increasing popularity of leasing gave birth to GAP protection. GAP waivers provide protection for consumers when a "gap" exists between the actual value of their vehicle and the amount of money owed to the bank or leasing company. In some countries including New Zealand and Australia market structures mean that people are more 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 other 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, when a family member comes of driving age they must be added on to the policy. Liability insurance generally does not protect the policy holder if they operate any vehicles other than their own. When you drive a vehicle owned by another party, you are covered under that party's policy. Non-owners policies may be offered that would cover an insured on any vehicle they drive. This coverage is available only to those who do not own their own vehicle.

Generally, liability coverage does extend when 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 other factors, the value of the insured's vehicle. This coverage may not apply to rental cars because the insurance company does not want to assume responsibility for a claim greater than the value of the insured's vehicle, assuming that a rental car may be worth more than the insured's vehicle. Some 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 some regions, the costs associated with not having access to the vehicle ("Loss of Use") is also covered.

More auto insurance information at auto insurance.

---

Insurance or Assurance - Do You Need Reassurance?

Insurance versus assurance: what is the difference?Should you care?Yes!!The world... Read More

The Awful Truth about Annuity and Insurance Leads

You see the websites, you see the ads: exclusive, never... Read More

Health Savings Accounts (HSA): How Do I Tell a Good One from a Bad One?

The Health Savings Account (HSA) is becoming well-known as an... Read More

The Life Insurance Quote Business is Booming, but is the Insurance Quote Accurate?

The life insurance quote business online is booming. Not only... Read More

Life Insurance, the Universe, and Everything

You may have noticed that life insurance is coming back... Read More

Car Insurance No Claims Bonus Explained

No Claims Bonus is a term used to describe the... Read More

Insurance Providers Weather the Storm While Consumers Flounder

We have just had the first year's anniversary of the... Read More

Finding California Truck Insurance

It's very easy to find California truck insurance on the... Read More

Theres No Problem Getting Texas Auto Insurance in Texas

Everything is big in Texas and so it is with... Read More

Finding Health Insurance for Self-Employed Individuals: A Guide For the Freelance Newbie

With a rise in those looking to venture out on... Read More

Inexpensive Life Insurance To Protect What You?ve Earned

Adequate life insurance to cover your income producing ability is... Read More

Medical Bankrupticies: What You Can Do To Protect Yourself

First the bad news: about 2,000,000 personal bankruptcies each year... Read More

What Answers To Questions For A Home Insurance Price Quote Will I Need To Know?

Lets face it, finding the best home insurance price quote... Read More

Why Dont Women Have Life Insurance?

Traditionally, life insurance companies solicited men as the main breadwinners... Read More

What You Need to Know About Auto Insurance

Let's be realistic, everyone needs to have auto insurance. Aside... Read More

Why Bother With Farmers Auto Insurance?

Farmers auto insurance is a very large insurance company that... Read More

Discount Auto Insurance - Get Low Rates And Superior Coverage

Auto insurance rates can be quite expensive. If you are... Read More

Who Else Wants to Understand Travel Insurance Policy Language?

Aren't all travel insurance plans basically the same?No. When you... Read More

Sleep-At-Night Coverage With A Private Health Insurance ( Affordable Health Insurance )

Health Insurance: a sense of dissatisfactionThe three C's, customization, consumerization... Read More

Why Boat Insurance Is A Necessity

Boat insurance is necessary for all boat owners who live... Read More

What Do You Mean My Auto Insurance Policy Doesnt Cover This!!

Auto insurance is an agreement between you and your insurance... Read More

Long Term Care Insurance

Long Term Care Insurance is needed in the event that... Read More

Sisters Are Insuring Themselves: Finance is the New Feminism

According to a study by LifeSearch, the number of women... Read More

Saving on Home Insurance: Tips for Cutting Costs

Everyone is searching for a way of cutting costs, a... Read More

Finding California High Risk Truck Insurance

California high risk truck insuranceIf your are in need of... Read More

Young Driver Car Insurance

It has become increasingly difficult to get young driver car... Read More

Home Insurance: Premium Protection In Case Mishap Takes A Rain Check

My whinstone house my castle is, I have my own... Read More

Insurance Claim: Collecting Your Lost Wages

A couple months ago you were toolin' on down the... Read More

How To Best Handle Health Insurance Plan Changes

Many economists have suggested and recent economic data indicates that... Read More

Insurance for Car Wash Fundraisers

Non-profit groups in this day and age need to watch... Read More

Guide to Car Insurance

Here is a useful guide to car insurance. Buying car... Read More

About Online Term Life Insurance Rates

Online term life insurance ratesHow simple it is today finding... Read More

Insurance Claim - Medical Insights And Expenses

There's nothing that has a greater impact on evaluating a... Read More