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Insurance taken by people for their vehicle or automobile to cover it from various risks is known as automobile insurance. This type of insurance is taken by people to cover the losses that may occur due accidents. The insurance company can consider a vehicle to be totally destroyed if the cost of repairing it is more expensive than replacing it completely.

Coverage Levels

Automobile insurance taken can cover any or all of the following mentioned below;
1. Insured Party.
2. Insured Vehicle.
3. Third Party Insurance.

The policies clearly mention the circumstances under which the above mentioned are covered. An example of the same is vehicle insurance which is taken when the vehicle is to be insured to cover the losses that may occur to the vehicle after it meets with an accident.

Public Policy

The laws in various countries make it compulsory for a vehicle owner to take insurance for they vehicles. In many countries like the United States the penalties for not taking a vehicle insurance may change from one state to another, however the fine is fairly a large sum of money and may also lead to cancellation of license and the registration of the vehicle and may also lead to a jail term. In most cases the minimum requirement is to at least have a third party insurance to cover the third party when they are involved in an accident with insured vehicle. The coverage to their own vehicle is not compulsory in most countries.

Coverage Available

The coverage given to the insured may vary from one policy to another, depending on which one has been taken by the insurer. The policies in United States cover the claims made by the policy holder or any other person who operates the vehicle other than a person who stays at the same address as the insured person or any other person who has been specifically excluded in the policy. For people who are staying at the same place, the policy should specifically each one of them. Hence it becomes compulsory to add anyone who has attained the age to drive the vehicle to have his or her name specified in the insurance policy. The policy does not cover the policy holder if he is driving any other vehicle other than the one insured. If you are driving the vehicle of a third party the policy of the third party covers you. However there are policies known as the Non owner's policy which covers the insured person against any risk that may occur on any vehicle. This helps them cover themselves even if they are not driving a vehicle which does not belong to them.
When you rent a car the liability cover also gives you appropriate coverage against various risks. Rented vehicles are usually covered by comprehensive policies; however this should be clarified forehand. The premium is based on the cost of the vehicle insured among other related factors. However not many companies give such a coverage as they do not wish to give a cover which is more than the value of the insured vehicle. The cars rented from rental companies offer a cover to take care of the damage done to the vehicle. This at many times is not needed as people who have credit cards may be directly covered by the card company for damage done to rental cars if the transaction is done using their credit card.

Liability

A coverage that is provided to cover the damages that may occur due to the insured person having to pay legal charges due to the damages done by him after an accident is known as liability coverage. A very good example of this is when a car hits a light pole the insurance company will pay for the damages done to the pole and also pays for any other legal charges that may accrue due to the damage being done to the pole.
Liability Coverage is available in two forms Combined Single Limit Policy and Split Limit Policy;

Combined Single Limit

Under this type of cover the insurance company pays for all the damages done to he third party be it damage to a person or the vehicle. An example of this would be when a car rams into another car and damages the third partied car as well as its passengers; this policy pays for all their damages be it to the car or to the person.

Split Limits

In this type of coverage the policy cover both physical damage and bodily damage separately. This means that if the car meets with an accident with another person, the property damage coverage will cover the damage to the other party's car and the bodily injuries coverage will pay for the injuries that may have happened to the other person.

It should also be kept in mind that bodily injury liability is also split into two parts one being maximum payment per person and the second one is the maximum payment per accident.

Collision

This type of coverage covers the insured vehicle against the risk of accident. This helps to recover the money that will be needed to make repairs to the vehicle or to pay the vehicle market value of it's fully damaged. This form of coverage is optional and usually taken by car rental firms.

Comprehensive

A comprehensive coverage give coverage for the automobile insured if it is damages by any accident and that are not taken to be collisions. Some of the risks covered by comprehensive coverage are theft, fire, weather etc.

Uninsured/Underinsured Coverage

This form of coverage protects you if a third party has not taken insurance or has underinsured his vehicle and the insurance will not cover the damages done. In such a case your insurance company will work as the insurance company of the third party and make all the due payments.

Loss of Use

This type of coverage is taken by car rentals and this coverage pays for any losses or repairs needed to the vehicle after it was rented.

Loan/Lease Payoff

This type of coverage was started in the 1980's to protect the customers from buying and market trends. Once you buy a new vehicle the value of the vehicle reduces by a huge margin due to this if the vehicle is taken on lease the value of the loan amount is more than the actual value of the vehicle this is known as "upside down" or negative equity. And if the vehicle meets with an accident in this period and the whole car is damaged, the amount payable to the loan company will be very high. This feature of loan gave rise the GAP protection. GAP protection gives a cover to vehicle owners against any such risk that may arise after buying the vehicle. This type of policy is usually offered to automobile dealers at very low rates and this is usually added to the loan amount to control the risk of any such losses.

Many states in USA including NY have it compulsory by law to add GAP insurance as a part of the lease to be paid. What this would mean is that while you are paying the monthly installments for your vehicle, a small part of the money from it is paid to the insurance company to pay of this type of insurance cover. However it has also been noted that some dealers to earn extra bucks provide this as a separate cover and give it to its new customers.

Car Towing Insurance

The normal coverage offered by the automobile insurance is for any loss to the vehicle or for towing the vehicle when it meets with an accident. However this did not cover the charges of towing if the vehicle breaks down, has a flat tire or runs out of fuel. To cover this type of risks the companies started a new type of coverage known as car towing insurance where in the insurance companies pay up for the charges that may occur from losses suffered under any of the above circumstances.

What are the different types of auto insurance including no fault coverage, liability and comprehensive -There are a number of different types of auto insurance that are available to drivers. In the United States, auto insurance is mandatory and not a choice. However, drivers can enjoy a number of varying insurance offerings in order to allow them the flexibility in cost and coverage that they are looking for from their insurance company. Not all insurance companies offer the varying types of coverage, so it is very important for you to check with your company to learn the limitations of what they have to offer you.

HI'm buying a cheap, used car. Do I need to insure it? -Purchasing a cheap, used car is a great idea for individuals who are on a budget and looking to save money. However, it is still mandatory that, in order to drive the vehicle on public roads in the United States of America, the vehicle needs to be insured by an auto insurance company. Some individuals may choose still to not insure their vehicles, even though the laws of their state mandate that they have current auto insurance coverage on their vehicle(s) in operation. These people may be subject to heavy fines and penalties for operating their vehicles without insurance coverage in the event that they are caught without insurance.

How does my driving record affect my car insurance premiums? -In order to legally drive a vehicle on the roads of the United States of America, the vehicle being operated needs to have the appropriate auto insurance applied to it. Drivers are required to insure their vehicles in order to comply with the rules and regulations established by the federal government. Persons who have auto insurance will be required to pay car insurance premiums.

Is a Broken Windshield Covered Under my Auto Policy Deductible? -Since some of these instances seem covered and others may not, many people are left with the troubling question of whether or not their specific broken windshield is covered under their auto insurance policy and their deductible. In general, this will vary from person to person depending on their individual insurance company and the amount of their deductibles.

What You May Not Know About Automobile Insurance-Perhaps the most commonly purchased type of insurance is automobile insurance, also called driver's insurance or car insurance.

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