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Car Insurance

American Government Special Collections Reference Desk

Car Insurance

Sarah Keane
February 18, 2008

Car insurance or Vehicle insurance is one of the basic that everyone must know about. More than an essentiality, giving car insurance cover to your vehicle is your responsibility. Car insurance differs on many accounts depending on the provider and the car owner, too. It depends on the kind of coverage that the car owner purchases. There are two types of car policy. One that covers only the vehicle and another that covers the owner or driver too. And, if any new family member comes of driving age then he/she must be added on to the policy. In case, a person is driving another person’s vehicle, he/she is covered under that party’s policy. But, this rule applies to only those who do not have their own vehicle or have been involved in any previous accident.

A person can also apply for full coverage premiums. Car Insurance is an essential formality now a day. In fact, in some countries like United States it has been made compulsory to purchase car insurance with the purchase of the vehicle itself. Otherwise, the owner can be fined or can also call for the revocation of license. It has been made compulsory to purchase car insurance before one can drive on public roads. Another important aspect of Car insurance is third party insurance that provides protection to any third parties against any loss of property, life or injury that could have been caused by a vehicle. Car/Motor insurance provides insurance cover for either the insured party or the insured vehicle or the third party. You can also get your vehicle insured against theft, fire damage or accident damage.

The insurance companies provide insurance against a fixed sum of money for every time the vehicle is repaired through the insurance money. This sum is also known as ‘excess’ or ‘deductible’. And, if the driver is able to prove the other party’s fault, then, this ‘excess’ amount can be reclaimed too. One must be prepared to pay a fixed amount of premium that is fixed either by the government or by the insurance company, as per the rules set by the government. It can also be fixed by calculating ‘actuary,’ which is based on the statistical data. The premium amount can also vary according to car features, the coverage selected, driver’s profile and the usage of the car. The premium can also vary according to the gender of the holder as men are prone to be involved in accidents because they drive more miles than women. Likewise, teenage drivers with no previous driving record are likely to be charged higher premium rates.

Car insurance can also be according to the odometer based systems that depends on odometer mile rates. In this, the holders have to buy prepaid miles of insurance protection as per their needs. And the insurance ends with the end of the odometer limit, which gets recorded on the car’s insurance card. The purchaser had to buy more miles if he/she wishes to continue the policy.



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