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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.


MORE RESOURCES:

Insurance - Google News

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California wildfires: New bills aim to ease insurance headaches - Santa Cruz Sentinel


Santa Cruz Sentinel

California wildfires: New bills aim to ease insurance headaches
Santa Cruz Sentinel
Last year's deadly wildfires killed at least 45 people and destroyed or damaged more than 21,000 homes and 728 businesses, according to the California Department of Insurance. One thing became clear to Dianna Gaines after comparing notes with friends ...
California lawmakers propose bills to beef up disaster insurance coverage San Francisco Chronicle
California Commissioner and Legislators Unveil Wildfire Insurance Bills Insurance Journal
California Legislators Propose Greater Wildfire Insurance Protection CBS San Francisco Bay Area
Santa Rosa Press Democrat  - U.S. News & World Report
all 15 news articles »

GOP to Use Children's Health Insurance as Lure for Averting Shutdown - New York Times


New York Times

GOP to Use Children's Health Insurance as Lure for Averting Shutdown
New York Times
But Democrats would still be left with a difficult political decision: withhold their votes unless the plight of such immigrants, known as Dreamers, is addressed and risk a government shutdown, or vote to keep the government open and fund the Children ...

and more »

Troubles Push GE to Consider a Breakup - Wall Street Journal


Wall Street Journal

Troubles Push GE to Consider a Breakup
Wall Street Journal
General Electric Co. GE -2.93% is considering breaking itself apart, a dramatic move that would mark the end of one of the oldest and largest U.S. conglomerates. The 125-year-old business, which was once the most valuable U.S. company and still employs ...

and more »

How To See The Dentist Without Insurance - NBC 5 Dallas-Fort Worth


NBC 5 Dallas-Fort Worth

How To See The Dentist Without Insurance
NBC 5 Dallas-Fort Worth
A dental savings plan isn't health insurance but it does connect you to a network of dentists who have agreed to provide discounts on their services. Consumer Reports says you can also negotiate with your dentist to see if they can offer you a lower ...

and more »

Enlarging insurance pool makes sense - Baltimore Sun


Baltimore Sun

Enlarging insurance pool makes sense
Baltimore Sun
Dan Morhaim for his continuing focus on improving the state's procurement processes to benefit taxpayers (“Pooling insurance makes sense for Maryland,” Jan. 10). Once again, he proposes an innovative approach to saving taxpayer dollars and improving ...

GE reignites break-up talk after $11 billion insurance, tax hit - Reuters


Reuters

GE reignites break-up talk after $11 billion insurance, tax hit
Reuters
GE said it will provide another update on its review in the spring. A decision could come then, CNBC reported, citing sources close to GE, adding that a breakup was “likely.” GE's fourth-quarter $11 billion charge includes $6.2 billion after tax for ...
At GE, $6.2 Billion Charge for Finance Unit Hurts CEO's Turnaround Push New York Times
GE shares dive after 'deeply disappointing' $6.2 billion insurance portfolio charge CNBC
GE renews break-up talk after $11 billion insurance, tax hit Yahoo Finance
Seeking Alpha  - Washington Examiner  - Insurance Journal  - Zacks Investment Research
all 277 news articles »

Oklahoma Says Farmowners Insurance Program Insurer, Rockingham, not Licensed - Insurance Journal


Oklahoma Says Farmowners Insurance Program Insurer, Rockingham, not Licensed
Insurance Journal
The Oklahoma Insurance Department says a farmowners insurance program being advertised in Oklahoma is not valid because the insurer, Rockingham Casualty Company, is not licensed to operate in the state. In early January, Rockingham Casualty and Edmond ...

3.2 Million Americans Gave Up Health Insurance Last Year, Study Finds - New York Magazine


New York Magazine

3.2 Million Americans Gave Up Health Insurance Last Year, Study Finds
New York Magazine
Volunteers provide free dental services to patients at the Remote Area Medical (RAM) mobile clinic on July 21, 2017 in Wise, Virginia. Photo: John Moore/Getty Images. Donald Trump and his congressional allies spent most of last year trying to push 22 ...
Number of Americans without health insurance jumped by more than 3 million under Trump CNBC
Number of Americans without health insurance grows in Trump's first year, new figures show Los Angeles Times
The number of Americans without health insurance jumped by 3.2 million in 2017 — and Congress could be to blame Business Insider
ThinkProgress  - KGO-TV  - Insurance Journal  - Gallup News
all 53 news articles »

E&S Exit: State Auto's Rockhill Sells Environmental Insurance Renewals to CapSpecialty - Insurance Journal


E&S Exit: State Auto's Rockhill Sells Environmental Insurance Renewals to CapSpecialty
Insurance Journal
“CapSpecialty is committed to offering our wholesale brokers and insured customers access to strong environmental coverage, and Rockhill's appetite, products and focus on small to mid-sized business are all well aligned with those of CapSpecialty ...

and more »

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