Vehicle insurance
Insurance (also known as gap insurance, car insurance, or motor insurance) auto insurance is insurance purchased for cars, trucks, motorcycles, and other vehicles on the road.
Its primary use is to provide financial protection against bodily injury resulting from bodily damage and/or from traffic collisions and also against liability that may arise therefrom.
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The specific terms of auto insurance vary with the legal regulations in each area.
Additionally, the vehicle may provide financial protection against theft and possible damage to the vehicle sustained from things other than traffic collisions to a lesser degree auto insurance.
Types of auto insurance
Depending on the specifics of insurance protection and the risks covered by insurance, there are:
- Car insurance against theft and damage ( casco );
- Voluntary third-party liability insurance;
- Compulsory third-party liability insurance ;
- Insurance against mechanical and electrical breakdowns;
- Accident insurance for drivers and passengers ;
- Third-party liability insurance for those traveling abroad ( Green Card ).
Car insurance against theft and damage (hull or auto hull)
This type of insurance provides protection for the vehicle against the risk of theft or damage to the vehicle as a result of an accident, the actions of third parties, or natural disasters. As a rule, insurance risks include road accidents, theft, theft, damage by third parties, fire, the explosion of a vehicle, natural disasters ( lightning strikes, storms, hurricanes, downpours, hail, earthquakes, mudflows landslides, landslides, shifts, high waters, floods ), animal attacks, objects falling on the car, etc.
Third-party liability insurance
The object of insurance is the damage that the owner of the insured vehicle may cause to third parties or their property in the process of using the vehicle. This type of insurance can be compulsory (OSAGO) or voluntary.
Insurance against mechanical and electrical breakdowns
Usually, this service is included in the factory warranty, but if the warranty has not been provided by the manufacturer or has already expired, it is possible to conclude a breakdown insurance contract. Includes vehicle repair and repair of mechanical and electrical breakdowns after the expiration of the factory warranty. In case of failure of any auto component, the insurance company will pay for the replacement of this part and repair.
Accident insurance for drivers and passengers
The object of insurance is the damage that may be caused to the life and health of the driver or passengers of the insured vehicle in the event of an accident.
Motor third-party liability insurance for those traveling abroad
When traveling abroad vehicle owners, an international motor third-party liability insurance policy Green Card is issued.
The object of insurance under the Green Card policy is the property interests of the owner and driver of the vehicle associated with their obligation to compensate for losses caused by the driver to third parties as a result of an insured event during foreign trips in the countries that are members of the Green Card agreement.
Coverage level
Vehicle insurance may cover some or all of the following items:
- Insured Party (Medical Payment)
- Damage to property caused by the insured
- Insured Vehicle (Bodily Damage)
- Third parties (car and people, property damage, and bodily injury)
- Third-Party Fire and Theft
- In some jurisdictions, coverage for injuries to persons riding in the insured vehicle is available without regard to the auto accident at fault (no-fault auto insurance)
- If yours is damaged, the cost is to rent a vehicle.
- Cost to tow your vehicle to a repair facility.
- Accidents involving uninsured motorists.
Different policies specify the circumstances under which each item is covered. For example, a vehicle can be insured against theft, fire damage, or accident damage independently.
Extra
An additional payment, also known as a deductible, is a fixed contribution that must be paid each time a car is repaired with charges billed to a motor vehicle insurance policy. Usually, this payment is made directly until the owner of the accident repair "garage" (the term "garage" refers to an establishment where the vehicle is serviced and repaired) collects the car. If a car (or "total,") is declared a "write-off," the insurance company will additionally deduct the agreed-upon policy from the settlement payments it makes to the owner.
If the accident was the fault of the other driver, and the fault is acknowledged by the third-party insurance company, the vehicle owner may be able to recoup the additional payment from the other person's insurance company.
Mandatory Extras
There is a mandatory additional minimum additional payment the insurance company will accept on the insurance policy. Minimum excesses vary according to personal information, driving record, and the insurance company.
Voluntary addition
To reduce the insurance premium, the insured party may offer to pay a higher excess (deductible) than the mandatory excess demanded by the insurance company. Mandatory excess, above, is the amount agreed to be paid in the event of a claim on voluntary excess and on the policy. A large addition reduces the financial risk incurred by the insurance company, as the insurance company is able to offer a significantly lower premium.
Based on premium charges
Main article: Auto insurance risk selection Depending on the jurisdiction, the insurance premium can be either mandated by the government or determined by the insurance company, in accordance with a framework of rules laid down by the government. Often, the insurance company will have more freedom to set the price on bodily damage coverage than on compulsory liability coverage.
The premium is not mandated by the government, it is usually derived from a scribe's calculation, based on statistical data. The premium can vary depending on several factors that are believed to have an impact on the expected cost of future claims. Those factors can include car characteristics, the profile of coverage (deductible, limit, hazards covered), selected driver (age, gender, driving history), and car use (wear or not driven, annual distance prediction).
Gender
On March 1, 2011, the European Court of Justice decided insurers that used gender as a risk factor when calculating insurance premiums were in violation of EU equality laws. The Court ruled that car insurance companies were discriminating against men.
Age
Teen drivers who have no driving record will have higher car insurance premiums. However, young drivers are often offered discounts if they start further driver training on recognized courses, such as the Pass Plus scheme in the UK. Many insurance companies in the US offer a good grade discount for students with a good academic record and a resident student discount for those who live away from home. Insurance premiums, in general, Some insurance companies offer "stand-alone" especially car insurance policies for teens with lower premiums reduced at the age of 25. By placing restrictions on teenagers' driving (forbidding driving after dark, or giving rides to other teens, for example), these companies effectively reduce their risk.
Senior drivers, reflecting the lower average miles driven by this age group, are often eligible for retirement exemptions. However, rates may increase for senior drivers after age 65, due to the much-increased risk associated with older drivers. Typically, increased risk for drivers over the age of 65 is associated with slower reflexes, reaction times, and a greater risk of injury.
Marital status
Statistics show that policy owners who are married often receive lower premiums than single individuals, so married drivers have on average fewer accidents than the rest of the population.
Vehicle classification
Two of the most important factors to know in determining underwriting risk on motorized vehicles are performance capability and retail cost. The most commonly available providers of auto insurance either have underwriting restrictions against vehicles that are designed to be capable of high speed and performance levels, or vehicles that retail above a certain dollar amount.
They are more expensive to replace, as vehicles that are generally considered luxury automobiles usually carry a more expensive physical damage premium. Vehicles that can be classified as high-performance auto-rickshaws will generally carry higher premiums because there is a greater opportunity for risky driving behavior.
Motorcycle riders face various physical risks while on the road because motorcycle insurance carries lower property damage premiums because the risk of damage to other vehicles is less. There may be far higher liability or personal injury premiums. The risk classification on automobiles also considers the statistical analysis of information theft, accidents, and mechanical malfunctions in every given year, and auto model.
Distance
Some car insurance plans do not differ with respect to how much the car is used. There are however low mileage discounts offered by some insurance providers. Other methods of discrimination would include the up-street distance between a subject's ordinary residence and their ordinary, daily landmarks.
Reasonable distance estimate
Another important factor in determining car insurance premiums involves the annual mileage put on the vehicle, and what is due.
Especially in urban areas where common traffic routes are known where, driving to and from work a specified distance every day, no longer works, compared to how a retiree might use their vehicle presents different risks.
It has been common practice that the information was provided entirely by the insured, but some insurance providers have started to collect odometer readings regularly to verify the risk.
Odometer based system
Categorized odometer mile rates in cents per mile now (1986), advocating a type of usage-based insurance. After the company has implemented the risk factors and has accepted the per-mile rate offered by the customer, then the customers like to buy gallons of petrol (liters) of petrol, prepaid insurance cover as needed buy miles.
Insurance automatically expires when the odometer limit (recorded on the car's insurance ID card), is reached until more distance is purchased. Customers know when to buy more and keep track of miles on their own odometer.
The company does no after-the-fact billing of customers, and the customer is not required to estimate a "future annual profit" figure for the company to receive a discount. In the event of a traffic stop,
Critics point to the possibility of cheating the system by tampering with the odometer. While newer electronic odometers are difficult to roll back, they still hold the odometer wires and can be defeated by reconnecting them later. However, as the Cents Per Mile Now website explains:
As a practical matter, resetting odometers requires expertise along with equipment that makes theft insurance risky and uneconomical. For example, for theft 20,000 miles [32,200 km] of continuous protection, reset to be done at least nine times, to keep the odometer reading within narrow would have a 2,000-mile [3,200-km] cover range.
There are also powerful legal barriers to this kind of insurance protection theft. Odometers have always served as measuring devices for the resale value of a business or official travel, rental and leasing charges, warranty limits, mechanical breakdown insurance, and cents per mile tax deduction or refund.
Odometer tampering, detected during claim processing, voids insurance and, under decades-old state and federal law, is punishable by hefty fines and prison.
Rewards for driving less under the cents per mile system are distributed automatically without the need for administratively cumbersome and costly GPS technology. For the first time, the uniform per-mile risk measurement provides the basis for statistically valid rate classes.
The insurance company automatically keeps pace with the increases in premium income or driving activity costs but rather lowers the premiums when driving is decreased, resulting in insurance company demand for rate increases and insurance companies For today's fall stops cutting back on decreases.
GPS based system
In 1998, Progressive Insurance Co. While drivers tracked driving behavior and reported results via cellular phone to the company that received an exemption to install a GPS-based device, policyholders were reportedly more worldwide.
In what is referred to as Telematic are more bothered about paying for expensive equipment than they were over privacy concerns. In the years since the program was discontinued in 2000, several policies (including progressive insurance) have been trialed and successfully introduced. 'Telematic' policies are generally based on black box insurance technology, such as Such devices are derived from vehicle theft and fleet tracking but are used for insurance purposes.
Since 2010 GPS-based and Telematic insurance systems have become more mainstream in the auto insurance market, not just aimed at the specialized auto fleet market or high-value vehicles (with an emphasis on vehicle theft recovery).
Modern GPS-based systems are branded as 'PAYD' pay-as-you-drive insurance policies, 'PHYD' since 2012 smartphone auto insurance policies such as, which use smartphones as a GPS sensor to drive or pay you.
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OBDII based system
Progressive Corporation launched Snapshot to give drivers a customized insurance rate based on recording how, how much and when their car is driven. Snapshot is currently available in 46 states as well as the District of Columbia.
As insurance is regulated at the state level, Snapshot is not currently available in Alaska, California, Hawaii, and North Carolina. Driving data is transmitted from the company using an onboard telematic device. The device (All gasoline vehicles in the United States built after 1996 have an OBD II.) Connects to a car's onboard diagnostic (OBD II) port and transmits the speed, time of day, and a number of miles the car is driven.
Cars that are driven less frequently, in less-risky ways, and at less-risky times of day, You can get big discounts. Progressive has received patents on its methods and systems for implementing use-based insurance and has licensed these methods and systems to other companies.
Metromile also uses an OBDII-based system for its mileage-based insurance. They offer true pay-per-mile insurance where behavior or driving style is not taken into account, and the user only pays a base rate with a fixed rate per mile. The OBD II device measures gain and then transmits gain data to the server.
It is intended to be an affordable car insurance policy for low-mileage drivers. Metromile is currently only offered on private car insurance policies and is available in California, Oregon, Washington, and Illinois.
Credit rating
Insurance companies have started using the credit ratings of their policyholders to determine the risk.
Drivers with good credit scores get lower insurance premiums, as they are more financially stable, more responsible, and have the financial means to better maintain their vehicles, that is perceived. Those with low credit scores may have their premiums raised or the insurance canceled outright.
It has been shown that good drivers with spotty credit records can be charged higher premiums than bad drivers with good credit records.
Transactional Insurance
The use of intrusive load monitoring has been proposed to detect drunk driving and other risky behavior. A US patent application combining this technology with a usage-based insurance product to create a new type of behavioral-based automatic insurance product is currently open for public comment on the patent on peer-to-peer. See Security by Behavior. Behavior-based insurance focused on driving is often called telematics or Telematics2.0 in some cases monitoring focus on behavior analysis such as smooth driving.
Repair insurance
globe icon. The examples in this section deal primarily with the United States and do not represent the perspective and a worldwide view of the subject. Improve this article and discuss this issue on the talk page. (September 2012)
Auto repair insurance is an extension of car insurance available in all 50 of the United States that covers the natural wear and tear on a vehicle independent of damages related to a car accident.
Some drivers choose to buy insurance as a means of protection against costly breakdowns unrelated to an accident. Unlike more standard and basic coverage such as comprehensive and collision insurance, vehicle repair insurance does not cover when it is damaged in a collision, during a natural disaster, or at the hands of vandals.
For many people, this is an attractive option for protection after the warranty on their cars has expired.
Providers may also offer subdivisions of auto repair insurance. Standard repair insurance covers wear and tear of vehicles and does not break down naturally.
Some companies will only offer mechanical breakdown insurance, which covers essential repairs only when fragile parts need to be fixed or replaced. These parts include transmissions, oil pumps, pistons, timing gears, flywheels, valves, axles, and joints.
