From Wikipedia, the free encyclopedia
Vehicle insurance (also known as auto insurance, car
insurance, or motor insurance) is insurance purchased for cars, trucks, and
other vehicles. Its primary use is to provide protection against losses
incurred as a result of traffic accidents and against liability that could
be incurred in an accident.Coverage levels
Vehicle insurance can cover some or all of the following items:
* The insured party
* The insured vehicle
* Third parties (car and people)
* Third party, fire and theft
* In some jurisdictions coverage for injuries to persons riding in the
insured vehicle is available without regard to fault in the auto accident
(No Fault Auto Insurance)
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.
Liability
Liability coverage is offered for bodily injury (BI) or property damage (PD)
for which the insured driver is deemed responsible. The amount of coverage
provided (a fixed dollar amount) will vary from jurisdiction to
jurisdiction. Whatever the minimum, the insured can usually increase the
coverage (prior to a loss) for an additional charge.
An example of Property Damage is where an insured driver (or 1st party)
drives into a telephone pole and damages the pole, liability coverage pays
for the damage to the pole. In this example, the drivers insured may also
become liable for other expenses related to damaging the telephone pole,
such as loss of service claims (by the telephone company), depending on the
jurisdiction. An example of Bodily Injury is where an insured driver causes
bodily harm to a third party and the insured driver is deemed responsible
for the injuries. However, in some jurisdictions, the third party would
first exhaust coverage for accident benefits through their own insurer
(assuming they have one) and/or would have to meet a legal definition of
severe impairment to have the right to claim (or sue) under the insured
driver's (or 1st Party's) policy.
In some jurisdictions: Liability coverage is available either as a combined
single limit policy, or as a split limit policy:
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