Auto insurance or motor vehicle insurance is intended to protect the owner of a motor vehicle and others for loss due to accidents. In more expensive policies the owner may be reimbursed for theft, fire, hail damage or other loss. Basic motor vehicle insurance is mandatory when the vehicle is operated on a public road.
A minimum amount of insurance is required by various state laws. Basic coverage will commonly insure the following:
• The owner and passengers for a certain amount of medical expenses if injured in an accident;
• The owner and passengers for a certain amount of lost wages caused by the accident;
• The driver of another vehicle and its occupants for damages, including medical expenses, lost wages and property damage, provided the owner was at fault in the accident;
• A pedestrian, if the owner was at fault in striking the pedestrian;
• For property damage if the owner’s vehicle negligently causes damage on another’s property.
Payments for medical expenses and lost wages to the owner and vehicle passengers are paid regardless of the fault in the accident. Most states have a minimum amount of coverage a policy must pay. For an additional premium, the owner can obtain additional coverage. For payments to occupants of other vehicles, pedestrians and others, it must be shown that the owner was at fault in causing damage.
For an additional premium, an owner can be covered for damage to his or her own vehicle, regardless of fault in the accident. This is normally referred to as collision coverage.
Comprehensive coverage will cover collisions and in addition, a wider range of damage to the vehicle. It will cover theft of the vehicle, fire, hail damage, vandalism, etc. It will usually cover glass breakage, whether it is the windshield, side windows or back window. Another common option in motor vehicle insurance is emergency assistance. In the event of a breakdown, the insurer will pay to have the vehicle towed.
Driving without insurance, in addition to being illegal, is an extremely risky action. One never knows when an accident will occur, whether or not the driver caused it. With the cost of medical expenses and new vehicles, a simple accident can end up costing the uninsured tens of thousands of dollars