Auto insurance is a form of insurance available to consumers who
own cars, trucks and other vehicles. It covers the insured party
against the risks involved in owning or driving a vehicle. This
may be a car accident, damage caused to other cars or property,
loss to passengers in your car, and damage to your car itself.
Optional Covers
There are different levels of insurance available depending on
what risks you wants to cover. You can cover against the costs
of repairing your vehicle after an accident. You can cover the
cost of purchasing a new car should yours be stolen or damaged
beyond repair. These are optional covers.
Liability insurance on the other hand is compulsory for all
drivers. This will cover the risk of claims being made against
you as the driver or owner of the vehicle that caused damage to
the property of another, the vehicle of another, for medical
expenses of others injured as a result of an accident, including
passengers in your car. If you have liability insurance, it will
only cover these risks. If you have comprehensive insurance it
will cover also the risks to yourself and your own vehicle.
GAP Insurance
However, even comprehensive insurance will not fully cover your
risks. First of all there is the issue that, as soon as you buy
a new car, its price suddenly drops significantly because it is
no longer new. It is used. So if you were to destroy your car
the day after buying it, the insurance company would likely
assess the value as something less than what you paid for it,
even though you may still owe a good deal more than that in
payments and financing.
To cover the chances of this happening, so called GAP insurance
was developed. This covers the difference in the actual value of
your car, and the amount you still owe in payments. The growth
of vehicle leasing has also led to GAP insurance becoming more
important.
Extra Cover
In the US, the insurance policy will generally cover the owner
of the vehicle and any others who drive the vehicle so long as
they do not live at the same address. For those living at the
same address, you should have them specifically added to your
insurance policy for an extra fee. This means that if you crash
someone else's car, while driving it with their permission, you
will be covered by their policy, not your own. Non-owner
policies are available to cover you on other people's cars but
these will only be available if you do not own your own car.
About the author:
Joseph Kenny is the webmaster of the insurance site
http://www.insure121.com/
where you will find information, news and links to the leading
providers of
car
insurance in the UK.
