What types of auto insurance coverage are available in the United States? This question is often asked and very important, seeing it is compulsory to have automobile insurance.
The owner of the vehicle may be protected with different coverage types depending on what coverage the insurer purchases. Some states demand that owners of vehicles carry liability insurance coverage to ensure that their drivers can cover the cost of damages to people or property in the event of an automobile accident. Some states, for example Wisconsin, have more flexible “proof of financial responsibility” requirements.
Liability insurance covers claims against the policy holder in the US. Generally, any other driver of the insured vehicles, 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 to the policy. Liability insurance sometimes does not protect the policy holder if they operate any vehicles other than their own.
When you drive a motorcar owned by another person, you are covered under that party’s insurance. Non-owners insurance policies may be offered that would cover an insured on any car they drive. This coverage is accessible only to those who do not own their own vehicle and is sometimes required by the government for drivers who have previously been found at error in an accident. Non-owners insurance policies are also recognized as Named Operator Policies. Drivers whose drivers license have been suspended will find these policies useful.
In General, liability coverage continues when you rent a car. Comprehensive insurance policies (”full coverage”) usually also apply to the vehicle you rent, although this should be verified in advance. Full coverage premiums are based on, among other factors, the value of the insured’s automobile. This coverage, however, cannot 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 auto may be worth more than the insured’s vehicle.
Most rental car companies offer insurance to cover damage to the rental vehicle. The above policies may be unneeded for many users of credit cards, e.g. Visa and MasterCard, seeing that the companies now offer alternative collision damage coverage to rental cars provided that the transaction is processed while utilizing their cards. These benefits are restrictive to the types of vehicles that are covered.
Tags: auto insurance, car insurance, Insurance