By Joseph Kenny
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
your car itself.
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
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.
However, even comprehensive insurance will not fully cover
risks. First of all there is the issue that, as soon as you
a new car, its price suddenly drops significantly because it
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
was developed. This covers the difference in the actual value
your car, and the amount you still owe in payments. The growth
of vehicle leasing has also led to GAP insurance becoming more
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
someone else’s car, while driving it with their permission,
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 www.insure121.com/ where you will find
information, news and links to the leading providers of car
insurance in the UK.