Insurance is a service that covers the risk associated with anything. Insurance can be done for a living person or a non-living thing also. The insurances that are done on the life of a person or any creature are called life insurance whereas the insurance for any non-living thing is called general insurance. General insurance covers a wide range of risks associated with any non-living thing like a house or a car or any property or an armament. Generally, the insurance associated with a car is known as a motor or auto insurance which is taken to cover the risk of an accident or physical damage or theft to the vehicle or by the vehicle.
What Types of Risks are Covered?
Basically, auto insurance is done to cover the risks of expenses on the vehicles for damages caused by any physical or natural disaster. It covers the risk of accidents, theft, burns, damage caused by any sudden natural disaster and so on. The auto insurance also covers the liability of a third party if he is injured or dead. Damage of property of other persons also comes under this category of third party insurance. It was made mandatory in 1988. The auto insurance also covers the physical damage to the driver if kept.
Providers of Vehicle Insurance
There are various parties that provide a wide range of auto insurances. But the biggest party among them is named the State Farm which has acquired almost 18.1 percent of the market share. It is basically a group of insurance companies of the United States having headquartered at Bloomington, Illinois. The second most popular company is Government Employees Insurance Company. This provides auto insurance to the Americans. Not only these two, but Progressive Corporation, Allstate, and USAA are also the most popular companies here in the USA in terms of usages of auto insurance.
Coverage Limits of Auto Insurance
The auto insurance companies cover two things all over the world. The first is the physical damage of the vehicle or public property by the vehicle or any personal property and secondly the bodily injury of the owner or the driver or any third party. The facilities of the insurance are only available when the driver is having a legal driving license from any appropriate authority. The facilities can be further divided into two types.
Combined single limit where the physical damage of the driver and the car is covered under a single combined amount limit. It signifies that after an accident the third party and the first party will be provided aid from a single amount of insurance.
Split limit liability will provide aid to the different parties from the different amounts kept under insurance.
Salient Features of Auto Insurance
Here are some popular features that are available with car insurances.
- Covers the risk of the physical damage of the car and the driver as well. The second is the third party insurance which means coverage to the people or property that are damaged by the car.
- The auto insurance covers a lot of risks like the risk of physical damage by any accident, fire, burglary, theft, auto ignition and so on. Natural disasters are also included in it along with the carriage to one place to another by rail or road, elevator or lift and so on.
- The premium of the insurance is dependent on the type of vehicle, its model, age, capacity, fuel type and so on. Along with these, the age of the owner, place of living, experience also matters.