Vehicle insurance , in the United States and elsewhere, is designed to cover the risk of financial liability or loss of a vehicle that may be encountered by the owner if their vehicle is involved in a collision resulting in property or physical damage. Most states require the owner of a motor vehicle to carry some minimum liability insurance. Countries that do not require car owners to carry car insurance include Virginia, where uninsured motor vehicle fees may be paid to the state; New Hampshire, and Mississippi that offer vehicle owners the option to post cash bonds (see below). Privileges and immunity clause Article IV of the US Constitution protects the rights of citizens in each country while traveling to another country. A motor vehicle owner usually pays a monthly insurance fee, often called an insurance premium. Insurance premiums paid by vehicle owners are usually determined by a variety of factors including the type of protected vehicle, the age and sex of each protected driver, their driving history, and the location where the vehicle is driven and stored. Credit score is also considered. Most insurance companies offer premium discounts based on these factors.
The insurance company provides the owner of the motor vehicle with an insurance card for a certain period of coverage that must be kept in the vehicle in the event of a traffic accident as evidence of insurance. Recently, countries began to pass legislation that the electronic version of insurance proof is now acceptable to the authorities.
Video Vehicle insurance in the United States
Coverage is generally
Consumers can be protected by various levels of coverage depending on the insurance policy they buy. Coverage is sometimes seen as 20/40/15 or 100/300/100. The first two numbers seen are for medical coverage. In example 100/300, the policy will pay $ 100,000 per person up to a total of $ 300,000 for everyone. The last figure includes property damage. Damage to this property may cover other people's vehicles or whatever you hit and destroy as a result of the accident. In some countries you should purchase Personal Injury Protection that includes medical bills, lost time at work, and many other things. You can also buy insurance if other drivers have no insurance or are under insurance. Mostly, if not all states require the driver to bring the obligatory liability insurance coverage to ensure that their driver can cover the cost of damage to other people or property in the event of an accident. Some states, such as Wisconsin, have a more flexible "evidence of financial responsibility" requirements.
Insurance provider
In the United States by 2015, the largest vehicle insurance providers, in terms of market share, are State Agricultural Insurance, Mutual Liberty Insurance, Allstate, Berkshire Hathaway (which operates as Geico), and The Travelers Companies. Insurance is guaranteed either by working with an independent insurance agent or with an insurance broker authorized to sell an insurance policy. Some may represent from some institutions, such as Guy Carpenter & amp; Companies or more and more online brokers are providing policy purchases through sites like Quote.com and Walmart.
Liability obligations
The liability coverage, sometimes known as Victim insurance, is offered for bodily injury (BI) or property damage (PD) in which an insured driver is held liable. The amount of coverage provided (fixed dollar amount) will vary from jurisdiction to jurisdiction. Regardless of the minimum, the insured can usually increase coverage (before loss) at an additional cost.
Examples of property damage are when an insured driver (or 1st party) drives into telephone poles and damages the pole; the obligation to pay for damage to the pole. In this example, an insured driver may also be liable for other costs associated with telephone pole damage, such as loss of service claims (by the telephone company), depending on the jurisdiction. Examples of bodily injuries are when an insured driver causes physical damage to a third party and the insured driver is held liable for the injury. However, in some jurisdictions, third parties will first cover coverage for accidental benefits through their own insurance company (assuming they have it) and/or must comply with the legal definition of serious disruption to have the right to claim (or sue) under the driver's policy the insured (or the first party). If a third party sues an insured driver, liability coverage also includes court costs and damage that the insured driver may incur.
In some states, such as New Jersey, it is illegal to operate (or consciously allow others to operate) motor vehicles that have no liability insurance coverage. If an accident occurs in circumstances that require accountability, both parties are usually required to bring and/or hand over copies of insurance cards to the court as evidence of liability.
In some jurisdictions: The range of liabilities is available either as a single joint boundary policy, or as a policy of division boundaries:
Single boundary limit
A single boundary incorporates coverage of property damage liability and coverage of body injuries under one single merged boundary. For example, an insured driver with a single joint responsibility limit strikes another vehicle and injures both the driver and the passenger. Payments for damages to other car drivers, as well as payments for injury claims to drivers and passengers, will be paid under this same coverage.
Split border
The split split responsibility liability policy divides coverage into coverage of property damage and coverage of bodily injury. In the example given above, payments for other driver's vehicles will be paid under the protection of property damage, and payments for injury will be paid under the scope of bodily injury.
The scope of a bodily injury liability is also usually divided into maximum pay per person and the maximum payment per accident .
Limits are often declared separated by slashes in the following form: "Body injury per person"/"Body injury per accident"/"property damage". For example, California requires this minimum coverage:
- $ 15,000 for injury/death to one person
- $ 30,000 for injury/death to more than one person
- $ 5,000 for property damage
This will be expressed as "$ 15,000/$ 30,000/$ 5,000".
Another example, in the state of Oklahoma, the driver must carry at least a minimum state liability limit of $ 25,000/$ 50,000/$ 25,000. If an insured driver bumps into a car full of people and is found by an insurance company to be responsible, the insurance company will pay $ 25,000 for one person's medical bill but will not exceed $ 50,000 for someone else injured in the accident. The insurance company will not pay more than $ 25,000 for property damage in the repair of the insured vehicle.
In the state of Indiana, the minimum liability limit is $ 25,000/$ 50,000/$ 10,000, so there is a greater property damage exposure because it carries only a minimum threshold.
Rent coverage
Generally, liability coverage purchased through private insurance companies extends to rental cars. Comprehensive policy ("full coverage") usually also applies to rental vehicles, although this must be verified first. The full coverage premium is based on, among other factors, the value of the insured vehicle. This coverage, however, can not apply to rental cars because insurance companies do not want to assume responsibility for claims that are greater than the value of the insured vehicle, assuming that a rental car may be worth more than the vehicle that is insured.
Most rental car companies offer insurance to cover damage to rental vehicles. This policy may not be necessary for many customers because credit card companies, such as Visa and MasterCard, now provide additional collision damage coverage to rental cars if lease transactions are processed using one of their cards. This benefit is limiting in terms of the type of vehicle covered.
Maine requires car insurance to rent a car.
Full coverage
Full coverage is a term commonly used to refer to a combination of comprehensive coverage and collisions (generally implied obligations.) Full coverage coverage is actually a wrong term because, even in traditional full coverage coverage, there are many different types of coverage, each. "Complete coverage" is a misnomer of laypeople who often cause drivers and vehicle owners to be poorly protected. Most responsible insurance agents or brokers do not use this term when working with their clients.
One common misconception in the United States is that vehicles financed through bank loans or credit unions must have "full" coverage in order for financial institutions to cover their losses in the event of an accident. Insurance requirements vary between financial institutions and individual states. The minimum deductible and liability limits (required by some leasing companies) will be described in the loan contract. Failure to bring the required coverage can lead to insurance of purchasing the payer and adding fees to the monthly payments or vehicle repossession. Vehicles purchased with cash or repaid by the owner are generally required to bear only liability. In some cases, vehicles financed through car dealers "buy here-pay-here" - where consumers (generally bad credit) finance cars and pay for dealers directly without banks - may require compromises and collisions depending on the amount owed for vehicles.
Collision
Collision coverage provides protection for vehicles involved in collisions. The collision range is subject to a deduction. This coverage is designed to provide payments for repairing damaged vehicles, or payment of the cash value of a vehicle if it can not be repaired or added up. Coverage coverage is optional, but if you are planning to finance a car or take out a car loan, the lender will usually demand you to bring a collision for the financial period or until the car is paid off. Collision Damage Waiver (CDW) or Loss Damage Waiver (LDW) is a term used by rental car companies for crash coverage.
Comprehensive
Comprehensive, also known as coverage other than collision, provide coverage, subject to deduction, for cars damaged by incidents that are not considered to be collisions. For example, fire, theft (or theft attempt), vandalism, weather, or impact with animals are a kind of comprehensive loss.
In addition, most insurance companies list "The Story of God" as a comprehensive coverage aspect. By definition, it includes events or events that are beyond human control. For example, a tornado, flood, hurricane, or hail storm will fall into this category.
Uninsured insurance/underinsured coverage
Uninsured/Underinsured Reach, also known as UM/UIM, provides coverage if the wrong party has no insurance, or does not have enough insurance. As a result, the insurance company pays the insured medical bill, then it will reconcile from the wrong side. This coverage is often overlooked and very important. In Colorado, for example, it is estimated in 2009 that 15% of drivers are not insured. Usually the limit corresponds to the limits of responsibility. Some insurance companies do offer UM/UIM in umbrella policy.
Some states maintain unapplied valuation funds to compensate those who can not take compensation from uninsured drivers. Typically, payments are no more than the minimum liability limit and the negligent driver remains responsible for substituting state funds.
In the United States, the definition of an uninsured/underinsured rider, and appropriate coverage, is defined by the law of the state. In some countries it is mandatory. In the case of uninsured coverage, two different triggers apply: a damage trigger based on whether the limit is insufficient to cover damage to the aggrieved party, and the limit trigger that applies when the limit is less than the limit of the aggrieved party. According to a 2009 survey by the Association of American Property Victims Association trade associations, 29 countries have a trigger limit while 20 countries have the triggers of damage. Another variation is whether a particular country requires the accumulation of different vehicle policy or policy limits.
Loss of usage
Loss of usage coverage, also known as rental coverage, provides reimbursement for rental costs associated with having an insured vehicle repaired due to a closed loss. /h4>
The scope of loan/rent payments, also known as GAP coverage or GAP insurance, was established in the early 1980s to provide protection to consumers based on buying and market trends.
Due to the sharp decline in value immediately after purchase, there is usually a period when the amount owed on a car loan exceeds the value of the vehicle, called "upside down" or negative equity. Thus, if the vehicle is damaged beyond economical repairs at this point, the owner will still owe thousands of dollars on the loan. Increased car prices, long-term car loans, and rising leasing popularity gave birth to GAP protection. The GAP waiver provides consumer protection when the "gap" exists between the true value of their vehicle and the amount owed to the bank or leasing company. In many instances, this insurance will also pay deductibles on the primary insurance policy. This policy is often offered at car dealerships as a relatively low cost add-on for car loans that provides coverage over the life of the loan. However, GAP Insurance does not always pay the entire loan value. These cases include but are not limited to:
- Payment of unpaid arrears due on loss
- Disapproval or payment extension (usually called skip or skip payment)
- Refinancing a vehicle loan after the policy is purchased
- Late fees or other administrative fees assessed after commencement of the credit
Therefore, it is important for policyholders to understand that they may still owe on loans even if GAP policies are purchased. Failure to understand this may cause the lender to continue their legal efforts to collect the balance and potential for damaged credit.
Consumers should be aware that some countries, including New York, require rental car lenders to include GAP insurance in the cost of the lease itself. This means that the monthly price quoted by the dealer must include GAP insurance, whether it is described or not. However, unscrupulous sellers sometimes prey on unsuspecting individuals by offering them GAP insurance at an additional price, above monthly payments, without specifying state requirements.
In addition, some vendors and insurance companies offer what is called "Total Loss Coverage." This is similar to ordinary GAP insurance but is different in that rather than paying negative equity on a vehicle which is a total loss, the policy gives a certain amount, usually up to $ 5000, against the purchase or rental of a new vehicle. Thus, to some extent the distinction makes no difference, that is, in both cases the owner receives a certain amount of money. However, in choosing the type of policy to buy, the owner should consider whether, in the event of a total loss, it would be more profitable for him to have a policy of paying off negative equity or providing a down payment on a new vehicle..
For example, assuming a total vehicle loss of $ 15,000, but where the owner owes $ 20,000, is a "gap" of $ 5,000. If the owner has traditional GAP coverage, the "gap" will be removed and he can buy or rent another vehicle or choose to do not do it. If the owner has a "Coverage of Total Losses," he should personally cover a $ 5000 "gap", and then receive $ 5000 for the purchase or rental of new vehicles, thereby either reducing monthly payments, in terms of financing or leasing, or the total purchase price in case of direct purchase. So the decision about what type of policy will be purchased, in many cases, will be informed by whether the owner can pay off negative equity in the event of total loss and/or whether he will definitively buy a replacement vehicle.
Towing
Withdrawal of vehicle coverage is also known as coverage of roadside assistance. Traditionally, car insurance companies have agreed to pay only the crane fees associated with the accidents covered by car insurance policies. This has left a gap in coverage for cranes associated with mechanical damage, flat tires and power outages. To fill that gap, insurance companies began offering car pickup coverage, which paid for vehicles not related to accidents.
Private property
Personal items inside an accidentally damaged vehicle are not usually covered under auto insurance policies. Any type of property that is not attached to a vehicle should be claimed under a home insurance policy or a tenant. However, some insurance companies will include unattached GPS devices intended for car use.
Assessment plan
Insurers use actuarial science to determine tariffs, which involve statistical analysis of various characteristics of the driver.
Maps Vehicle insurance in the United States
Public policy considerations
In the United States, automotive insurance covering liability for injury and property damage is required in most states, but different states apply different insurance requirements. In Virginia, where insurance is not compulsory, residents must pay a yearly fee of $ 500 per vehicle to the state if they choose not to purchase liability insurance. Punishment for not purchasing insurance varies by country, but often includes large fines, licenses and/or suspension or withdrawal of registration, and possible time of imprisonment. Typically, the minimum required by law is third party insurance to protect third parties against the financial consequences of loss, damage or injury caused by a vehicle.
California and New Jersey have enacted "Personal Acts Responsibilities" which put further pressure on all drivers to carry liability insurance by preventing uninsured drivers from recovering non-economic damages (eg compensation for "pain and suffering") if they are injured with any way when operating a motor vehicle.
North Carolina is the only state that requires drivers to have liability insurance before a license can be issued. North Carolina allows "fleet licenses" to be issued if the licensee has no insurance, but the fleet license allows only the driver to operate the vehicle owned and insured by their employer. The license holder must create a state form (DL-123) to prove that they have insurance, which requires the signature of the insurance agent, in addition to the ten dollar fee, to change the fleet license to full license.
Some countries require proof of insurance brought in the car at any time, while others do not. For example, North Carolina does not mention that proof of insurance should be brought in the vehicle; it does, however, require that drivers have information to trade with other drivers in the event of an accident. Some countries allow electronic insurance cards to be manufactured on smartphones
The Arizona Department of Transportation Research Project Manager John Semmens has advised that car insurance companies issue license plates and are responsible for the full costs of property injuries and damages caused by their licensees under the Disneyland model. Dishes will expire at the end of the insurance period, and licensees will need to return their plates to their insurance office to receive a refund of their premium. Uninsured driving vehicles will be easily recognizable because they will not have license plates, or plates will pass the marked expiration date.
Compulsory insurance debate
A brief history of car insurance
With the invention of cars in the late 19th century came the inevitable side effects of car crashes. When the automotive collision increases in frequency, it becomes clear that, unlike other lawsuits, which rely on personal liability, it is possible that the car needs to be regulated by law because "[t] here there is no way to convince that even if the error is judged car crash victim will be able to collect from tortfeasor. "
This led Massachusetts and Connecticut to create the first compulsory financial and compulsory insurance obligations. The 1925 Financial Liability Act of Connecticut requires the owner of a vehicle involved in a collision with damages over $ 100 to prove "financial responsibility to satisfy any claim for damages, by reason of personal injury, for, or death, everyone, at least $ 10,000. " These initial financial liability requirements only require vehicle owners to prove their fi nancial responsibility after their first collision. Massachusetts also introduced laws to deal with crash problems, but they are compulsory insurance, not legal liability. Automotive liability insurance is required as a prerequisite for vehicle registration.
Until 1956, when the New York legislature passed their compulsory insurance legislation, Massachusetts was the only state in the US that required drivers to get insurance before registration. North Carolina followed suit in 1957 and then in the 1960s and 1970s some other states passed similar compulsory insurance legislation. Since the beginning of the automotive insurance scheme in 1925 almost every state has adopted a compulsory insurance scheme.
Arguments that support mandatory auto insurance
Supporters of compulsory car insurance rely on the assumption that, at least some of the time, the person guilty of a car accident will not be able to pay for damage to another person's car. Since insurance has been required in many countries for a long time, the data to prove this theory is somewhat rare. However, car insurance advocates shall argue that:
- There is a risk of not paying in a car accident and mandatory car insurance is the best way to deal with this risk.
- Personal finance accountability laws are inadequate to correct the risk of unpaid, wrong, and obedient drivers.
- The best way to ensure that the driver who made a mistake will pay for damage caused is to ask for insurance before registration, and punish the driver if they fail to meet these requirements.
An argument against mandatory auto insurance
Insurance opponents must believe that it is not the best way to allocate risk among drivers. Arizona, Mississippi, New Hampshire, and Virginia do not require motor vehicle insurance. In Arizona, drivers may choose to deposit $ 40,000 to the State Treasurer in the form of a security deposit, cash, or bond. In Mississippi, drivers may choose to use cash, bonds, or bonds in a minimum amount of countries. In New Hampshire, vehicle owners must meet the requirements of personal responsibility; rather than paying monthly premiums, and proving that they can afford to pay in case of an accident. In Virginia, vehicle owners can pay an uninsured motorist $ 500 a year to a state DMV; But these costs are not insurance. Many insurance companies oppose mandatory auto insurance, for example: NAII (National Association of Independent Insurers). State Farm opposes compulsory car insurance for forcing the poor to choose between groceries and insurance. A study conducted by Dr. Robert Maril pointed out that, in poor areas of Arizona, 44% said they had trouble buying food or paying rent because of car insurance. A survey conducted by DPHHS Montana showed 12 out of 96 surveyed said car insurance was the reason for requiring food stamps.
Terms by country
The table below contains the minimum liability requirements for vehicle owners in the United States. They are divided into two categories: mandatory and not mandatory. See the table on the right for an explanation of the values.
High risk market
Insurers may not want to insure drivers (especially at an affordable price) with a very bad history, which has led countries to create "market residual" programs through which insurance providers are required to provide insurance. There are various ways that can be done, with the most common set of established risk plans and other programs including joint underwriting associations, reinsurance facilities, and in the case of Maryland state-owned funds subsidized by insurance companies.
See also
- SR-22 (insurance)
- Mexican Insurance
References
External links
- AARP (2012-07-01). "Car Insurance Rates - Average car insurance premium in every state and D.C. in 2010" . Retrieved 2012-09-20 . ( including maps)
- Insurance Research Institute
- Economic Damage Encourages Uninsured Drivers to All-Time High (PDF)
- Insurance Research Institute
Source of the article : Wikipedia
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