Everyone is Required to Carry Auto Insurance
Auto Insurance, also called Vehicle Insurance or Car Insurance: In the United States, insurance covering automobile accident liability for injuries and damage to the property of others is mandatory in most states, though enforcement varies from state to state. For example, New Hampshire does not require motorists to carry Liability Insurance, but in the state of Virginia drivers must pay the state a $500 annual fee per registered vehicle if they do not have Liability Insurance. Penalties for not having automobile Liability Insurance vary from state to state, but can involve a substantial fine, and /or license suspension or revocation, even going as far as courting possible jail time in places like North Dakota. Usually, the minimum insurance required by law is Liability Insurance to protect injured parties against financial losses caused by an at fault accident.
Auto Insurance In addition to the mandatory liability insurance that all vehicle owners must buy and maintain, auto insurance companies offer other optional coverages:
- Collision coverage: provides for loss or damage to your insured vehicle should it be involved in an accident, even one caused by you, or by another person driving your car**, subject to a deductible. This coverage provides money to repair the damaged vehicle, or pays the cash (blue book) value of the vehicle if it is not repairable (a total loss, or is totaled). Collision coverage: is optional, however if you are leasing or financing the vehicle, taking out a loan to purchase the vehicle, the lender will usually insist that you pay for collision coverage for the period of the loan.
** Usually Collision provides coverage for your vehicle in cases where other people, i.e. friends or family, occasionally drive your car, excepting that a family member who lives in the same residence must have been "added" to your policy beforehand for coverage to be effective, which usually involves an additional premium based on their driving record, etc.
- Collision Damage Waiver (CDW) is the term used by rental car companies should you elect to pay the rental car company an extra *premium* to insure the car against damage from collision or from comprehensive type losses, i.e. fire, theft (or attempted theft), vandalism, weather, or impacts with animals. In most cases you can save money by declining the CDW coverage as your own auto policy may cover you for damage to rented vehicles. Check your policy or ask your agent.
If you are traveling on business your employer may carry insurance which makes CDW coverage unnecessary, ask your employer to be sure. Also some credit cards will automatically provide this coverage should you charge the vehicle rental with them. Read your credit card agreement or call the number on the back of the card.
- Comprehensive coverage: provides for loss, subject to a deductible, to an insured vehicle that is damaged by an event, other than a collision with another vehicle. For example, fire, theft (or attempted theft), vandalism, weather, or impacts with animals are events that cause Comprehensive losses.
- Uninsured or Underinsured coverage:, also known as UM/UIM, provides coverage if an at-fault party either does not have insurance, or does not have enough insurance coverage to pay for the damage. In case you were struck by an driver without adequate insurance coverage, and you suffered damage to your auto, or even bodily injury, your insurance company would pay to repair your car, and pay your medical bills, and then would subrogate from (i.e. sue) the at-fault party.
- Loss of use: Loss of use coverage, also known as rental coverage, provides payment or reimbursement for expenses associated with having to rent a temporary replacement vehicle while your insured vehicle is being repaired due to a covered loss.
- Definition: Deduction: is the fixed amount you must pay each time your car is repaired through your car insurance policy. Normally the payment is made directly to the vehicle repair garage where you take the car to be repaired. If your car is estimated to be a total loss (or a write off), the insurance company will normally deduct the deductible from the settlement payment (blue book) it makes to you.
Note that in case the accident was the other driver's fault, but your own insurance ends up paying for the repair to your car, you should be able to have your deductible reimbursed by the other person or his insurance company.
Funny Accident Report Excuses
These excuses are from accident reports from one major insurance company. Drivers were asked for a brief statement describing their particular accident:
- 1. The other car collided with mine without giving warning of its intention.
- 2. I thought my window was down but found it was up when I put my hand through it.
- 3. A pedestrian hit me and went under my car.
- 4. The guy was all over the place. I had to swerve a number of times before I hit him.
- 5. I pulled away from the side of the road, glanced at my mother-in-law and headed over the embankment.
- 6. The accident occured when I was attempting to bring my car out of a skid by steering it into the other vehicle.
- 7. I was driving my car out of the driveway in the usual manner, when it was struck by the other car in the same place it had been struck several times before.
- 8. I was on my way to the doctor's with rear-end trouble when my universal joint gave way, causing me to have an accident.
- 9. As I approached the intersection, a stop sign suddenly appeared in a place where no stop sign had ever appeared before. I was unable to stop in time to avoid the accident.
- 10. The telephone pole was approaching fast. I was attempting to swerve out of its path when it struck my front end.
- 11. To avoid hitting the bumper of the car in front, I struck the pedestrian.
- 12. My car was legally parked as it backed into the other vehicle.
- 13. An invisible car came out of nowhere, struck my vehicle and vanished.
- 14. When I saw I could not avoid a collision, I stepped on the gas and crashed into the other car.
- 15. The pedestrian had no idea which direction to go, so I ran him over.
- 16. I saw the slow-moving, sad-faced old gentleman as he bounced off the hood of my car.
- 17. Coming home, I drove into the wrong house and collided with a tree I don't have.
- 18. The indirect cause of this accident was a little guy in a small car with a big mouth.
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