Auto Insurance
Auto insurance is a contractual agreement between an individual or company and an insurance provider that promises to compensate the insured in the event of bodily injury or property damage as a result of driving. Auto insurance companies are required by law to provide adequate coverage for each policyholder, and they promise not to arbitrarily cancel or deny coverage when someone attempts to file a claim, although sometimes insurers will make mistakes and deny legitimate claims for that reason as well.
Auto insurance policies usually require drivers to maintain certain levels of financial responsibility for their vehicles, which can include maintenance fees. Insurance companies may cancel policies if drivers practice bad driving habits, such as excessive speeding or road rage.
Auto insurance policies also usually include provisions for uninsured and underinsured motorist coverage, which pays for coverage when the at-fault driver does not have sufficient coverage. This can be extremely important in the case of serious accidents. Having this kind of protection can enable accident victims to receive compensation for medical expenses, vehicle damage, lost income and other costs associated with a traffic accident even when the person responsible does not have adequate insurance to pay these costs.
It is important to realize that auto insurance policies are not automatically renewed unless a policyholder takes proactive steps to arrange for renewal within an appropriate time frame before existing coverages expire. People who do not take action to maintain their policies may find themselves operating as uninsured motorists, and they will not be able to recover damages in the event that they are injured in an accident.
Auto insurance is mandatory in all States, but each State has its own set of minimum financial responsibility requirements. Laws also vary from state to state regarding optional coverages. If a driver chooses to carry these types of coverage, he or she will typically have to pay extra fees for this protection. Optional coverages can include injury and funeral benefits, medical bills coverage and liability protection against lawsuits stemming from accidents.
The majority of auto insurance companies offer discounts for drivers who complete driver safety courses or have obtained certain safety certifications. Written and driving tests are often required in order to obtain these discounts, but they offer the most value to drivers who have maintained excellent driving records.
In addition, education about auto insurance and auto accidents is essential for all drivers. Knowledge about the specific coverages that are included in a policy can help owners avoid unnecessary expenses and provide them with peace of mind when they are behind the wheel. Auto accidents account for around 50 percent of motor vehicle deaths each year, which is why an understanding of these accidents and their causes is important for anyone involved in a car accident.
The information provided in this article is intended for general educational purposes only. It is not legal advice or a replacement for obtaining counsel from an attorney or licensed insurance agent for specific advice and direction. The information contained herein may not be used to form an attorney-client relationship with anyone, and you should not act, rely upon or place reliance on the information in this article without seeking professional counsel prior to and after reading it. There are serious consequences if important consequences are ignored; therefore, consult your attorney before making costly decisions based on the information contained herein. Please leave feedback regarding this article if you found it helpful or as helpful as possible . This article is designed to provide you with general information that may be helpful regarding auto insurance and related matters. If you are currently involved in an auto accident, please seek an attorney as soon as possible to discuss your legal rights. [ARTICLE END]
Source: http://www.autoinsuranceschool.com/auto_insurance_basics_1.html
Auto Insurance
An auto insurance policy is a contract between the insured and the insurance company. In exchange for a premium, the insurance company agrees to pay for losses suffered by the insured if they are caused by an accident or other covered peril listed in the policy, subject to various terms and conditions of the policy contract (exclusions).
The details of the policy are set out in words, but the legal arrangement is usually recorded and evidenced in writing, known as a policy document. (In some jurisdictions, the courts may require that an insurance contract be drafted in a particular form.) The terms and conditions of any such contract may be enforced by both the party to whom they were sold or given and by other parties who have entered into written agreements on their behalf.
Insurance companies perform a service for their customers, providing assistance with accidents that occur after the policy coverage period has expired. There is no premium charged for this service but customers must pay annual taxes payable to their state government and applicable federal government on their motor vehicle registration. The main reason for this is the current economic condition, where many people are losing their jobs (or are working part-time jobs and live in a state with high unemployment) and paying little or no insurance on their cars because they can no longer afford it.
In the case of a vehicle that is not insured at all, an excess may be applied to the car owner's bill. In the case of someone who purchases insurance but neglects to pay for years before a claim arises, it may be extremely difficult to collect. Many state governments have parking lot patrols, which issue tickets for parking in spaces that do not have valid insurance arrangements. They often check out drivers' driving records to make educated decisions about who should get tickets first. Insurance companies often report these incidents to the companies the drivers work for, who may have a say in deciding whether or not to hire them.
The insurance industry uses computerized tracking systems to track driving records and payment history. Since insurance can be hard to get after a few tickets, there is an incentive for drivers to avoid tickets in the first place. If a driver has multiple tickets, but only one accident (or even just a few accidents depending on state laws), she would have been better off if she had taken defensive driving courses, which can help prevent accidents from occurring.
Some insurance companies are now reporting policyholders to credit bureaus and reporting lapses of coverage or non-payment of premiums as "insurance claims. Some are going so far as to sue policyholders in order to force the policyholder to pay outstanding amounts if they leave the company, even with proof of having paid premiums.
When a driver has a lot of experience with accidents and moving violations, it is likely premiums will be very high unless she takes defensive driving courses which can reduce insurance rates. This is also true for vehicles that have excessive mileage.
In some cases, insurance companies will deny claim payments if they feel that there has been fraud or significantly improper behavior on the part of the policy owner, for instance by deliberately damaging their own vehicle and submitting an inflated repair bill or falsely claiming other drivers were at fault.
Conclusion:
Insurance companies perform a service for their customers, providing assistance with accidents that occur after the policy coverage period has expired. There is no premium charged for this service but customers must pay annual taxes payable to their state government and applicable federal government on their motor vehicle registration. The main reason for this is the current economic condition, where many people are losing their jobs (or are working part-time jobs and live in a state with high unemployment) and paying little or no insurance on their cars because they can no longer afford it.
The details of the policy are set out in words, but the legal arrangement is usually recorded and evidenced in writing, known as a policy document.
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Auto Insurance