Motor Vehicle Insurance Policies

Car insurance has been termed to be among the most vital policy coverage that is required for any automobile. But this type of policy is likely to different from one country to the other and even between states, with respect to protection and cover that might change in ratios and percentages. A policy offers adequate protection to motor vehicle owners during times of accidents that involve vehicles covered by such policies along with extended coverage for damages that are caused to 3rd parties.

Risk categories covered by motor vehicle insurance policies

Broadly speaking, motor insurance policies tend to cover six major risk categories, premium payouts of which are based upon pricing of each of them separately.

  • 3rdparty legal or bodily injury liability: The driver might be required legally to pay compensation, in case his car is the cause of injury or death to any third person. Many of the policies are known to offer coverage against legal liabilities which are said to be caused by accidental damages towards property and third person. Coverage limit for death or injuries, however, is not fixed, and hence depends upon case to case basis.
  • Collision or accident cover: It offers injury and accident cover for policy holder, in case, he sustains injury when travelling in insured vehicle, besides damages to it.
  • Comprehensive: Few insurance policies tend to cite it as ‘vehicle damage’ that includes natural calamities. Generally, comprehensive excludes accidents, but includes damage to vehicle due to natural calamities like explosion, earthquake, flood, fire, lightning, landslide, hurricane, falling objects, along with theft, etc.
  • Uninsured motorists’ cover: It covers treatment expenses for insurance policy holder suffering from injuries that are sustained through collision or accident with uninsured vehicle or driver. Minimum liability coverage is recommended for personal or bodily injury protection as well as property damage.
  • Liability to Property damage: It offers coverage against damage by policy holder to any 3rdparty property. Property damage coverage is mostly defined.
  • Medical: It is also called PIP (Personal Injury Protection). It covers medical treatment related to injuries to occupants of insurance holder’s vehicle during an accident. It extends to include hospital or medical bills, lost wages including other causes that might vary.

The other elements which form add-on risks depend upon request or need from policy holders such as towing coverage, rental car cover and auto replacement.

Author’s Bio: The author has been working with for quite a long time. He writes articles mainly related to auto insurance to provide his readers with sufficient knowledge in the domain and to make well informed decisions.