Vehicle insurance also known as car insurance, motor insurance or auto insurance is insurance for cars, trucks, motorcycles and other road vehicles. Its primary use is to provide financial protection against physical damage and/or bodily injury resulting from traffic collisions and against liability that could also arise there from.
The specific terms of vehicle insurance vary with legal regulations in each region. To a lesser degree motor insurance may additionally offer financial protection against theft of the vehicle and possibly damage to the vehicle, sustained from things other than traffic collisions, such as keying and damage sustained by colliding with stationary objects.
Motor Insurance insures you against damage caused to someone else or their property, including your passengers, as the result of an accident. It doesn’t cover your car against repair or replacement.
Auto repair insurance is an extension of car insurance available in all 50 of the United States that covers the natural wear and tear on a vehicle, independent of damages related to a car accident. Some drivers opt to buy the insurance as a means of protection against costly breakdowns unrelated to an accident. In contrast to more standard and basic coverage’s such as comprehensive and collision insurance, auto repair insurance does not cover a vehicle when it is damaged in a collision, during a natural disaster or at the hands of vandals.
For many it is an attractive option for protection after the warranties on their cars expire. Providers can also offer sub-divisions of auto repair insurance. There is standard repair insurance which covers the wear and tear of vehicles, and naturally occurring breakdowns. Some companies will only offer mechanical breakdown insurance, which only covers repairs necessary when breakable parts need to be fixed or replaced. These parts include transmissions, oil pumps, pistons, timing gears, flywheels, valves, axles and joints.
When buying car insurance in the United Arab Emirates, traffic department require a 13-month insurance certificate each time you register or renew a vehicle registration.
Why is car insurance very important? Widespread use of the automobile began after the First World War in urban areas. Cars were relatively fast and dangerous by that stage, yet there was still no compulsory form of car insurance anywhere in the world. This meant that injured victims would seldom get any compensation in an accident and drivers often faced considerable costs for damage to their car and property.
A compulsory car insurance scheme was first introduced in the United Kingdom with the Road Traffic Act 1930. This ensured that all vehicle owners and drivers had to be insured for their liability for injury or death to third parties whilst their vehicle was being used on a public road. In 1939 Germany enacted similar Legislation Act.
In many jurisdictions it is compulsory to have vehicle insurance before using or keeping a motor vehicle on public roads. Most jurisdictions relate insurance to both the car and the driver; however the degree of each varies greatly.
Several jurisdictions have experimented with a “pay-as-you-drive” insurance plan which is paid through a gasoline tax (petrol tax). This would address issues of uninsured motorists and also charge based on the miles (kilometers) driven, which could theoretically increase the efficiency of the insurance, through streamlined collection.