What Is The Purpose Of Car Insurance

If a policyholder is sued for damages that exceed the liability limits of car insurance homeowners insurance or other.

What is the purpose of car insurance. Car insurance is for your financial protection. To provide you protection against financial liability in case your car is damaged or stolen secondly when accidents happen there is more than one party involved in it so if you destroy other persons property even public property injure someo. Car insurance covers you against a wide range of potential losses. Understanding what car insurance is for and why it s important to have will alleviate some of your concerns.

Understanding auto insurance the basics auto insurance is a contract between you and the insurance company that protects you against financial loss in the event of an accident or theft. Listing a driver as excluded is usually much cheaper than adding them as a covered driver. Gap insurance and leasing. In the case of a lease even though you aren t buying the car outright you are responsible for the cost of the car if it is stolen or totaled because lease payments tend to be significantly lower than purchase payments the difference between what you have paid and the value of the car can be a substantial amount of money.

However the type of coverage you choose to insure yourself with will determine the level of coverage that you receive and therefore the amount of financial risk that you are exposed to on the road. Learn how car insurance works and what types of coverage are available. The purpose of short term car insurance is to cover you when you are driving a vehicle that you don t own for a short period of time. However having an excluded driver listed on your car insurance policy could cost more than not listing the driver on your policy at all.

Umbrella insurance is often referred to as excess liability insurance. 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 or bodily injury resulting from traffic collisions and against liability that could also arise from incidents in a vehicle. But believe it or not car insurance does have a purpose and is not a scam. As vehicle related expenses can be very large most countries will require you to take out car insurance by law.

Often the driver is excluded due to being a high risk driver and high risk drivers are expensive to insure.