Vehicle insurance (also known as auto insurance, car insurance, or motor insurance) is insurance purchased for cars, trucks, and other vehicles. Its primary use is to provide protection against losses incurred as a result of traffic accidents and against liability that could be incurred in an accident.
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.In 1930, the UK government introduced a law that required every person who used a vehicle on the road to have at least third party personal injury insurance.
Today UK law is defined by The Road Traffic Act 1988, which was last modified in 1991. The act requires that motorists either be insured, have a security, or have made a specified deposit (500,000 as of 1991) with the Accountant General of the Supreme Court, against their liability for injuries to others (including passengers) and for damage to other person property resulting from use of a vehicle on a public road or in other public places
A 1994 study by Jeremy Jackson and Roger Blackman showed, consistent with the risk homeostasis theory, that increased accident costs caused large and significant reductions in accident frequencies. In South Australia, Third Party Personal insurance from the State Government Insurance Corporation (SGIC) is included in the licence registration fee for people over 16.
A similar scheme applies in Western Australia, In Victoria, Third Party Personal insurance from the Transport Accident Commission is similarly included, through a levy, in the vehicle registration fee. In New South Wales, Compulsory Third Party Insurance (commonly known as CTP Insurance) is a mandatory requirement and each individual car must be insured or the vehicle will not be considered legal.
Therefore, a motorist cannot drive the vehicle until it is insured. A Green Slip, another name CTP Insurance is commonly known by due to the colour of the pages the form is printed on, must be obtained through one of the seven main insurers in New South Wales.
Owners of sports cars, muscle cars, some sport utility vehicles, and motorcycles would have higher insurance premiums as opposed to compact cars or luxury cars. However, in the case of motorcycles, the chance of causing extensive damage to other vehicles is relatively low (as opposed to damage to oneself) and thus liability insurance premiums are often lower.
Cents Per Mile Now(1986) advocates classified odometer-mile rates. After the company’s risk factors have been applied and the customer has accepted the per-mile rate offered, customers buy prepaid miles of insurance protection as needed, like buying gallons of gasoline.
Insurance automatically ends when the odometer limit (recorded on the car insurance ID card) is reached unless more miles are bought. Customers keep track of miles on their own odometer to know when to buy more.
The consumer may be protected with different coverage types depending on what coverage the insured purchases. Some states require that motorists carry liability insurance coverage in order to ensure that its drivers can cover the cost of damages to people or property in the event of an automobile accident. Some states, such as Wisconsin, have more flexible proof of financial responsibility requirements.