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Motor Vehicle Insurance 101


Motor vehicle insurance is a type of insurance designed for cars, trucks, motorcycles and other types of motorized vehicles.  This type of coverage will allow policyholders to apply for claims in case of a traffic accident or mishap that causes damage to the parties involved including damage to property, life, and livelihood.

Motor vehicle insurance is mandatory in a lot of U.S. states, and non-compliance of such would entail heavy fines or even prison time.  At the least, US drivers ideally should have third party liability insurance to cover for damages incurred by third parties in traffic accidents.

Motor vehicle insurance coverage may include damage or loss to property and life incurred by policyholders and third parties.  Certain policies would insure vehicles against theft, fire, vandalism, or natural calamities like earthquakes and floods.

Premiums in this type of policy are based on several factors, including age, gender, driving history, marital status, and vehicle type.  People belonging to extreme ends of the age spectrum are assessed higher premiums.  For example, elderly people because of physical limitations that come with age are more prone to traffic accidents and for this reason, insurance companies charge them higher fees.  Young drivers who have no or few driving records also have to pay for higher premiums.

Women drivers generally enjoy better rates than men as they are perceived to be careful drivers hence have a lower risk of figuring in traffic incidents.  People who have good and extensive driving histories can benefit from lower premiums while single drivers have to pay higher policy fees.  Drivers of expensive cars like sports coupes and luxury cars have to pay more towards their premiums. The reason is that if in the event that their vehicles get damaged or totalled in a vehicular accident, insurers expect to pay more for claims.

There are various types of vehicle insurance which includes personal car insurance, student car insurance, business car insurance, and group car insurance. Personal motor vehicle insurance is designed for private individuals and guarantees them from damage and liability (for both the insured and third party) incurred in an accident. Student car insurance obviously caters to students who drive cars.  Some companies are known to offer discounts to students who get good grades in school.

Companies that use vehicles in conducting their business like pharmaceutical companies and construction firms can benefit a lot from business car insurance.

Group car insurance can be used by both for-profit and non-profit enterprises.  Group car insurance coverage is wide and expansive and premiums in general are very affordable.