Vehicle Insurance

Vehicle Insurance

Why It’s Important

Most states require you to have some form of vehicle insurance. To get the best value, you need to know the choices in coverage and the costs of insurance.

Financial Responsibility Law

A financial responsibility law says you must pay for any damage or injury you cause in an accident either with insurance, with savings, or by selling property

Compulsory Insurance Law

A compulsory insurance law legally requires drivers to have a minimum amount of car insurance. If you can’t show proof of insurance, you can have your license or registration taken away from you.

Types of Vehicle Insurance

Insurance is paid protection against losses due to injury or property damage.

To get insurance, you have to purchase a contract called a policy from an insurance company.

Types of Vehicle Insurance

The company that issues the policy is called the insurer. The buyer of the policy is called the policyholder.

Types of Vehicle Insurance

Liability insurance protects you from claims of bodily injury or property damage to others in case you’re held responsible for an accident.

Bodily Injury Liability

Bodily injury liability insurance covers injuries to someone else that you are held responsible for.

Property Damage Liability

Property damage liability insurance covers damage to another person’s vehicle or other property that you are held responsible for.

It also covers damage to property, such as telephone poles or street signs.

Collision Insurance

Collision insurance covers damages to your own vehicle when you are held responsible.

Comprehensive Coverage

Comprehensive insurance covers damage to a your vehicle caused by things other than a car accident.  Comprehensive insurance covers losses from falling objects, theft, flood damage, vandalism, and other causes.


The maximum amount covered is based on the actual cash value of your vehicle, which is the value of the car when it’s new minus depreciation.

Depreciation is the decline in value of a vehicle because of use.

Comprehensive Coverage

Like collision coverage, comprehensive coverage will not cover more than the actual cash value of your car.

Medical Payments Coverage

Medical payments coverage is also called personal injury protection.

It covers injuries to you and anyone else in your car when you are held responsible.

Uninsured Motorist Protection

Uninsured motorist coverage protects you from people who can’t pay insurance claims.

The Costs of Insurance

The costs of insurance are directly affected by the amount of money insurers pay each year in insurance claims.

The Costs of Insurance

A claim is a request for payment from an insurer for any damages covered by a policy.

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