Auto Insurance In USA - The Basics

General vehicle insurance refers to insurance policies purchased for cars, bikes, trucks or other vehicles. It provides protection against damages or loss to the vehicle or injuries or death caused to drivers, passengers or related third parties due to accidents in which the insured vehicle was involved. Auto insurance, motor insurance or car insurance is part of the general vehicle insurance. The requirements of auto insurance vary from one jurisdiction to other. Numerous providers offer auto insurance ranging from national and international banks and insurance companies to state based insurance providers. The cost of a vehicle insurance policy would differ from state to state depending on the type of vehicle insured and the nature of coverage included in the policy.

In United States, different states have different laws regarding vehicle insurance. For example while New Jersey and California requires the driver to carry 3rd party liability insurance at all points of time, New Hampshire does not have any such requirements. In some states like North Carolina, new drivers need to have insurance before they can be issued driving licenses. Again in other states, drivers are allowed to drive without any insurance but they have to deposit a certain amount of money with the state transport department which will pay for 3rd party liability. In general, most states require a 3rd party liability insurance coverage. You can find out the details of the basic minimum requirement in the state of your residence from your local DMV office or the official website of Department of Transport. It is recommended that you carry your vehicle insurance with you at all points of time especially when you are diving long distances or out of state.

Most auto insurance policies offer basic coverage at two levels. First is the coverage of 3rd party liability which protects a third party against any injuries or death due to an accident in which the driver of the insured vehicle is held responsible. The 3rd party liability also includes coverage against loss or damage to the property of 3rd party due to accident in which the insured vehicle is involved. The second level of coverage protects the drivers and passengers of the insured vehicle and pays of medical costs or life insurance in case they are injured in an accident involving the insured vehicle. This also includes physical damages to the vehicle due to an accident. Apart from this basic coverage, you can purchase excess coverage on your auto insurance policy which protects your car against loss of vehicle due to fire, theft, or intentional vandalism.

Auto insurance is probably one of the most popularly purchased types of insurance policies in USA and around the world. It is a very competitive market and there are numerous insurance providers offering attractively packaged vehicle insurance policies. It is recommended that you purchase your auto insurance policy after some research of the products available in the market. Emphasis should be paid not only to the cost of the insurance policy but also the after sales service offered by the insurance company. An effective auto insurance policy goes a long way to guarantee your peace of mind that you and your much beloved car is adequately protected.