Car insurance (also known as auto insurance, car insurance, or motor
insurance) is insurance purchased for cars, trucks, and other road
vehicles. Its primary use is to provide protection against physical
damage resulting from traffic collisions and against liability that
could also arise therefrom.
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.
Several jurisdictions have experimented with a "pay-as-you-drive"
insurance plan which is paid through a gasoline tax. This would address
issues of uninsured motorists and also charge based on the miles driven,
which could theoretically increase the efficiency of the insurance
through streamlined collection.
Car insurance can cover some or all of the following items:
* The insured party (medical payments)
* The insured vehicle (physical damage)
* Third parties (car and people, property damage and bodily injury)
* Third party, fire and theft
* In some jurisdictions coverage for injuries to persons riding
in the insured vehicle is available without regard to fault in the auto
accident (No Fault Auto Insurance)
Different policies specify the circumstances under which each item is
covered. For example, a vehicle can be insured against theft, fire
damage, or accident damage independently.