Vehicle insurance is widely referred to in the USA and other countries as Auto Insurance. This type of insurance is 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.
Auto insurance can cover some or all of the following items:
- The insured party
- The insured vehicle
- Third parties
Different auto 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.
Many US states have minimum car insurance requirements, but the minimum amount of required insurance may not cover all of your costs. If you cause an accident that results in a lawsuit and your insurance limits don’t cover all of the damages, your assets could be pursued.
Each state in the USA requires auto insurance companies to file how they calculate customer rates, and insurers cannot deviate from these filed rates. Each state also has regulators who review that information and the rates companies charge.