Insuring Your Liability

Posted by abie on 2:59 PM in
There are various coverage types available in automotive insurance, each based on how much of your liability you want insured. The difference among the coverage types is chiefly based on the kind of events the insurance policy covers, and the amount of premiums or excesses the policy holder is required to pay to the insurance company.

Liability insurance
In many jurisdictions car owners are required to carry liability insurance. This ensures that in the event of an accident, the driver can compensate for the damage to property, or liability arising out of injury to people. The "proof of financial responsibility," which is mandatory in the state of Wisconsin in the United States of America, is more flexible liability insurance.

Besides covering automobile accidents involving the vehicle of the insured, liability insurance also covers events involving a rental car. There are full coverage policies also which extend to the rental car. These are considered "comprehensive" policies. Premiums on full coverage policies are based on a number of factors, such as the value of the car insured. Since insurance companies tend not to entertain claims that exceed the value of the policy holder's car, comprehensive policies do not cover rental cars as their value may exceed that of the insured's car. Insurance for rental cars is the responsibility of the rental car companies themselves.

Nowadays, some of these policies have become unnecessary because most credit card companies these days take care of the insurance of rental cars if the car is rented using their credit card.

Third Party Liability
Automotive insurance policies also cover liabilities incurred due to human injury or damage to property of others caused in a traffic accident, provided the insured driver is held responsible. How much of the liability will be covered by the insurance depends on the type of insurance and on the jurisdiction under which the traffic accident occurred.


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