This is a type of insurance mandated by state laws, but there are certain states in the United States (New Hampshire, Pennsylvania, Virginia, among others) where car insurance is not mandatory. However, car owners in these states have the option to post cash bonds. Motor Vehicle Insurance is paid on a monthly premium and insurance companies provide insurance cards which are kept inside the car at all times.
Car insurance cost is based on a variety of factors including:
- Type of vehicle
- Age and gender of the insured driver
- Insured driver’s history
- The location where the car is driven
- In other cases, credit history is taken into consideration
Motor Vehicle Insurance Types
This offers financial protection for drivers against third-party damages such as bodily injury (BI) and property damage (PD) for which the insured is deemed responsible. Liability insurance covers legal costs of damages and the cost of damages to a third party but not the cost of damages to the driver or the driver’s automobile.
An example of property damage is when a driver, considered as the first party, hits a post. Liability insurance will cover the cost of damages to the post and other costs related to the damages on the pole. Whereas, bodily injury liability insurance pertains to cost covered when an insured driver (considering the driver is responsible) causes bodily harm to another person.
PIP (Personal Injury Protection) Medical Expenses Insurance
Personal Injury Protection (PIP) is often called no-fault insurance because it covers medical expenses, damages and lost income without any regard to whose fault it is. PIP is mandatory in certain states and its coverage differs in amount and what is considered reasonable or not.
Uninsured Motorist Coverage
This is a provision of a motor vehicle insurance policy when the driver who is at fault is not covered by any insurance. This is an add-on to an existing vehicle insurance policy where the policy owner only has to add a small amount but with significant benefits.
Medical Payment coverage is an expensive but optional motor vehicle insurance but will largely benefit the policyholder. This covers medical payments of the policyholder no matter who caused the accident.
This is another motor vehicle insurance that covers payment to a damaged car that is not caused by a collision. Comprehensive insurance usually covers damages caused by fire, fallen objects or even vandalism.