What types of automobile insurance coverage are available in the US? This question is often asked and very important, seeing it is the law to have auto insurance.
The driver may be protected with different types of coverage depending on what coverage the insurer purchases. A few states in the US require that owners of vehicles carry liability insurance coverage to ensure that their drivers can cover the cost of damages to people or property in the event of an automobile accident. Some states, e.g. Wisconsin, have more flexible “proof of financial responsibility” requirements.
In the United States, liability insurance covers claims against the policy holder and generally, any other operator of the insured vehicles, provided they do not live at the same address as the policy holder, and are not specifically excluded on the policy. In the case of those living at the same address, they must specifically be covered on the policy. Thus it is essential, for example, when a family member comes of driving age they must be added to the policy. Sometimes Liability insurance does not cover the policy holder when driving other vehicles than their own.
The other party’s insurance policy will cover you when driving their vehicle. Non-owners insurance policies may be offered that would cover an insured on any car they drive. This coverage option is only available to those who are not owners of their own vehicle, and is mandatory by the government for drivers who have been found at error in an accident in the past. Non-owners insurance policies are also known as Named Operator Policies. Drivers whose drivers license have been suspended will find these policies useful.
In General, liability coverage continues when you rent a automobile. Comprehensive insurance policies (“full coverage”) usually also apply to the rental vehicle, although this should be verified beforehand. Full coverage insurance premiums are based on, among other factors, the value of the insured’s vehicle. However, this type of coverage cannot apply to rental cars because the insurance company does not want to accept the responsibility for a claim greater than the value of the insured’s vehicle.
Most rental car companies offer insurance to cover damage to the rental vehicle. These policies may be unnecessary for many customers as credit card companies, such as Visa and MasterCard, now offer alternative collision damage coverage to rental cars if the transaction is processed using one of their cards. These benefits are limited in terms of the types of vehicles covered.
