Insurance is a term used in law and economics for a sort of compensation that one party provides to the other in case of a possible risk or uncertain loss, in the form of payment. There are many types of insurances like home insurance, health insurance, property insurance and life insurance. The one which is of particular importance nowadays is car insurance, since the number of vehicles on the road has considerably increased in the past few decades.
Car insurance, sometimes also known as vehicle insurance, is basically an insurance purchased for road vehicles like cars and trucks. The main idea is behind it is the protection against physical damage to the vehicle and against physical injuries sustained as a result of traffic collisions. It also provides protection against the legal liabilities resulting from these accidents. To put in layman’s terms, it means that life actually has a price.
Many jurisdictions make it compulsory for a person to have car insurance before using or owning a road vehicle. In most jurisdictions, insurance is related to the car and driver, both; even though the nature of each varies greatly.
Car insurance usually covers a range of things which can vary. It usually includes some or all of the following:
- Medical payments for the insured party
- Physical damage payments for the insured vehicle
- Damage to third parties like car and people, other property damage and physical injuries.
- Some jurisdictions offer insurances which provide coverage for other people riding in the insured vehicle.
With the increase in the number of vehicles on the road lately, the accidents have increased exponentially, which results in heavy monetary loss and life casualties. Sure, money cannot bring people back from the dead or serve as an alternative for good health, but it does provide a degree of consolation, no matter how small. And not every accident results in fatalities. So it is always wise to get car insurance before owning a vehicle.