Automobile insurance protects against damage to a policyholder’s car and most liabilities that could arise from operating that car. Most U.S. states allow drivers to satisfy their financial responsibility for the costs of auto accidents by obtaining insurance in three categories of liability coverage: (1) for injury to any one person, (2) for injury to two or more people, and (3) for damage to another person’s property. An increasing number of states are requiring drivers to obtain auto insurance by law.Thus it can be defined as the insurance policy done against the auto-mobile is called auto-insurance which is widely accepted by all over the world.
In other words,Automobile insurance is the most complicated kind of insurance purchased by individuals. It combines several kinds of property and liability coverage. The standard automobile policy includes collision insurance, covering property damage to a car when it is struck by another vehicle, and comprehensive insurance, covering general property damage that occurs when an automobile is damaged by something other than another vehicle. In other words, a dented fender resulting from another automobile's backing into it is insured with collision coverage, while the windshield broken by a poorly thrown baseball is covered under comprehensive insurance. Automobile insurance also includes a variety of liability coverages, including general liability—called bodily injury liability coverage—and medical payment insurance. The automobile policy, however, covers liabilities that occur when an uninsured motorist is involved in an accident with an insured driver and creates liabilities for both. Property damage liability insurance pays for damage to other people's property caused by the insured automobile. For example, damage caused by backing a car into a neighbor's garage is paid for by such a policy. Automobile insurance underwriters charge premiums based on classes of drivers and their safety records. Generally drivers who have had accidents pay more for automobile insurance than do drivers who have had none. Charging by classes of drivers may seem unfair to the individual. For example, a young driver, even with a good safety record, pays a higher premium than a comparable older driver because younger drivers as a class have poorer safety records. According to insurance records, the worst drivers—and thus the most expensive drivers to insure—are unmarried males between the ages of 15 and 25. Companies generally offer premium discounts for good students, drivers who have more than one car, and drivers who own larger, low-powered cars, which tend to incur little damage in accidents.
