Definition of Motor Vehicle Insurance
State laws require all owners and drivers of vehicles to purchase motor vehicle insurance. The insurance purchaser contracts with a company that sells him a policy, and, according to Entrepreneur.com, "one party agrees to pay for another party's financial loss resulting from a specified event (for example, a collision, theft or storm damage)."
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Cost
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The insured person pays premiums to the insurance company. Motor vehicle insurance costs vary widely among the states, and some companies' premiums tend to be more expensive than others. The extent of coverage also affects the price. Many companies provide discounts for certain criteria, such as safe driving records.
Significance
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If an accident occurs, having adequate insurance protects not only the insured person and his passengers but also people in the other cars involved.
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Providers
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Drivers can purchase motor vehicle insurance from any of numerous companies. Many people shop around to find the best combination of price and company reputation, in terms of service and reliability.
Types
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Numerous types of policies are available. Drivers can purchase minimal and less expensive coverage, for example, if they have older vehicles. Coverage may include vehicle damage and medical expenses resulting from accidents.
Extra Features
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Some insurance policies offer roadside assistance coverage, which provides benefits such as towing of malfunctioning vehicles. Some policies cover vehicle rental to aid the policyholder in getting a rental car when his vehicle is being repaired.
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References
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