What Is Motor Vehicle Insurance?
Motor vehicle insurance, also called auto insurance or car insurance, is a type of insurance that protects the owner of a vehicle against damages related to the ownership and use of the vehicle.
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Function
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Motor vehicle insurance protects a car owner against financial loss due to unpredictable events like auto accidents, fires and natural disasters. If, for example, you are involved in an auto accident, your motor vehicle insurance policy will help pay for the injury you cause to other people and damage you do to property.
Types
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There are several types of motor vehicle insurance. Liability insurance covers damages caused by accidents that are your fault such as accidentally running a red light and injuring another driver. Collision insurance covers damages caused to your vehicle while driving, such as crashing into a stationary object. Comprehensive insurance covers damages to your vehicle caused by other events that may occur while you are not driving such as fires, theft, falling trees and natural events.
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Considerations
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Motor vehicle insurance typically costs more when you drive a more expensive vehicle. Other factors that can increase the cost of insurance are previous accidents, traffic violations, and being a young driver.
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