Insurable Interest on an Auto Policy
When you purchase an automobile insurance policy, you are required to have an insurable interest in the vehicle at the time you purchase the insurance. Also, if there are any damages to the vehicle or you become liable for any damages that your vehicle causes to another automobile, you must have an insurable interest in your car at the time of collision or accident.
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Auto Policy
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An automobile insurance policy is designed to provide coverage for your automobile, including liability and collision coverage. In general, your auto insurance may cover the cash value of damaged property that is included in the policy. Also, if your policy contains personal injury protection, the policy covers medical expenses from injuries resulting from an accident. Your liability coverage can provide coverage up to a certain amount if you are at fault in an accident. With regards to personal property, a basic automobile insurance policy may cover equipment that is permanently installed in the automobile. However, any personal items that are included in the policy are stipulated in the coverage terms.
Legal Claim
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You must be legally able to submit a claim to the insurance company for any damages caused to your vehicle or any damages for which you become legally liable. In other words, you must have the legal right to enforce an insurance claim. The extent of your insurance coverage is stated in your policy. It includes any limitations and exclusions to your coverage.
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Financial Interest
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A person with an insurable interest derives either a financial advantage from the continued maintenance of the vehicle or suffers a loss if the vehicle is damaged. Therefore, if your vehicle is damaged in an accident, your insurable interest is the loss that you suffered as a result of the accident. Also, your insurable interest is the advantage that you receive when your policy covers any repairs to your vehicle resulting from damage.
Property Ownership
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You must have an ownership interest in the vehicle that you are insuring to be able to have an insurable interest. For instance, you have an ownership interest in the vehicle if you acquired the vehicle under a lease or purchase contract. Also, you have an insurable interest in a rented vehicle if you acquired auto insurance for the rented automobile. An automobile insurance company will only issue an insurance policy to someone with an ownership interest in the car.
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References
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