Car Insurance
BeginnerCar insurance is insurance that covers financial losses related to owning and driving a vehicle, including damage to other people and their property and, depending on the policy, damage to or theft of the insured car.
In most countries, drivers are legally required to have at least a minimum level of car insurance, covering injury to other people and damage to their property. This protects victims of accidents caused by the insured driver.
Policies usually come in levels. Third-party cover pays only for damage and injury to others. Third-party, fire and theft adds cover if the car is stolen or damaged by fire. Comprehensive cover also pays for damage to the policyholder’s own car, even if the accident was their fault.
For example, a driver with comprehensive cover who damages their car in an accident they caused could claim for repairs, paying the policy excess, while their insurer would also cover damage to the other driver’s vehicle.
Premiums depend on factors such as the driver’s age, driving record, location, the car’s value and type, annual mileage and where it is parked. Making claims can increase future premiums or reduce no-claims discounts, so drivers sometimes choose to pay for small repairs themselves. In the United States, car insurance is commonly called auto insurance.
For worked examples and full lessons, visit notesbysara.org.