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Auto Insurance comprises an
enormous portion of all the
property-liability insurance
policies written. In
the United States alone,
nearly one-half of all
(personal) property
liability policies (written)
are for auto insurance.
The insurance is designed as
a comprehensive contract in
most areas of the world and
covers liability loss due to
collision of the auto, all
other types of loss
associated with the vehicle
also known as comprehensive
loss, and medical expenses
that are incurred by the
driver and passengers as
well as other persons
involved in an accident.
The coverage typically is
applicable to anyone driving
the car of the owner and has
received (the owner’s)
permission to drive it.
This means, as long as the
vehicle is insured, drivers
may be insured whether
driving their own car, or
the car of an individual who
has granted them permission
to drive it.
For example, Jack a licensed
driver and not a member of
Jill’s household but rather
an acquaintance, asks Jill
if he may borrow her car to
go to the store. Jill,
the insured, grants Jack
permission to driver her
automobile to the store
providing him the keys.
Jack drives to the intended
location; however, collides
with another vehicle while
in the parking lot of his
destination. Even
though Jack is not the owner
of the vehicle, Jill’s
insurance should be able to
cover the costs incurred
from this accident.
Another example is when a
company insures a fleet of
cars and grants certain
employees permission to
drive the vehicles as part
of the duties outlined in
their jobs. Should any
one of these employees
become involved in an
accident while driving their
employer’s vehicle, as long
as the permission has been
granted to the employee, the
liability for the accident
is covered under the group
automobile policy of the
employer.
Auto liability insurance is
a mandate of law in many
countries. Auto owners
must carry insurance
covering specified monetary
damages.
The policy (normally) states
what happens in the event
the driver is covered by
other auto policies that may
(satisfactorily) cover a
loss. The policy also
states the liability of
individuals who have a legal
responsibility for the
driver involved in the
accident. An example
of this would be the parents
as responsible party to a
teenage dependent.
Coverage usually compensates
the insured for legal
defense costs in addition to
the liability limits of the
policy. However, many
policies will exclude
coverage when the insured
drives his/her vehicle
outside the country of which
he or she resides.
In any case, an insurance
professional or advisor will
be able to offer the best
possible recommendation to
the consumer as to the best
coverage correspondent to
the individual’s own
personal needs.
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