Vehicle insurance

 Vehicle insurance  is insurance purchased for cars, trucks, motorcycles, and other road vehicles. Its primary use is to provide financial protection against physical damage and/or bodily injury resulting from traffic collisions and against liability that could also arise there from. The specific terms of vehicle insurance vary with legal regulations in each region. To a lesser degree vehicle insurance may additionally offer financial protection against theft of the vehicle and possibly damage to the vehicle, sustained from things other than traffic collisions.

History

Widespread use of the automobile began after the First World War in the cities. Cars were relatively fast and dangerous by that stage, yet there was still no compulsory form of car insurance anywhere in the world. This meant that injured victims would seldom get any compensation in an accident, and drivers often faced considerable costs for damage to their car and property.

A compulsory car insurance scheme was first introduced in the United Kingdom with the Road Traffic Act 1930. This ensured that all vehicle owners and drivers had to be insured for their liability for injury or death to third parties whilst their vehicle was being used on a public road. Germany enacted similar legislation in 1939.

Public policies

In many jurisdictions it is compulsory to have vehicle insurance before using or keeping a motor vehicle on public roads. Most jurisdictions relate insurance to both the car and the driver, however the degree of each varies greatly.

Several jurisdictions have experimented with a "pay-as-you-drive" insurance plan which is paid through a gasoline tax . This would address issues of uninsured motorists and also charge based on the miles  driven, which could theoretically increase the efficiency of the insurance, through streamlined collection.

Vehicle Insurance Australia

In Australia, Compulsory Third Party Personal Injury Insurance  is a state-based scheme that covers only personal injury liability. Comprehensive and Third Party Property Insurance is sold separately to cover property damage additionally, and can include fire, theft, collision, and other property damage. Third Party Property Insurance covers damage to third-party property and vehicles, but not the insured vehicle. Third Party Property Insurance with Fire and Theft additionally covers the insured vehicle against fire and theft. Comprehensive Insurance covers damage to third-party and the insured property and vehicle.

CTP

Compulsory Third Party Personal Injury  Insurance is linked to the registration of a vehicle. It is transferred when a vehicle already registered is sold. It covers the vehicle owner and any person who drives the vehicle against claims for liability in respect of the death or injury to people caused by the fault of the owner or driver, but not for damage. It covers the cost of all reasonable medical treatment for injuries received in the accident, loss of wages, cost of care services, and in some cases compensation for pain and suffering.

In New South Wales and the Northern Territory CTP Insurance is compulsory; each vehicle must be insured when registered. A 'Greenslip,' another name by which CTP Insurance is commonly known due to the colour of the form, must be obtained through one of the five licensed insurers in New South Wales. Suncorp and Allianz both hold two licences to issue CTP Greenslips – Suncorp under the GIO and AAMI licences and Allianz under the Allianz and CIC/Allianz licences. The remaining three licences to issue CTP Greenslips are held by QBE, Zurich and Insurance Australia Limited . APIA and Shannons and InsureMyRide Insurance also supply CTP insurance licensed by GIO. In addition to the Greenslip, an additional car insurance can be purchased through insurers in Australia. This will cover claims that the standard CTP insurance cannot provide. This is known as a comprehensive car insurance.

A similar scheme applies in the Australian Capital Territory through AAMI, GIO and NRMA .

In Victoria, Third Party Personal insurance from the Transport Accident Commission is similarly included, through a levy, in the vehicle registration fee. A similar scheme exists in Tasmania through the Motor Accidents Insurance Board.

In Queensland, CTP is a mandatory part of registration for a vehicle. There is choice of insurer but price is government controlled in a tight band.

In South Australia, Third Party Personal insurance from the Motor Accident Commission is included in the licence registration fee for people over 17. A similar scheme applies in Western Australia.

Vehicle Insurance Canada

Several Canadian provinces  provide a public auto insurance system while in the rest of the country insurance is provided privately. Basic auto insurance is mandatory throughout Canada with each province's government determining which benefits are included as minimum required auto insurance coverage and which benefits are options available for those seeking additional coverage. Accident benefits coverage is mandatory everywhere except for Newfoundland and Labrador. All provinces in Canada have some form of no-fault insurance available to accident victims.

The difference from province to province is the extent to which tort or no-fault is emphasized. International drivers entering Canada are permitted to drive any vehicle their licence allows for the 3-month period for which they are allowed to use their international licence. International laws provide visitors to the country with an International Insurance Bond  until this 3-month period is over in which the international driver must provide themselves with Canadian Insurance. The IIB is reinstated every time the international driver enters the country. Damage to the driver's own vehicle is optional – one notable exception to this is in Saskatchewan, where SGI provides collision coverage  as part of its basic insurance policy. In Saskatchewan, residents have the option to have their auto insurance through a tort system but less than 0.5% of the population have taken this option.

Vehicle Insurance Germany

Since 1939, it has been compulsory to have third party personal insurance before keeping a motor vehicle in all federal states of Germany. In addition, every vehicle owner is free to take out a comprehensive insurance policy. All types of car insurances are provided by several private insurers. The amount of insurance contribution is determined by several criteria, like the region, the type of car or the personal way of driving.

The minimum coverage defined by German law for car liability insurance / third party personal insurance is: 7.5 million euro for bodily injury, 1 million euro for property damage and 50,000 euro for financial/fortune loss which is in no direct or indirect coherence with bodily injury or property damage. Insurance companies usually offer all-in/combined single limit insurances of 50 Million Euro or 100 Million Euro  for bodily injury, property damage and other financial/fortune loss .

Vehicle Insurance Hungary

Third-party vehicle insurance is mandatory for all vehicles in Hungary. No exemption is possible by money deposit. The premium covers all damage up to HUF 500M  per accident without deductible. The coverage is extended to HUF 1,250M  in case of personal injuries. Vehicle insurance policies from all EU-countries and some non-EU countries are valid in Hungary based on bilateral or multilateral agreements. Visitors with vehicle insurance not covered by such agreements are required to buy a monthly, renewable policy at the border.

Vehicle Insurance Indonesia

Third-party vehicle Insurance is a mandatory requirement in Indonesia and each individual car and motorcycle must be insured or the vehicle will not be considered legal. Therefore, a motorist cannot drive the vehicle until it is insured. Third Party vehicle insurance is included through a levy in the vehicle registration fee which is paid to government institution that known as "Samsat". Third-Party Vehicle Insurance is regulated under Act No. 34 Year 1964 Re: Road Traffic Accident Fund and merely covers Bodily injury, and managed by a SOE named PT. Jasa Raharja .

Vehicle Insurance India

Auto Insurance in India deals with the insurance covers for the loss or damage caused to the automobile or its parts due to natural and man-made calamities. It provides accident cover for individual owners of the vehicle while driving and also for passengers and third party legal liability. There are certain general insurance companies who also offer online insurance service for the vehicle.

Auto Insurance in India is a compulsory requirement for all new vehicles used whether for commercial or personal use. The insurance companies have tie-ups with leading automobile manufacturers. They offer their customers instant auto quotes. Auto premium is determined by a number of factors and the amount of premium increases with the rise in the price of the vehicle. The claims of the Auto Insurance in India can be accidental, theft claims or third party claims. Certain documents are required for claiming Auto Insurance in India, like duly signed claim form, RC copy of the vehicle, Driving license copy, FIR copy, Original estimate and policy copy.

There are different types of Auto Insurance in India :

Private Car Insurance – In the Auto Insurance in India, Private Car Insurance is the fastest growing sector as it is compulsory for all the new cars. The amount of premium depends on the make and value of the car, state where the car is registered and the year of manufacture.

Two Wheeler Insurance – The Two Wheeler Insurance under the Auto Insurance in India covers accidental insurance for the drivers of the vehicle. The amount of premium depends on the current showroom price multiplied by the depreciation rate fixed by the Tariff Advisory Committee at the time of the beginning of policy period.

Commercial Vehicle Insurance – Commercial Vehicle Insurance under the Auto Insurance in India provides cover for all the vehicles which are not used for personal purposes, like the Trucks and HMVs. The amount of premium depends on the showroom price of the vehicle at the commencement of the insurance period, make of the vehicle and the place of registration of the vehicle.

The auto insurance generally includes:

• Loss or damage by accident, fire, lightning, self ignition, external explosion, burglary, housebreaking or theft, malicious act.
• Liability for third party injury/death, third party property and liability to paid driver
• On payment of appropriate additional premium, loss/damage to electrical/electronic accessories
• The auto insurance does not include:
• Consequential loss, depreciation, mechanical and electrical breakdown, failure or breakage
• When vehicle is used outside the geographical area
• War or nuclear perils and drunken driving.

Vehicle Insurance Ireland

The Road Traffic Act, 1933 requires all drivers of mechanically propelled vehicles in public places to have at least third-party insurance, or to have obtained exemption – generally by depositing a  sum of money with the High Court as a guarantee against claims. In 1933 this figure was set at £15,000. The Road Traffic Act, 1961  repealed the 1933 act but replaced these sections with functionally identical sections.

From 1968, those making deposits require the consent of the Minister for Transport to do so, with the sum specified by the Minister.

Those not exempted from obtaining insurance must obtain a certificate of insurance from their insurance provider, and display a portion of this  on their vehicles windscreen . The certificate in full must be presented to a police station within ten days if requested by an officer. Proof of having insurance or an exemption must also be provided to pay for the motor tax.

Those injured or suffering property damage/loss due to uninsured drivers can claim against the Motor Insurance Bureau of Ireland's uninsured drivers fund, as can those injured  from hit and run offences.

Vehicle Insurance Italy

The law 990/1969 requires that each motor vehicle or trailer standing or moving in a public road to have a third party insurance . Historically, a part of the certificate of insurance must be displayed on the windscreen of the vehicle. This latter disposition was revoked in 2015, when a national database of insured vehicles was built by the Insurance Company Association  and the National Trasportation Authority  to verify  if a vehicle is insured. There is no exemption policy to this law disposition.

Police forces have the power to seize vehicles that do not have the necessary insurance in place, until the owner of the vehicle pays the fine and sign a new insurance policy. Driving without the necessary insurance for that vehicle is an offence that will be prosecuted by the police and will receive penalty ranging from 841 to 3,287 euro. Same provision is applied when the vehicle is standing on public road.

The minimal insurance policies covers only third parties . Also the third parties, fire and theft are common insurance policies, while the all inclusive policies  which include also damages of the vehicle causing the accident or the injuries. It is also common to include a renounce clause of the insurance company to compensate the damages against the insured person in some cases .

The victims of accident caused by non-insured vehicles could be compensated by the Road's Victim Warranty Fund, which is covered by a fixed amount  of each RCA insurance premium.

Vehicle Insurance New Zealand

Within New Zealand, the Accident Compensation Corporation  provides nationwide no-fault personal injury insurance. Injuries involving motor vehicles operating on public roads are covered by the Motor Vehicle Account, for which premiums are collected through levies on petrol and through vehicle licensing fees.

Vehicle Insurance Norway

In Norway, the vehicle owner must provide the minimum of liability insurance for his vehicle – of any kind. Otherwise, the vehicle is illegal to use. If a person drives a vehicle belonging to someone else, and has an accident, the insurance will cover for damage done. Note that the policy carrier can choose to limit the coverage to only apply for family members or person over a certain age.

Vehicle Insurance Romania

Romanian law mandates Răspundere Auto Civilă, a motor-vehicle liability insurance for all vehicle owners to cover damages to third parties.

Vehicle Insurance Russian Federation  

Motor-vehicle insurance is mandatory for all owners according to Russian legislation.

Vehicle Insurance South Africa

South Africa allocates a percentage of the money from gasoline into the Road Accident Fund, which goes towards compensating third parties in accidents.

Vehicle Insurance United Arab Emirates

When buying car insurance in the United Arab Emirates, traffic department require a 13-month insurance certificate each time you register or renew a vehicle registration.

Vehicle Insurance United Kingdom

In 1930, the UK government introduced a law that required every person who used a vehicle on the road to have at least third-party personal injury insurance. Today, this UK law is defined by the Road Traffic Act 1988,  which was last modified in 1991. The Act requires that motorists either be insured, or have made a specified deposit  and keeps the sum deposited with the Accountant General of the Supreme Court, against liability for injuries to others  and for damage to other persons' property, resulting from use of a vehicle on a public road or in other public places.

It is an offence to use a motor vehicle, or allow others to use it without insurance that satisfies the requirements of the Act. This requirement applies while any part of a vehicle  is on the public highway. No such legislation applies on private land. However, private land to which the public have a reasonable right of access  is considered to be included within the requirements of the Act.

Police have the power to seize vehicles that do not appear to have necessary insurance in place. A driver caught driving without insurance for the vehicle he/she is in charge of for the purposes of driving, is liable to be prosecuted by the police and, upon conviction, will receive either a fixed penalty or magistrate's courts penalty.

The registration number of the vehicle shown on the insurance policy, along with other relevant information including the effective dates of cover are transmitted electronically to the UK's Motor Insurance Database  which exists to help reduce incidents of uninsured driving in the territory. The Police are able to spot-check vehicles that pass within range of automated number plate recognition  cameras, that can search the MID instantly. It should be noted, however, that proof of insurance lies entirely with the issue of a Certificate of Motor Insurance, or cover note, by an Authorised Insurer which, to be valid, must have been previously 'delivered' to the insured person in accordance with the Act, and be printed in black ink on white paper.

The insurance certificate or cover note issued by the insurance company constitutes the only legal evidence that the policy to which the certificate relates satisfies the requirements of the relevant law applicable in Great Britain, Northern Ireland, the Isle of Man, the Island of Guernsey, the Island of Jersey and the Island of Alderney. The Act states that an authorised person, such as a police officer, may require a driver to produce an insurance certificate for inspection. If the driver cannot show the document immediately on request, and evidence of insurance cannot be found by other means such as the MID, then the Police are empowered to seize the vehicle instantly.

The immediate impounding of an apparently uninsured vehicle replaces the former method of dealing with insurance spot-checks where drivers were issued with an HORT/1 . This 'ticket' was an order requiring that within seven days, from midnight of the date of issue, the driver concerned was to take a valid insurance certificate  to a police station of the driver's choice. Failure to produce an insurance certificate was, and still is, an offence. The HORT/1 was commonly known – even by the issuing authorities when dealing with the public – as a "Producer". As these are seldom issued now and the MID relied upon to indicate the presence of insurance or not, it is incumbent upon the insurance industry to accurately and swiftly update the MID with current policy details and insurers that fail to do so can be penalised by their regulating body.

Vehicles kept in the UK must now be continuously insured. This requirement arose following a change in the law in June 2011 when a regulation known as Continuous Insurance Enforcement  came into force. The effect of this was that in the UK a vehicle must have a valid insurance policy in force whether or not it is kept on public roads and whether or not it is driven.

Insurer, and Vehicle Excise Duty  / licence data, are shared by the relevant authorities including the Police and this forms an integral part of the mechanism of CIE. All UK registered vehicles, including those that are exempt from VED  are subject to the VED taxation application process. Part of this is a check on the vehicle's insurance. A physical receipt for the payment of VED was issued by way of a paper disc which, prior to 1 October 2014, meant that all motorists in the UK were required to prominently display the tax disc on their vehicle when it was kept or driven on public roads. This helped to ensure that most people had adequate insurance on their vehicles because insurance cover was required to purchase a disc, although the insurance must merely have been valid at the time of purchase and not necessarily for the life of the tax disc.

To address the problems that arise where a vehicle's insurance was subsequently cancelled but the tax disc remained in force and displayed on the vehicle and the vehicle then used without insurance, the CIE regulations are now able to be applied as the Driver & Vehicle Licence Authority  and the MID databases are shared in real-time meaning that a taxed but uninsured vehicle is easily detectable by both authorities and Traffic Police. Post 1 October 2014 it is no longer a requirement to display a vehicle excise licence  on a vehicle. This has come about because the whole VED process can now be administered electronically and alongside the MID, doing away with the expense, to the UK Government, of issuing paper discs.

If a vehicle is to be "laid up" for whatever reason, a Statutory Off Road Notification  must be submitted to the DVLA to declare that the vehicle is off the public roads and will not return to them unless SORN is cancelled by the vehicle's owner. Once a vehicle has been declared 'SORN' then the legal requirement to insure it ceases, although many vehicle owners may desire to maintain cover for loss of or damage to the vehicle while it is off the road. A vehicle that is then to be put back on the road must be subject to a new application for VED and be insured.

Part of the VED application requires an electronic check of the MID, in this way the lawful presence of a vehicle on the road for both VED and insurance purposes is reinforced. It follows that the only circumstances in which a vehicle can have no insurance is if it has a valid SORN; was exempted from SORN ; is recorded as 'stolen and not recovered' by the Police; is between registered keepers; or is scrapped.