Auto insurance, also known as car, vehicle or motor insurance is required for road vehicles in almost every jurisdiction. There is more than one purpose for this type of coverage. It provides financial protection to persons physically injured as a result of an automobile accident. Additionally, it covers physical damages that occur during an accident. It can protect against liabilities.

Insurance is mandatory in countries that have developed transportation systems. It is available virtually everywhere, though the policies offered and traffic laws will vary by region. In many jurisdictions, individuals who operate a vehicle on public roadways without adequate auto protection are vehicle dolly manufacturers committing a crime. Drivers do this can face serious consequences.

Protecting a vehicle through coverage plans is beneficial. Generally, if the insured driver or their passengers are injured during an accident, the protection provider will cover medical bills. Furthermore, if the vehicle that is insured suffers damages, the insurance will cover costs of repair. Some policies cover the passengers and property of the third party. No-fault insurance covers the medical bills of the individuals in the insured vehicle, whether the accident was proven their fault or not.

The premium charges are based upon many circumstances such as driver profile, car usage, vehicle type and coverage plan. In some jurisdictions, companies that act in accordance with government regulations or the government itself chooses premiums. Prices that are not assigned by the government are usually determined through calculations, which are based off of statistical data.

Gender can play a role in costs. Generally the rates for adults are not affected by the sex of the driver. Statistics show that men drive more frequently and are more prone to accidents than women. Young drivers are affected by these statistics. Young female drivers pay less than young male drivers. This system has brought about some controversy. Protesters believe that it arises issues relating to gender inequality. These complaints have caused officials to reconsider the rates and by December of 2012, fees for young women are set to rise to meet those of young men.

Age factors into rates as well. Teenage drivers, who do not typically have a driving record, tend to have higher premiums. In contrast, adults over the age of 25, have lower rates. Single individuals are likely to pay more than married couples. This is because married couples and older adults are assumed to be stable and financially responsible than single people or young adults. Most companies offer discount rates to teenagers and senior citizens.

Driving record is an important aspect for establishing rates. If a driver has several points on their license, they can expect raised premiums. Points are issued when individuals are caught breaking a traffic law such as speeding or running a red light. They may also be given in serious auto accidents. Certain vehicles need higher premiums because they are costly to repair and may promote risky driving. Luxury and high-performance automobiles often have the highest rates.

Auto insurance companies may reward drivers who maintain a clean driving record. Rewards usually consist of discounts. Also, individuals with good credit scores are usually given lower premiums because credit score is an indicator of financial responsibility and stability.