Types of Auto Insurance Policies
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Auto insurance has become a pretty complex product in recent years. With new carriers entering the market and drivers' demands changing, there are a number of new
types of auto insurance policies on the market. Additionally, because of past issues relating to uninsured drivers, new systems of auto insurance have been implemented
in parts of the country that have completely changed the way car insurance works.
This section covers many common and not-so-common types of auto insurance policies, from business auto insurance and temporary coverage to gap car insurance and the
increasingly-popular "no fault" systems that are being used around the country.
Commercial Auto Insurance
If you own a business that requires use of a vehicle, you will likely have to purchase
business auto insurance for the driving you do related to your company. If you are a professional driver, like a big rig driver, you will usually have to purchase
full commercial vehicle insurance. This section discusses the different types
of auto insurance policies that are available for business use.
Gap Auto Insurance Coverage
Under the terms of a loan or lease, if your car is a total loss, there is often a difference between the amount your insurer pays in actual cash and the amount you owe
on the car. The difference is the gap amount. Gap auto insurance coverage would pay this
in the event of a total loss.
No Fault Auto Insurance
No fault car insurance is a new system of covering drivers that eliminates the need
to assess blame or "fault" on one party when an accident occurs. This type of coverage, which is now used in about a dozen states, was created to solve the problem
of uninsured drivers causing damage that they could not pay for.
Temporary and Short Term Car Insurance
In certain situations, you may require temporary auto insurance to cover a
specific driving event. An example would be purchasing coverage for driving a moving truck if your insurance did not include this coverage.
You may also have the need at some point to purchase short term auto insurance
for a longer period of time. For example, if you are traveling out of state on business for 3 months and your primary coverage does not include out-of-state driving,
you may need to purchase this type of coverage.
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