Auto insurance (also known as car insurance, auto insurance or automobile insurance) is insurance purchased for cars, trucks and other vehicles. Its primary use is to provide protection against losses suffered as a result of traffic accidents and the liability that could be caused by an accident.
Depending on the jurisdiction, the insurance premium may be mandated by the government or determined by the insurance company under a framework of regulations established by the government. Often, the insurer will have more freedom to price physical damage coverages than mandatory liability coverages.
When the premium is not mandated by the government, it is generally the results of an actuary’s calculations based on statistical data. The premium may vary depending on many factors that are believed to have an impact on the expected costs of future demand. These factors may include the characteristics of the car, the coverage of the selected one (deductible, limit, covered claims), the driver’s profile (age, sex, driving history) and the use of the car.
