Vehicle design and maintenance

Main article: Automobile safety


A 2005 Chevrolet Malibu involved in a rollover crash
Research has shown that, across all collision types, it is less likely that seat belts were worn in collisions involving death or serious injury, rather than light injury; wearing a seat belt reduces the risk of death by about 45 percent.[38] Seat belt use is controversial, with notable critics such as Professor John Adams suggesting that their use may lead to a net increase in road casualties due to a phenomenon known as risk compensation.[39] However, actual observation of driver behaviors before and after seat belt laws does not support the risk compensation hypothesis. Several important driving behaviors were observed on the road before and after the belt use law was enforced in Newfoundland, and in Nova Scotia during the same period without a law. Belt use increased from 16 percent to 77 percent in Newfoundland and remained virtually unchanged in Nova Scotia. Four driver behaviors (speed, stopping at intersections when the control light was amber, turning left in front of oncoming traffic, and gaps in following distance) were measured at various sites before and after the law. Changes in these behaviors in Newfoundland were similar to those in Nova Scotia, except that drivers in Newfoundland drove slower on expressways after the law, contrary to the risk compensation theory.[40]


A well-designed and well-maintained vehicle, with good brakes, tires and well-adjusted suspension will be more controllable in an emergency and thus be better equipped to avoid collisions. Some mandatory vehicle inspection schemes include tests for some aspects of roadworthiness, such as the UK's MOT test or German TÜV conformance inspection.

The design of vehicles has also evolved to improve protection after collision, both for vehicle occupants and for those outside of the vehicle. Much of this work was led by automotive industry competition and technological innovation, leading to measures such as Saab's safety cage and reinforced roof pillars of 1946, Ford´s 1956 Lifeguard safety package, and Saab and Volvo's introduction of standard fit seatbelts in 1959. Other initiatives were accelerated as a reaction to consumer pressure, after publications such as Ralph Nader's 1965 book Unsafe at Any Speed accused motor manufacturers of indifference towards safety.

In the early 1970s British Leyland started an intensive programme of vehicle safety research, producing a number of prototype experimental safety vehicles demonstrating various innovations for occupant and pedestrian protection such as air bags, anti-lock brakes, impact-absorbing side-panels, front and rear head restraints, run-flat tires, smooth and deformable front-ends, impact-absorbing bumpers, and retractable headlamps.[41] Design has also been influenced by government legislation, such as the Euro NCAP impact test.

Common features designed to improve safety include thicker pillars, safety glass, interiors with no sharp edges, stronger bodies, other active or passive safety features, and smooth exteriors to reduce the consequences of an impact with pedestrians.

The UK Department for Transport publish road casualty statistics for each type of collision and vehicle through its Road Casualties Great Britain report.[42] These statistics show a ten to one ratio of in-vehicle fatalities between types of car. In most cars, occupants have a 2–8% chance of death in a two-car collision.

Center of gravity

An Opel Vectra involved in a rollover crash
Some crash types tend to have more serious consequences. Rollovers have become more common in recent years, perhaps due to increased popularity of taller SUVs, people carriers, and minivans, which have a higher center of gravity than standard passenger cars. Rollovers can be fatal, especially if the occupants are ejected because they were not wearing seat belts (83% of ejections during rollovers were fatal when the driver did not wear a seat belt, compared to 25% when they did).[38] After a new design of Mercedes Benz notoriously failed a 'moose test' (sudden swerving to avoid an obstacle), some manufacturers enhanced suspension using stability control linked to an anti-lock braking system to reduce the likelihood of rollover. After retrofitting these systems to its models in 1999–2000, Mercedes saw its models involved in fewer crashes.[43]

Now, about 40% of new US vehicles, mainly the SUVs, vans and pickup trucks that are more susceptible to rollover, are being produced with a lower center of gravity and enhanced suspension with stability control linked to its anti-lock braking system to reduce the risk of rollover and meet US federal requirements that mandate anti-rollover technology by September 2011.[44]


Motorcyclists have little protection other than their clothing and helmets. This difference is reflected in the casualty statistics, where they are more than twice as likely to suffer severely after a collision. In 2005 there were 198,735 road crashes with 271,017 reported casualties on roads in Great Britain. This included 3,201 deaths (1.1%) and 28,954 serious injuries (10.7%) overall. Of these casualties 178,302 (66%) were car users and 24,824 (9%) were motorcyclists, of whom 569 were killed (2.3%) and 5,939 seriously injured (24%)

Road design

Main articles: Highway engineering and Road safety

A 1985 US study showed that about 34% of serious crashes had contributing factors related to the roadway or its environment. Most of these crashes also involved a human factor.[12] The road or environmental factor was either noted as making a significant contribution to the circumstances of the crash, or did not allow room to recover. In these circumstances it is frequently the driver who is blamed rather than the road; those reporting the accident have a tendency to overlook the human factors involved, such as the subtleties of design and maintenance that a driver could fail to observe or adequately compensate for.[36]
A potential long fall stopped by an early guardrail
 ca. 1920. Guardrails, median barriers,
or other physical objects can help reduce
 the consequences of an accident or minimize damage.

Research has shown that careful design and maintenance, with well-designed intersections, road surfaces, visibility and traffic control devices, can result in significant improvements in accident rates.

Individual roads also have widely differing performance in the event of an impact. In Europe there are now EuroRAP tests that indicate how "self-explaining" and forgiving a particular road and its roadside would be in the event of a major incident.

In the UK, research has shown that investment in a safe road infrastructure program could yield a ⅓ reduction in road deaths, saving as much as £6 billion per year.[37] A consortium of 13 major road safety stakeholders have formed the Campaign for Safe Road Design, which is calling on the UK Government to make safe road design a national transport priority.

Motor vehicle speed

The U.S. Department of Transportation's Federal Highway Administration review research on traffic speed in 1998.[26] The summary says:

  • The evidence shows the risk of having a crash is increased both for vehicles traveling slower than the average speed, and for those traveling above the average speed.
  • The risk of being injured increases exponentially with speeds much faster than the median speed.
  • The severity/lethality of a crash depends on the vehicle speed change at impact.
  • There is limited evidence suggesting lower speed limits result in lower speeds on a system-wide basis.
  • Most crashes related to speed involve speed too fast for the conditions.
  • More research is needed to determine the effectiveness of traffic calming.

The Road and Traffic Authority (RTA) of the Australian state of New South Wales (NSW) asserts speeding (traveling too fast for the prevailing conditions or above the posted speed limit[27]) is a factor in about 40 percent of road deaths.[28] The RTA also say speeding increases the risk of a crash and its severity.[28] On another web page, the RTA qualify their claims by referring to one specific piece of research from 1997, and write "research has shown that the risk of a crash causing death or injury increases rapidly, even with small increases above an appropriately set speed limit."[29]

The contributory factor report in the official British road casualty statistics show for 2006, that "exceeding speed limit" was a contributory factor in 5% of all casualty crashes (14% of all fatal crashes), and "traveling too fast for conditions" was a contributory factor in 11% of all casualty crashes (18% of all fatal crashes).

Driver impairment
Driver impairment describes factors that prevent the driver from driving at their normal level of skill. Common impairments include:

Main article: Driving under the influence
According to the Government of Canada, coroner reports from 2008 suggested almost 40% of fatally injured drivers consumed some quantity of alcohol before the collision
Relative risk of an accident based on
 blood alcohol levels[

Physical impairment
Poor eyesight and/or physical impairment, with many jurisdictions setting simple sight tests and/or requiring appropriate vehicle modifications before being allowed to drive;

Insurance statistics demonstrate a notably higher incidence of accidents and fatalities among drivers aged in their teens or early twenties, with insurance rates reflecting this data. These drivers have the highest incidence of both accidents and fatalities among all driver age groups, a fact that was observed well before the advent of mobile phones.

Females in this age group exhibit somewhat lower accident and fatality rates than males but still register well above the median for drivers of all ages. Also within this group, the highest accident incidence rate occurs within the first year of licensed driving. For this reason many US states have enacted a zero-tolerance policy wherein receiving a moving violation within the first six months to one year of obtaining a license results in automatic license suspension. No US state allows fourteen year-olds to obtain drivers’ licenses any longer.

Old age
Old age, with some jurisdictions requiring driver retesting for reaction speed and eyesight after a certain age.

Sleep deprivation

Drug use
Including some prescription drugs, over the counter drugs (notably antihistamines, opioids and muscarinic antagonists), and illegal drugs.

Research suggests that the driver's attention is affected by distracting sounds such as conversations and operating a mobile phone while driving. Many jurisdictions now restrict or outlaw the use of some types of phone within the car. Recent research conducted by British scientists suggests that music can also have an effect; classical music is considered to be calming, yet too much could relax the driver to a condition of distraction. On the other hand, hard rock may encourage the driver to step on the acceleration pedal, thus creating a potentially dangerous situation on the road.[33]

Combinations of factors
Several conditions can combine to create a much worse situation, for example:

  • Combining low doses of alcohol and cannabis has a more severe effect on driving performance than either cannabis or alcohol in isolation,[34] or
  • Taking recommended doses of several drugs together, which individually do not cause impairment, may combine to bring on drowsiness or other impairment. This could be more pronounced in an elderly person whose renal function is less efficient than a younger person's.[35]

Thus there are situations when a person may be impaired, but still legally allowed to drive, and becomes a potential hazard to themselves and other road users. Pedestrians or cyclists are affected in the same way and can similarly jeopardize themselves or others when on the road.

Human factors

Human factors in vehicle collisions include all factors related to drivers and other road users that may contribute to a collision. Examples include driver behavior, visual and auditory acuity, decision-making ability, and reaction speed.
Man with visible facial scars resulting
 from a car accident

A 1985 report based on British and American crash data found driver error, intoxication and other human factors contribute wholly or partly to about 93% of crashes.[12]

Drivers distracted by mobile devices had nearly four times greater risk of crashing their cars than those who were not. Dialing a phone is the most dangerous distraction, increasing a drivers’ chance of crashing by 12 times, followed by reading or writing, which increased the risk by 10 times.[14]

An RAC survey of British drivers found that most thought they were better than average drivers; a contradictory result showing overconfidence in their abilities. Nearly all drivers who had been in a crash did not believe themselves to be at fault.[15] One survey of drivers reported that they thought the key elements of good driving were:[16]

  • controlling a car including a good awareness of the car's size and capabilities
  • reading and reacting to road conditions, weather, road signs and the environment
  • alertness, reading and anticipating the behavior of other drivers.

Although proficiency in these skills is taught and tested as part of the driving exam, a 'good' driver can still be at a high risk of crashing because:

...the feeling of being confident in more and more challenging situations is experienced as evidence of driving ability, and that 'proven' ability reinforces the feelings of confidence. Confidence feeds itself and grows unchecked until something happens – a near-miss or an accident.[16]

An AXA survey concluded Irish drivers are very safety-conscious relative to other European drivers. However, this does not translate to significantly lower crash rates in Ireland.[17]

Accompanying changes to road designs have been wide-scale adoptions of rules of the road alongside law enforcement policies that included drink-driving laws, setting of speed limits, and speed enforcement systems such as speed cameras. Some countries' driving tests have been expanded to test a new driver's behavior during emergencies, and their hazard perception.

There are demographic differences in crash rates. For example, although young people tend to have good reaction times, disproportionately more young male drivers feature in accidents,[18] with researchers observing that many exhibit behaviors and attitudes to risk that can place them in more hazardous situations than other road users.[16] This is reflected by actuaries when they set insurance rates for different age groups, partly based on their age, sex, and choice of vehicle. Older drivers with slower reactions might be expected to be involved in more accidents, but this has not been the case as they tend to drive less and, apparently, more cautiously.[19] Attempts to impose traffic policies can be complicated by local circumstances and driver behavior. In 1969 Leeming warned that there is a balance to be struck when "improving" the safety of a road:[20]

Conversely, a location that does not look dangerous may have a high crash frequency. This is, in part, because if drivers perceive a location as hazardous, they take more care. Accidents may be more likely to happen when hazardous road or traffic conditions are not obvious at a glance, or where the conditions are too complicated for the limited human machine to perceive and react in the time and distance available. High incidence of crashes is not indicative of high injury risk. Crashes are common in areas of high vehicle congestion but fatal crashes occur disproportionately on rural roads at night when traffic is relatively light.

This phenomenon has been observed in risk compensation research, where the predicted reductions in accident rates have not occurred after legislative or technical changes. One study observed that the introduction of improved brakes resulted in more aggressive driving,[21] and another argued that compulsory seat belt laws have not been accompanied by a clearly attributed fall in overall fatalities.[22] Most claims of risk compensation offsetting the effects of vehicle regulation and belt use laws has been discredited by research using more refined data.[13]

In the 1990s, Hans Monderman's studies of driver behavior led him to the realization that signs and regulations had an adverse effect on a driver's ability to interact safely with other road users. Monderman developed shared space principles, rooted in the principles of the woonerven of the 1970s. He concluded that the removal of highway clutter, while allowing drivers and other road users to mingle with equal priority, could help drivers recognize environmental clues. They relied on their cognitive skills alone, reducing traffic speeds radically and resulting in lower levels of road casualties and lower levels of congestion.[23]

Some crashes are intended; staged crashes, for example, involve at least one party who hopes to crash a vehicle in order to submit lucrative claims to an insurance company.[24] In the USA in the 1990s, criminals recruited Latin immigrants to deliberately crash cars, usually by cutting in front of another car and slamming on the brakes. It was an illegal and risky job, and they were typically paid only $100. Jose Luis Lopez Perez, a staged crash driver, died after one such maneuver, leading to an investigation that uncovered the increasing frequency of this type of crash Read more...


A 1985 study by K. Rumar, using British and American crash reports as data, suggested 57% of crashes were due solely to driver factors, 27% to combined roadway and driver factors, 6% to combined vehicle and driver factors, 3% solely to roadway factors, 3% to combined roadway, driver, and vehicle factors, 2% solely to vehicle factors, and 1% to combined roadway and vehicle factors.[12] Reducing the severity of injury in crashes is more important than reducing incidence and ranking incidence by broad categories of causes is misleading regarding severe injury reduction. Vehicle and road modifications are generally more effective than behavioral change efforts with the exception of certain laws such as required use of seat belts, motorcycle helmets and graduated licensing of teenagers

Health effects


Following some collisions long lasting psychological problems may occur.[11] These issues may make those who have been in a crash afraid to drive again. In some cases, the psychological trauma may affect individuals' ability to work and take on family responsibilities.

A number of physical injuries can commonly result from the blunt force trauma caused by an accident, ranging to bruising and contusions to catastrophic physical injury (e.g., paralysis)


See also: Road collision types

Traffic collisions can be classified by general type. Types of collision include head-on, road departure, rear-end, side collisions, and rollovers.
A traffic collision from 1952

Many different terms are commonly used to describe vehicle collisions. The World Health Organization use the term road traffic injury,[4] while the U.S. Census Bureau uses the term motor vehicle accidents (MVA),[5] and Transport Canada uses the term "motor vehicle traffic collision" (MVTC).[6] Other common terms include auto accident, car accident, car crash, car smash, car wreck, motor vehicle collision (MVC), personal injury collision (PIC), road accident, road traffic accident (RTA), road traffic collision (RTC), road traffic incident (RTI), road traffic accident and later road traffic collision, as well as more unofficial terms including smash-up, pile-up, and fender bender.

A rolled over box truck being
 handled by firefighters in Jakarta, Indonesia
Some organizations have begun to avoid the term "accident". Although auto collisions are rare in terms of the number of vehicles on the road and the distance they travel, addressing the contributing factors can reduce their likelihood. For example, proper signage can decrease driver error and thereby reduce crash frequency by a third or more.[7] That is why these organizations prefer the term "collision" to "accident". In the UK the term "incident" is displacing "accident" in official and quasi-official use.[8][9]

Historically in the United States, use of terms other than "accidents" had been criticized for holding back safety improvements, based on the idea that a culture of blame may discourage the involved parties from fully disclosing the facts, and thus frustrate attempts to address the real root causes

Traffic collision

A traffic collision, also known as a motor vehicle collision (MVC), traffic accident, motor vehicle accident, car accident, automobile accident, road traffic collision, road traffic accident, wreck, car crash, or car smash occurs when a vehicle collides with another vehicle, pedestrian, animal, road debris, or other stationary obstruction, such as a tree or utility pole. Traffic collisions may result in injury, death and property damage.
A head-on collision involving two vehicles

Classification and external resources

Specialty Emergency medicine
ICD-10 V89.2 or V99
ICD-9-CM E810 - E819
MeSH D000063

A number of factors contribute to the risk of collision, including vehicle design, speed of operation, road design, road environment, and driver skill, impairment due to alcohol or drugs, and behavior, notably speeding and street racing. Worldwide, motor vehicle collisions lead to death and disability as well as financial costs to both society and the individuals involved.

Road injuries occurred in about 54 million people in 2013.[1] This resulted in 1.4 million deaths in 2013, up from 1.1 million deaths in 1990.[2] About 68,000 of these occurred in children less than five years old.[2] Almost all high-income countries have decreasing death rates, while the majority of low-income countries have increasing death rates due to traffic collisions. Middle-income countries have the highest rate with 20 deaths per 100,000 inhabitants, 80% of all road fatalities by only 52% of all vehicles. While the death rate in Africa is the highest (24.1 per 100,000 inhabitants), the lowest rate is to be found in Europe (10.3)


1 Terminology

2 Health effects
        2.1 Psychological
        2.2 Physical

3 Causes
        3.1 Human factors
        3.2 Road design
        3.3 Vehicle design and maintenance

4 Prevention
        4.1 United Nations

5 Epidemiology
        5.1 Crash rates
        5.2 Fatality

6 History

7 Society and culture
        7.1 Economic costs
        7.2 Legal consequences
        7.3 Art

8 See also

9 References

10 External links

External links

  • How Car Insurance Works at HowStuffWorks


Types of insurance
  • Health
Accidental death and dismemberment Dental Disability (Total permanent disability) Income protection Long-term care National health Payment protection
  • Life
Mortgage life Term life Universal life Variable universal life Whole life
  • Business
Bond Business owner Directors and officers liability Fidelity Professional liability Protection and indemnity Trade credit Umbrella
  • Residential
Contents Earthquake Flood Home Landlords' Lenders mortgage Mortgage Property Renters' Title
  • Transport/
  • Communication
Aviation Computer Public auto Marine Satellite Shipping Travel Vehicle
  • Other
Reinsurance Casualty Crime Crop Divorce Group Liability No-fault Pet Terrorism Wage War risk Weather Workers' compensation Takaful

Insurance policy and law
Insurance policy Insurance law Health Insurance Portability and Accountability Act

History of insurance Unitised insurance fund

Category List of topics

Authority control
NDL: 00574685

Categories: Vehicle insurance Types of insurance Automobile costs


1 Wenzel T. (1995). Analysis of national pay-as-you-drive insurance systems and other variable driving charges. Lawrence Berkeley Lab., CA.

2 Jump up ^ "Green Slips". New South Wales Government, Motor Accidents Authority.

3 Jump up ^ Insurance Bureau of Canada. (1 January 2003).

4 Jump up ^ The Green Card Insurance System Hungary. Retrieved 11 November 2014.

5 Jump up ^ PT. Jasa Raharja | Asuransi Kecelakaan Lalulintas Jalan dan Penumpang Umum.

6 Jump up ^ Road Traffic Act, 1933, Section 61.

7 Jump up ^ Road Traffic Act, 1961. (29 July 1961).

8 Jump up ^ "Am I covered?". Accident Compensation Corporation. Retrieved 23 December 2011.

9 Jump up ^ "How we're funded". Accident Compensation Corporation. Retrieved 23 December 2011.

10 Jump up ^ "Poliţele RCA se scumpesc în 2009 cu 10 până la 30%". Realitatea (in Romanian). 6 March 2009. Retrieved 11 June 2009.

11 Jump up ^ "Petrol Structure". Department of Minerals and Energy, South Africa. Retrieved 11 May 2006.

12 Jump up ^ "South African Road Accident Fund Act of 1996". South African Government. Retrieved 4 December 2009.

13 Jump up ^

14 Jump up ^ Stay insured: penalties for vehicles without motor insurance : Directgov – Motoring.

15 Jump up ^ DVLA Vehicle Licensing Online.

16 Jump up ^

17 Jump up ^ "Basic Ratemaking" (Article). Casualty Actuarial Society. Retrieved 28 March 2013.

18 Jump up ^ "What determines the price of my policy?". Insurance Information Institute. Retrieved 11 May 2006.

19 Jump up to: a b Cendrowicz, Leo (2 March 2011) E.U. Court to Insurers: Stop Making Men Pay More,

20 Jump up ^ "Auto Insurance for Teens". 21 April 2009.

21 Jump up ^ "How Points on Your Driver's Licence Affect Your Auto Insurance Premiums".

22 Jump up ^ Miller, Roger LeRoy and Stafford, Alan D. (16 January 2009). Economic Education for

23 Consumers. Cengage Learning. p. 475. ISBN 978-0-538-44888-8. Retrieved 6 September 2011.

24 Jump up ^ "Cents Per Mile Now". Retrieved 11 May 2006.

25 Jump up ^ "Progressive's "pay-as-you-drive" auto insurance poised for wide rollout". Retrieved 11 May 2006.

26 Jump up ^ Smartphone-Based Measurement Systems for Road Vehicle Traffic Monitoring and Usage-Based Insurance, P. Händel, J. Ohlsson, M. Ohlsson, I. Skog, and E. Nygren, IEEE SYSTEMS JOURNAL, [1]

27 Jump up ^ P. Handel, I. Skog, J. Wahlstrom, F. Bonawide, R. Welsh, J. Ohlsson, and M. Ohlsson: Insurance telematics: opportunities and challenges with the smartphone solution, Intelligent Transportation Systems Magazine, IEEE, vol.6, no.4, pp. 57-70, winter 2014, doi: 10.1109/MITS.2014.2343262

27 Jump up to: a b "Snapshot, Snapshot Discount: Pay As You Drive (PAYD)".

28 Jump up ^ Parker, Tim. "How Auto Insurance By The Mile Works". Investopedia.

29 Jump up ^ Constine, Josh. "Metromile Launches Per-Mile Car Insurance That Could Save Californians 40%". TechCrunch.

30 Jump up ^ "Need Credit or Insurance? Your credit scores helps determine how much you will pay". Retrieved 9 January 2010.

31 Jump up ^ "Bad Credit worse than bad driving". Wall Street Journal. 11 February 2009. Retrieved 9 January 2010.

32 Jump up ^ Davis, Harold (21 May 2009) 'Black Box' idea travels to cars.

33 Jump up ^ US patent application 20090063201 "SoberTeen driving insurance". (20 May 2009).

34 Jump up ^ Lerner, Michele (20 September 2011). "Auto repair insurance pledges to pay your breakdown bills". Fox Business. Retrieved 27 November 2011.

See also

  • Alcohol exclusion laws
  • Assigned risk
  • Damage waiver for rental cars
  • Extended coverage
  • Family purpose doctrine
  • Health insurance

  • International Motor Insurance Card System
  • Insurance Information and Enforcement System
  • Omnibus clause
  • Automobile costs

Repair insurance

The examples and perspective in this section deal primarily with the United States and do not represent a worldwide view of the subject. Please improve this article and discuss the issue on the talk page. (September 2012)

Auto repair insurance is an extension of car insurance available in all 50 of the United States that covers the natural wear and tear on a vehicle, independent of damages related to a car accident.

Some drivers opt to buy the insurance as a means of protection against costly breakdowns unrelated to an accident. In contrast to more standard and basic coverages such as comprehensive and collision insurance, auto repair insurance does not cover a vehicle when it is damaged in a collision, during a natural disaster or at the hands of vandals.[citation needed]

For many it is an attractive option for protection after the warranties on their cars expire.

Providers can also offer sub-divisions of auto repair insurance. There is standard repair insurance which covers the wear and tear of vehicles, and naturally occurring breakdowns. Some companies will only offer mechanical breakdown insurance, which only covers repairs necessary when breakable parts need to be fixed or replaced. These parts include transmissions, oil pumps, pistons, timing gears, flywheels, valves, axles and joints

Behavior-based insurance

The use of non-intrusive load monitoring to detect drunk driving and other risky behaviors has been proposed.[32] A US patent application combining this technology with a usage based insurance product to create a new type of behavior based auto insurance product is currently open for public comment on peer to patent.[33] See Behavior-based safety. Behaviour based Insurance focusing upon driving is often called Telematics or Telematics 2.0 in some cases monitoring focus upon behavioural analysis such as smooth driving.

Credit ratings

Insurance companies have started using credit ratings of their policyholders to determine risk. Drivers with good credit scores get lower insurance premiums, as it is believed that they are more financially stable, more responsible and have the financial means to better maintain their vehicles. Those with lower credit scores can have their premiums raised or insurance canceled outright.[30] It has been shown that good drivers with spotty credit records could be charged higher premiums than bad drivers with good credit records

OBDII-based system

The Progressive Corporation launched Snapshot to give drivers a customized insurance rate based on recording how, how much, and when their car is driven.[27] Snapshot is currently available in 46 states plus the District of Columbia. Because insurance is regulated at the state level, Snapshot is currently not available in Alaska, California, Hawaii, and North Carolina.[27] Driving data is transmitted to the company using an on-board telematic device. The device connects to a car's OnBoard Diagnostic (OBD-II) port (all petrol automobiles in the USA built after 1996 have an OBD-II.) and transmits speed, time of day and number of miles the car is driven. Cars that are driven less often, in less-risky ways, and at less-risky times of day, can receive large discounts. Progressive has received patents on its methods and systems of implementing usage-based insurance and has licensed these methods and systems to other companies.

Metromile also uses an OBDII-based system for their mileage-based insurance. They offer a true pay-per-mile insurance where behavior or driving style is not taken into account, and the user only pays a base rate along with a fixed rate per mile.[28] The OBD-II device measures mileage and then transmits mileage data to servers. This is intended to be an affordable car insurance policy for low-mileage drivers. Metromile is currently only offering personal car insurance policies and is available in California, Oregon, Washington, and Illinois

GPS-based system

In 1998, the Progressive Insurance company started a pilot program in Texas, in which drivers received a discount for installing a GPS-based device that tracked their driving behavior and reported the results via cellular phone to the company.[24] Policyholders were reportedly more upset about having to pay for the expensive device than they were over privacy concerns.[citation needed] The program was discontinued in 2000. In following years many policies (including Progressive) have been tried and successfully introduced worldwide into what are referred to as Telematic Insurance. Such 'telematic' policies typically are based on black-box insurance technology, such devices derive from stolen vehicle and fleet tracking but are used for insurance purposes. Since 2010 GPS-based and Telematic Insurance systems have become more mainstream in the auto insurance market not just aimed at specialised auto-fleet markets or high value vehicles (with an emphasis on stolen vehicle recovery). Modern GPS-based systems are branded as 'PAYD' Pay As You Drive insurance policies, 'PHYD' Pay How You Drive or since 2012 Smartphone auto insurance policies which utilise smartphones as a GPS sensor, e.g. .[25] A detailed survey of the smartphone as measurement probe for insurance telematics is provided in

Odometer-based systems

Cents Per Mile Now[23] (1986) advocates classified odometer-mile rates, a type of usage-based insurance. After the company's risk factors have been applied, and the customer has accepted the per-mile rate offered, then customers buy prepaid miles of insurance protection as needed, like buying gallons of gasoline (litres of petrol). Insurance automatically ends when the odometer limit (recorded on the car's insurance ID card) is reached, unless more distance is bought. Customers keep track of miles on their own odometer to know when to buy more. The company does no after-the-fact billing of the customer, and the customer doesn't have to estimate a "future annual mileage" figure for the company to obtain a discount. In the event of a traffic stop, an officer could easily verify that the insurance is current, by comparing the figure on the insurance card to that on the odometer.

Critics point out the possibility of cheating the system by odometer tampering. Although the newer electronic odometers are difficult to roll back, they can still be defeated by disconnecting the odometer wires and reconnecting them later. However, as the Cents Per Mile Now website points out:

As a practical matter, resetting odometers requires equipment plus expertise that makes stealing insurance risky and uneconomical. For example, to steal 20,000 miles [32,200 km] of continuous protection while paying for only the 2000 in the 35000 to 37000 range on the odometer, the resetting would have to be done at least nine times, to keep the odometer reading within the narrow 2,000-mile [3,200 km] covered range. There are also powerful legal deterrents to this way of stealing insurance protection. Odometers have always served as the measuring device for resale value, rental and leasing charges, warranty limits, mechanical breakdown insurance, and cents-per-mile tax deductions or reimbursements for business or government travel. Odometer tampering, detected during claim processing, voids the insurance and, under decades-old state and federal law, is punishable by heavy fines and jail.

Under the cents-per-mile system, rewards for driving less are delivered automatically, without the need for administratively cumbersome and costly GPS technology. Uniform per-mile exposure measurement for the first time provides the basis for statistically valid rate classes. Insurer premium income automatically keeps pace with increases or decreases in driving activity, cutting back on resulting insurer demand for rate increases and preventing today's windfalls to insurers, when decreased driving activity lowers costs but not premiums

Reasonable distance estimation

Another important factor in determining car-insurance premiums involves the annual mileage put on the vehicle, and for what reason. Driving to and from work every day at a specified distance, especially in urban areas where common traffic routes are known, presents different risks than how a retiree who does not work any longer may use their vehicle. Common practice has been that this information was provided solely by the insured person, but some insurance providers have started to collect regular odometer readings to verify the risk.


Some car insurance plans do not differentiate in regard to how much the car is used. There are however low-mileage discounts offered by some insurance providers. Other methods of differentiation would include: over-road distance between the ordinary residence of a subject and their ordinary, daily destinations.

Vehicle classification

Two of the most important factors that go into determining the underwriting risk on motorized vehicles are: performance capability and retail cost. The most commonly available providers of auto insurance have underwriting restrictions against vehicles that are either designed to be capable of higher speeds and performance levels, or vehicles that retail above a certain dollar amount. Vehicles that are commonly considered luxury automobiles usually carry more expensive physical damage premiums because they are more expensive to replace. Vehicles that can be classified as high performance autos will carry higher premiums generally because there is greater opportunity for risky driving behavior. Motorcycle insurance may carry lower property-damage premiums because the risk of damage to other vehicles is minimal, yet have higher liability or personal-injury premiums, because motorcycle riders face different physical risks while on the road. Risk classification on automobiles also takes into account the statistical analysis of reported theft, accidents, and mechanical malfunction on every given year, make, and model of auto.

Marital status

Statistics show that married drivers average fewer accidents than the rest of the population so policy owners who are married often receive lower premiums than single persons

U.S. driving history

In most U.S. states, moving violations, including running red lights and speeding, assess points on a driver's driving record. Since more points indicate an increased risk of future violations, insurance companies periodically review drivers' records, and may raise premiums accordingly. Rating practices, such as debit for a poor driving history, are not dictated by law. Many insurers allow one moving violation every three to five years before increasing premiums. Accidents affect insurance premiums similarly. Depending on the severity of the accident and the number of points assessed, rates can increase by as much as twenty to thirty percent.[21] Any motoring convictions should be disclosed to insurers, as the driver is assessed by risk from prior experiences while driving on the road.


Teenage drivers who have no driving record will have higher car insurance premiums. However, young drivers are often offered discounts if they undertake further driver training on recognized courses, such as the Pass Plus scheme in the UK. In the US many insurers offer a good-grade discount to students with a good academic record and resident-student discounts to those who live away from home. Generally insurance premiums tend to become lower at the age of 25. Some insurance companies offer "stand alone" car insurance policies specifically for teenagers with lower premiums. By placing restrictions on teenagers' driving (forbidding driving after dark, or giving rides to other teens, for example), these companies effectively reduce their risk.[20]

Senior drivers are often eligible for retirement discounts, reflecting the lower average miles driven by this age group. However, rates may increase for senior drivers after age 65, due to increased risk associated with much older drivers. Typically, the increased risk for drivers over 65 years of age is associated with slower reflexes, reaction times, and being more injury-prone.


On 1 March 2011, the European Court of Justice decided insurance companies who used gender as a risk factor when calculating insurance premiums were breaching EU equality laws.[19] The Court ruled that car-insurance companies were discriminating against men

Basis of premium charges

Main article: auto insurance risk selection
Depending on the jurisdiction, the insurance premium can be either mandated by the government or determined by the insurance company, in accordance with a framework of regulations set by the government. Often, the insurer will have more freedom to set the price on physical damage coverages than on mandatory liability coverages.

When the premium is not mandated by the government, it is usually derived from the calculations of an actuary, based on statistical data. The premium can vary depending on many factors that are believed to have an impact on the expected cost of future claims.[17] Those factors can include the car characteristics, the coverage selected (deductible, limit, covered perils), the profile of the driver (age, gender, driving history) and the usage of the car (commute to work or not, predicted annual distance driven)

Voluntary excess

To reduce the insurance premium, the insured party may offer to pay a higher excess (deductible) than the compulsory excess demanded by the insurance company. The voluntary excess is the extra amount, over and above the compulsory excess, that is agreed to be paid in the event of a claim on the policy. As a bigger excess reduces the financial risk carried by the insurer, the insurer is able to offer a significantly lower premium.

Compulsory excess

A compulsory excess is the minimum excess payment the insurer will accept on the insurance policy. Minimum excesses vary according to the personal details, driving record and the insurance company.


An excess payment, also known as a deductible, is a fixed contribution that must be paid each time a car is repaired with the charges billed to an automotive insurance policy. Normally this payment is made directly to the accident repair "garage" (the term "garage" refers to an establishment where vehicles are serviced and repaired) when the owner collects the car. If one's car is declared to be a "write off" (or "totaled"), when the insurance company will deduct the excess agreed on the policy from the settlement payment it makes to the owner.

If the accident was the other driver's fault, and this fault is accepted by the third party's insurer, then the vehicle owner may be able to reclaim the excess payment from the other person's insurance company.

Coverage levels

Vehicle insurance can cover some or all of the following items:

  • The insured party (medical payments)
  • Property damage caused by the insured
  • The insured vehicle (physical damage)
  • Third parties (car and people, property damage and bodily injury)
  • Third party, fire and theft
  • In some jurisdictions coverage for injuries to persons riding in the insured vehicle is available 
  • without regard to fault in the auto accident (No Fault Auto Insurance)
  • The cost to rent a vehicle if yours is damaged.
  • The cost to tow your vehicle to a repair facility.
  • Accidents involving uninsured motorists.

Different policies specify the circumstances under which each item is covered. For example, a vehicle can be insured against theft, fire damage, or accident damage independently.

If a vehicle is declared a total loss and the vehicle's market value is less than the amount that is still owed to the bank that is financing the vehicle, GAP insurance may cover the difference. Not all auto insurance policies include GAP insurance. GAP insurance is often offered by the finance company at time the vehicle is purchased.

United States

Main article: Vehicle insurance in the United States

The regulations for vehicle insurance differ with each of the 50 US states and other territories, with each U.S. state having its own mandatory minimum coverage requirements (see separate main article). Each of the 50 U.S. states and the District of Columbia requires drivers to have insurance coverage for both bodily injury and property damage, but the minimum amount of coverage required by law varies by state. For example, minimum bodily injury liability coverage requirements range from $20,000 in Florida to $100,000 in Alaska and Maine, while minimum property damage liability requirements range from $5,000 (four states) to $25,000 (16 states)

Investigation into repair costs & fraudulent claims

In September 2012 it was announced that the Competition Commission had launched an investigation into the UK system for credit repairs and credit hire of an alternative vehicle leading to claims from third parties following an accident. Where their client is considered to be not at fault, Accident Management Companies will take over the running of their client's claim and arrange everything for them, usually on a 'No Win - No Fee' basis. It was shown that the insurers of the at-fault vehicle, were unable to intervene in order to have control over the costs that were applied to the claim by means of repairs, storage, vehicle hire, referral fees and personal injury. The subsequent cost of some items submitted for consideration has been a cause for concern over recent years as this has caused an increase in the premium costs, contrary to the general duty of all involved to mitigate the cost of claims. Also, the recent craze of "Cash for crash" has substantially raised the cost of policies. This is where two parties arrange a collision between their vehicles and one driver making excessive claims for damage and non existent injuries to themselves and the passengers that they had arranged to be "in the vehicle" at the time of the collision. Another recent development has seen crashes being caused deliberately by a driver "slamming" on their brakes so that the driver behind impacts them, this is usually carried out at roundabout junctions, when the following driver is looking to the right for oncoming traffic and does not notice that the vehicle in front has suddenly stopped for no reason. The 'staging' of a motor collision on the Public Highway for the purpose of attempting an insurance fraud is considered by the Courts to be organised crime and upon conviction is dealt with as such.

United Kingdom

Uninsured cars seized by Merseyside Police on display 
outside the forces headquarters in 2006
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,[13] (generally referred to as the RTA 1988 as amended) which was last modified in 1991. The Act requires that motorists either be insured, or have made a specified deposit (£500,000 in 1991) and keeps the sum deposited with the Accountant General of the Supreme Court, against liability for injuries to others (including passengers) 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 (even if a greater part of it is on private land) 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 (for example, a supermarket car park during opening hours) 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 (MID) 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 (ANPR) 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 (so-called because the order was form number 1 issued by the Home Office Road Traffic dept). 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 (and usually other driving documents as well) 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 (CIE) 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.[14]

Insurer, and Vehicle Excise Duty (VED) / 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 (for example, Historic Vehicles and cars with low or zero emissions) 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.[15] 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 (DVLA) 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 (tax disc) on a vehicle.[16] 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 (SORN) 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 (as untaxed on or before 31/10/1998 and has had no tax or SORN activity since); is recorded as 'stolen and not recovered' by the Police; is between registered keepers; or is scrapped.

Road Traffic Act Only Insurance differs from Third Party Only Insurance (detailed below) and is not often sold, unless to underpin, for example, a corporate body wishing to self-insure above the requirements of the Act. It provides the very minimum cover to satisfy the requirements of the Act. Road Traffic Act Only Insurance has a limit of £1,000,000 for damage to third party property, while third party only insurance typically has a greater limit for third party property damage.

Motor insurers in the UK place a limit on the amount that they are liable for in the event of a claim by third parties against a legitimate policy. This can be explained in part by the Great Heck Rail Crash that cost the insurers over £22 million in compensation for the fatalities and damage to property caused by the actions of the insured driver of a motor vehicle that caused the disaster. No limit applies to claims from third parties for death or personal injury, however UK car insurance is now commonly limited to £20m for any claim or series of claims for loss of or damage to third party property caused by or arising out of one incident.

The minimum level of insurance cover generally available, and which satisfies the requirement of the Act, is called third party only insurance. The level of cover provided by Third party only insurance is basic, but does exceed the requirements of the act. This insurance covers any liability to third parties, but does not cover any other risks.

More commonly purchased is third party, fire and theft. This covers all third party liabilities and also covers the vehicle owner against the destruction of the vehicle by fire (whether malicious or due to a vehicle fault) and theft of the insured vehicle. It may or may not cover vandalism. This kind of insurance and the two preceding types do not cover damage to the vehicle caused by the driver or other hazards.

Comprehensive insurance covers all of the above and damage to the vehicle caused by the driver themselves, as well as vandalism and other risks. This is usually the most expensive type of insurance. Interestingly, it is custom in the UK for insurance customers to refer to their Comprehensive Insurance as "Fully Comprehensive" or popularly, "Fully Comp". This is a tautology as the word 'Comprehensive' means full.

Some classes of vehicle ownership, or use, are "Crown Exempt" from the requirement to be covered under the Act including vehicles owned or operated by certain councils and local authorities, national park authorities, education authorities, police authorities, fire authorities, health service bodies, the security services and vehicles used to or from Shipping Salvage purposes. Although exempt from the requirement to insure this provides no immunity against claims being made against them, so an otherwise Crown Exempt authority may chose to insure conventionally, preferring to incur the known expense of insurance premiums rather than accept the open-ended exposure of effectively, self-insuring under Crown Exemption.

The Motor Insurers' Bureau (MIB) compensates the victims of road accidents caused by uninsured and untraced motorists. It also operates the MID, which contain details of every insured vehicle in the country and acts as a means to share information between Insurance Companies.

Soon after the introduction of the Road Traffic Act in 1930, unexpected issues arose when motorists needed to drive a vehicle other than their own in genuine emergency circumstances. Volunteering to move a vehicle, for example, where another motorist had been taken ill or been involved in an accident, could lead to the 'assisting' driver being prosecuted for no insurance if the other car's insurance did not cover use by any driver. To alleviate this situation an extension to UK Car Insurances was introduced allowing a Policyholder to personally drive any other motor car not belonging to him/her and not hired to him/her under a hire purchase or leasing agreement. This extension of cover, known as "Driving Other Cars" (where it is granted) usually applies to the Policyholder only. The cover provided is for Third Party Risks only and there is absolutely no cover for loss of or damage to the vehicle being driven. This aspect of UK motor insurance is the only one that purports to cover the driving of a vehicle, not use.

On 1 March 2011 the European Court of Justice in Luxembourg ruled that gender could no longer be used by insurers to set car insurance premiums. The new ruling will come into action from December 2012.[citation needed]

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.

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.[11][12]

Russian Federation

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


Romanian law mandates Răspundere Auto Civilă, a motor-vehicle liability insurance for all vehicle owners to cover damages to third parties.[10]


In Norway, the vehicle owner must provide the minimum of liability insurance for his vehicle(s) – 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.

New Zealand

Within New Zealand, the Accident Compensation Corporation (ACC) provides nationwide no-fault personal injury insurance.[8] 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.[9]


The law 990/1969 requires that each motor vehicle or trailer standing or moving in a public road to have a third party insurance (called RCA, Responsabilità civile per gli autoveicoli). 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 (ANIA, Associazione Nazionale Imprese Assicuratrici) and the National Transportation Authority (Motorizzazione Civile) to verify (by private citizens and public authorities) 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 (included the insured person and third parties carried with the vehicle, but not the driver, if the two do not coincide). Also the third parties, fire and theft are common insurance policies, while the all inclusive policies (kasko policy) 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 (usually in case of DUI or other infringement of the law by the driver).

The victims of accident caused by non-insured vehicles could be compensated by the Road's Victim Warranty Fund (Fondo garanzia vittime della strada), which is covered by a fixed amount (2.5%, as 2015) of each RCA insurance premium.


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 (large) sum of money with the High Court as a guarantee against claims. In 1933 this figure was set at £15,000.[6] The Road Traffic Act, 1961[7] (which is currently in force) 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 (an insurance disc) on their vehicles windscreen (if fitted).[citation needed] 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.[citation needed]

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 (but not those suffering damage or loss) from hit and run offences.


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 manmade 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.


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 SHOE named PT. Jasa Raharja (Persero).[5]


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 (about €1.8M) per accident without deductible. The coverage is extended to HUF 1,250M (about €4.5M) 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.[4]


International Motor Insurance Card (UK)
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 (damage to people), 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 insurance of 50 Million Euro or 100 Million Euro (about 141 Million Dollar) for bodily injury, property damage and other financial/fortune loss (usually with a bodily injury coverage limitation of 8 to 15 million euro for EACH bodily injured person).


Several Canadian provinces (British Columbia, Saskatchewan, Manitoba and Quebec) 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 (IIB) 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 (less than a $1000 deductible, such as a collision damage waiver) 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.[3]


In Australia, Compulsory Third Party Personal Injury Insurance (CTP) 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.


Compulsory Third Party Personal Injury (CTP) 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,'[2] 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 (NRMA). 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.[citation needed]

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

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.

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 (petrol tax). This would address issues of uninsured motorists and also charge based on the miles (kilometers) driven, which would theoretically increase the efficiency of the insurance, through streamlined collection.[1]

       2.1 Australia
       2.2 Canada
       2.3 Germany
       2.4 Hungary
       2.5 Indonesia
       2.6 India
       2.7 Ireland
       2.8 Italy
       2.9 New Zealand
       2.10 Norway
       2.11 Romania
       2.12 Russian Federation
       2.13 South Africa
       2.14 United Arab Emirates
       2.15 United Kingdom

           2.15.1 Investigation into repair costs & fraudulent 


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 face 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.[citation needed] Germany enacted similar legislation in 1939.

Vehicle insurance

Vehicle insurance (also known as car insurance or motor 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.

Contents [hide] 

1 History

2 Public policies
       2.1 Australia
       2.2 Canada
       2.3 Germany
       2.4 Hungary
       2.5 Indonesia
       2.6 India
       2.7 Ireland
       2.8 Italy
       2.9 New Zealand
       2.10 Norway
       2.11 Romania
       2.12 Russian Federation
       2.13 South Africa
       2.14 United Arab Emirates
       2.15 United Kingdom
           2.15.1 Investigation into repair costs & fraudulent claims
       2.16 United States

3 Coverage levels

4 Excess
       4.1 Compulsory excess
       4.2 Voluntary excess

5 Basis of premium charges
       5.1 Gender
       5.2 Age
       5.3 U.S. driving history
       5.4 Marital status
       5.5 Vehicle classification
       5.6 Distance
               5.6.1   Reasonable distance estimation
               5.6.2   Odometer-based systems
               5.6.3   GPS-based system
               5.6.4   OBDII-based system
        5.7 Credit ratings
        5.8 Behavior-based insurance

6 Repair insurance

7 See also

8 References

9 External links