New York Insurance

What is Auto insurance ?

As its name implies, vehicle or auto insurance stands for insurance purchased for motor vehicles (cars, trucks etc.) with the primary purpose to provide protection against losses or/and liabilities incurred as a result of traffic accidents.

Public policy in the U.S. and vehicle insurance basics

Being compulsory in most states, however, car insurance is subject to enforcement which varies from state to state. In this regard two basic vehicle insurance models can be distinguished.
1. The ballpark model. Just like visitors to ballparks bear the risk of being hit by various objects such as balls and bats, the users of the ballpark vehicle insurance model bear the risk of driving and being hit by other participants in the traffic, who have neither insurance nor the means to pay for damages caused. New Hampshire’s lack of a requirement that motorists carry liability insurance is often associated with this type of system.
2. The Disneyland model. The name of this type of insurance system comes from the responsibility which the company managing the Disneyland parks bears in case an accident befalls its customer. As far as vehicle insurance is concerned, in this case as opposed to the ballpark model, users of the system bear no risk for damages caused by other participants in the traffic. The full liability is instead imposed upon the responsible party and/or their insurance company. This insurance system is often cited as a method of privatizing the licensure of motorists and their vehicles. Under this model the Arizona Department of Transportation recommended that car insurance companies issue license plates and bear the responsibility for the full cost of injuries caused by their clients. After expiry the license plates should be returned to the insurance office where licensees receive a refund on their insurance premiums.

Another relatively new initiative is the Special Automobile Insurance Policy (SAIP) which is more popular as the Dollar a Day policy, which binds users of limited auto insurance coverage to the Federal Medicaid program. Under this initiative drivers can obtain a medical coverage-only policy for $365 a year. The service is primarily aimed at drivers who are likely to go uninsured due to limited finances. There is, however, one important condition under this insurance plan. People who are eligible for the SAIP are only those who are currently enrolled in Federal Medicaid with Hospitalization program.
This insurance policy covers emergency treatment following traffic accidents as well as treatment of serious brain and spinal cord injuries up to $250,000.

Tags: Auto insurance, car, insurance questions, type of insurance, vehicle insurance

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