Top Five tips for donating your car to charity

You’ve probably seen the ads: Donate your old car to charity, help out a good cause and get a tax write-off. It sounds simple, but experts say consumers must do their research before handing over the keys so they don’t get taken for a ride.

If you want to get an unwanted vehicle off your hands while helping families, kids or animals in need, here are five steps you can take to ensure your donation does as much good as possible.

1. Donate directly to a charity.

The ideal way to donate a car is to find an organization that can use the vehicle in their programs, Meals on Wheels might use the vehicle to deliver food, a local senior center might use it to drive patients to doctor appointments, or a vocational school might use it to teach students how to fix cars.

Going this route offers two benefits: You might be able to get a bigger income tax deduction.

2. Cut out the middleman.

Steer clear of third-party groups that aggressively advertise car donation programs, experts warn. Middlemen often end up keeping large chunk of the proceeds from the car sale, says Sandra Miniutti, vice president of marketing for Charity Navigator, a nonprofit charity evaluator. In fact, a report by the U.S. General Accounting Office reveals that many donated cars are sold cheaply at auction by these third-party groups. After advertising, administrative and towing expenses are deducted, a charity could get as little as $25.

So, even if you can’t find a charity that will use your car in its programs, you might be able to find one that will accept it and sell it directly. You can start by calling your favorite local charities, or even the United Way, which might be able to refer you to an organization in need.

“It’s going to take a little bit of legwork,” Miniutti says.

3. Make sure the organization has a good reputation.

Check out the charity, just the same as if you were donating money to a nonprofit. First, make sure the group is a 501(c) (3) organization so that your donation is tax-deductible. (You can search the IRSwebsite to find out.)

Second, check the charity’s track record at the Better Business Bureau or through the government agency that registers charities in your state, usually either the attorney general or secretary of state. Also, organizations such as GuideStar, CharityWatch and Charity Navigator rate nonprofits based on a variety of factors, such as transparency and expenses.

An example: CharityWatch warns donors that a charity operating as Kars4Kids has been disciplined by several state attorneys general for not openly disclosing that money from car sales goes to support an Orthodox Jewish religious group. The organization, which has raised millions of dollars through catchy radio ads, also had to pay a $65,000 fine in Oregon for not telling donors that the “free vacation” they were promised actually was a timeshare recruitment tool, meaning the car donors sat through a presentation designed to get them to buy a vacation timeshare.

At the time, a spokesman defended Kars4Kids, saying the group simply hadn’t had time in its ads to give full details. On its website, Kars4Kids says donors can choose whether to attend a timeshare presentation during a free two-night hotel stay in a U.S. city. The website says the vacation voucher is offered by a third party and any complaints “will be forwarded to the third party.”

4. Transfer the car properly.

Before you part with your car, the Better Business Bureau recommends you snap a photo of the vehicle for your records. When it’s time to actually hand the car over, make sure the title is transferred from your name to the charity, Borochoff says. That’s because if you unknowingly give your car to a scam artist or even a less-than-responsible charity that keeps the title in your name, it could cause trouble for you down the road.

“Some donors have gotten involved in scary, nightmare situations where their car was involved in a crime or accident and then they’re held responsible,” Borochoff says. “Even just somebody who racks up a lot of traffic tickets could cause you problems.”

It’s also important to notify your car insurance company of the donation right when you relinquish the title, says Brian Rauber, a Farmers Insurance agent in Missouri. At that point, the company will cancel the policy.

5. Know the tax rules for car donation.

The IRS imposes strict rules about the amount you can deduct on your federal income taxes for donating a car, as well as the documentation required. You’ll need to get a letter from the charity explaining its intended use for the car or, if the charity sold it, the amount of money received.

The amount you can deduct depends on whether the organization plans to use your car in its daily operations – in which case you might be able to deduct fair market value of the car – or if the nonprofit sells it.

The IRS outlines what you can deduct in its guide to taxes and car donations. Be careful how you value your donated car on your tax return, Miniutti says, as the IRS scrutinizes car donations closely and any red flags could lead to an audit.

Finally, if you don’t want to go through the hassle of finding a reputable charity that will accept your car, consider selling the car yourself and donating the money,.

Vehicle Insurance - How To Find The Best Car Insurance

Vehicle insurance (also known as, GAP insurance, 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.

History

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 faced 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. Germany enacted similar legislation in 1939.

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 could theoretically increase the efficiency of the insurance, through streamlined collection.

Australia

In AustraliaCompulsory 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.

CTP

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,' another name by which CTP Insurance is commonly known due to the colour of the form, must be obtained through one of the five licenced 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 licenced 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.

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.

Canada

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.

Germany

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 insurances 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).

Hungary

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 EUR1.8M) per accident without deductible. The coverage is extended to HUF 1,250M (about EUR4.5M) 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.

Indonesia

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 SOE named PT. Jasa Raharja (Persero).

India

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 man-made 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.

Ireland

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. The Road Traffic Act, 1961 (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). 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.

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.

Italy

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 Trasportation 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.

New Zealand

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

Norway

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.

Romania

Romanian law mandates R?spundere Auto Civil?, a motor-vehicle liability insurance for all vehicle owners to cover damages to third parties.

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.

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.

United Kingdom

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, UK law is defined by the Road Traffic Act 1988, which was last modified in 1991. The Act requires that motorists either be insured, have a security, or have made a specified deposit (£500,000 in 1991) with the Accountant General of the Supreme Court, against their 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 offense to use a car, or allow others to use it, without the insurance that satisfies the act whilst on the public highway (or public place Section 143(1)(a) RTA 1988 as amended 1991); however, no such legislation applies on private land. Police have the power to seize vehicles that do not have the necessary insurance in place. A driver caught driving without the necessary insurance for that vehicle will be prosecuted by the police and will receive either a fixed penalty or magistrate courts penalty. If convicted the driver will receive an IN10 endorsement on their licence.

Road Traffic Act Only Insurance differs from Third Party Only Insurance (detailed below) and is not often sold. It provides the very minimum cover to satisfy the requirements of the Act. For example, Road Traffic Act Only Insurance has a limit of £1,000,000 for damage to third party property - third party only insurance typically has a greater limit for third party property damage. As a result of costly claims, insurance companies can now no longer place a limit on the amount that they are liable for in the event of a claim by 3rd 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.

The minimum level of insurance cover commonly available, and which satisfies the requirement of the Act, is called third party only insurance. The level of cover provided byThird 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 vehicle itself. 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. For valuable cars, many insurers only offer comprehensive insurance.

Vehicles that are exempt from the requirement to be covered under the Act include those owned by certain councils and local authorities, national park authorities, education authorities, police authorities, fire authorities, health service bodies and security services.

The insurance certificate or cover note issued by the insurance company constitutes legal evidence that the vehicle specified on the document is insured. The law says 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 proof of insurance cannot be found by other means such as the Police National Computer, drivers are no longer issued a HORT/1. This was an order with seven days, from midnight of the date of issue, 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 is an offence. The HORT/1 was commonly known - even by the issuing authorities when dealing with the public - as a "Producer".

Insurance is more expensive in Northern Ireland than in other parts of the UK. In 2010 the cost of car insurance rose by an average of 33%.

Prior to 1 October 2014, all motorists in the UK were required to prominently display a vehicle excise licence (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. Post 1 October 2014 it is no longer a requirement to display a vehicle excise licence (tax disc) on a vehicle.

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

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.

In June 2011 a new law known as Continuous Insurance Enforcement came into force in the UK meaning that a vehicle must have a valid insurance policy if it has a tax disc, whether or not it is kept on public roads and whether or not it is driven. If the car is to be "laid up" for whatever reason, the tax disc must be surrendered and a SORN declaration completed to say that it is off the public roads.

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 by a 3rd party following a non-fault accident. It was announced that insurers of vehicles that had caused a valid claim were unable to control the costs that were applied to the claim by means of repairs, storage, vehicle hire, referral fees and personal injury claims. Many accident management companies will take over the running of a non fault claim and arrange everything for the 3rd party. The subsequent cost of some items submitted for consideration has been a cause for concern over recent years and this has caused an increase in the premium costs. 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 delibarately 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.

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).

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.

How To Avoid Car Accidents

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 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 racing. Worldwide, motor vehicle collisions lead to death and disability as well as financial costs to both society and the individuals involved.

Road injuries resulted in 1.4 million deaths in 2013, up from 1.1 million deaths in 1990. About 68,000 of these occurred in children less than five years old. Almost all high-income countries have decreasing death rates, while the majority of low-income countries having 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).

Terminology

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

Many different terms are commonly used to describe vehicle collisions. The World Health Organization use the term road traffic injury, while the U.S. Census Bureau uses the termmotor vehicle accidents (MVA), and Transport Canada uses the term "motor vehicle traffic collision" (MVTC). 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.

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. 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.

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 - How To Avoid Car Accidents

Diposkan oleh AmiHow di 21.14

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 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 racing. Worldwide, motor vehicle collisions lead to death and disability as well as financial costs to both society and the individuals involved.
Road injuries resulted in 1.4 million deaths in 2013, up from 1.1 million deaths in 1990. About 68,000 of these occurred in children less than five years old. Almost all high-income countries have decreasing death rates, while the majority of low-income countries having 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).

Terminology

Traffic collisions can be classified by general type. Types of collision include head-on, road departure, rear-end, side collisions, and rollovers.
Many different terms are commonly used to describe vehicle collisions. The World Health Organization use the term road traffic injury, while the U.S. Census Bureau uses the termmotor vehicle accidents (MVA), and Transport Canada uses the term "motor vehicle traffic collision" (MVTC). 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.
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. 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.
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.

Signs and symptoms

Psychological

Following some collisions long lasting psychological problems may occur. 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.

Physical

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).

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Causes

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. 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.

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.
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.
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. One survey of drivers reported that they thought the key elements of good driving were:

• 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.

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.
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, with researchers observing that many exhibit behaviors and attitudes to risk that can place them in more hazardous situations than other road users. 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. 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:
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, and another argued that compulsory seat belt laws have not been accompanied by a clearly attributed fall in overall fatalities. Most claims of risk compensation offsetting the effects of vehicle regulation and belt use laws has been discredited by research using more refined data.
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.
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. 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.

Motor vehicle speed

The U.S. Department of Transportation's Federal Highway Administration review research on traffic speed in 1998. 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) is a factor in about 40 percent of road deaths. The RTA also say speeding increases the risk of a crash and its severity. 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."
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:
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.
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, with some jurisdictions requiring driver retesting for reaction speed and eyesight after a certain age.
Fatigue
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.
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, 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.

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.

Road design

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. 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 inadequately compensate for.
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 1/3 reduction in road deaths, saving as much as £6 billion per year. 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.

Vehicle design and maintenance

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. 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. 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.
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. 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. 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.
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). 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.
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.
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%).

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Prevention

A large body of knowledge has been amassed on how to prevent car crashes, and reduce the severity of those that do occur. See Road Traffic Safety.

United Nations

Owing to the global and massive scale of the issue, with predictions that by 2020 road traffic deaths and injuries will exceed HIV/AIDS as a burden of death and disability, the United Nations and its subsidiary bodies have passed resolutions and held conferences on the issue. The first United Nations General Assembly resolution and debate was in 2003 The World Day of Remembrance for Road Traffic Victims was declared in 2005. In 2009 the first high level ministerial conference on road safety was held in Moscow.
The World Health Organization, a specialized agency of the United Nations Organization, in its Global Status Report on Road Safety 2009, estimates that over 90% of the world's fatalities on the roads occur in low-income and middle-income countries, which have only 48% of the world's registered vehicles, and predicts road traffic injuries will rise to become the fifth leading cause of death by 2030

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Epidemiology

Road injuries resulted in 1.4 million deaths in 2013 up from 1.1 million deaths in 1990. This is about 2.5% of all deaths. In 2004 50 million more were injured in motor vehicle collisions. India recorded 105,000 traffic deaths in a year, followed by China with over 96,000 deaths. This makes motor vehicle collisions the leading cause of injury and death among children worldwide 10 - 19 years old (260,000 children die a year, 10 million are injured) and the sixth leading preventable cause of death in the United States (45,800 people died and 2.4 million were injured in 2005). In the state of Texas alone, there were a total of 415,892 traffic collisions, including 3,005 fatal crashes in 2012. In Canada they are the cause of 48% of severe injuries.

Crash rates

The safety performance of roadways is almost always reported as a rate. That is, some measure of harm (deaths, injuries, or number of crashes) divided by some measure of exposure to the risk of this harm. Rates are used so the safety performance of different locations can be compared, and to prioritize safety improvements.
Common rates related to road traffic fatalities include the number of deaths per capita, per registered vehicle, per licensed driver, or per vehicle mile or kilometer traveled. Simple counts are almost never used. The annual count of fatalities is a rate, namely, the number of fatalities per year.
There is no one rate that is superior to others in any general sense. The rate to be selected depends on the question being asked - and often also on what data are available. What is important is to specify exactly what rate is measured and how it relates to the problem being addressed. Some agencies concentrate on crashes per total vehicle distance traveled. Others combine rates. The U.S. state of Iowa, for example, selects high accident locations based on a combination of crashes per million miles traveled, crashes per mile per year, and value loss (crash severity).

Fatality

The definition of a road-traffic fatality varies from country to country. In the United States, the definition used in the Fatality Analysis Reporting System (FARS) run by the National Highway Traffic Safety Administration (NHTSA) is a person who dies within 30 days of a crash on a US public road involving a vehicle with an engine, the death being the result of the crash. In the U.S., therefore, if a driver has a non-fatal heart attack that leads to a road-traffic crash that causes death, that is a road-traffic fatality. However, if the heart attack causes death prior to the crash, then that is not a road-traffic fatality.
The definition of a road accident fatality can change with time in the same country. For example, fatality was defined in France as a person who dies in the 6 days (pre 2005) after the accident and was subsequently changed to the 30 days (post 2005) after the accident.

Vehicle Insurance In The United States

Vehicle insurance, in the United States and elsewhere, is designed to cover risk of financial liability or the loss of a motor vehicle the owner may face if their vehicle is involved in a collision resulting in property or physical damages. Some states require a motor vehicle owner to carry some minimum level of liability insurance. States that do not require the vehicle owner to carry car insurance include Virginia, where an uninsured motor vehicle fee may be paid to the state; New Hampshire, and Mississippi which offers vehicle owners the option to post cash bonds (see below). The privileges and immunities clause of Article IV of the U.S. Constitution protects the rights of citizens in each respective state when traveling to another. A motor vehicle owner typically pays insurers a monthly fee, often called an insurance premium. The insurance premium a motor vehicle owner pays is usually determined by a variety of factors including the type of covered vehicle, the age and gender of any covered drivers, their driving history, and the location where the vehicle is primarily driven and stored. Most insurance companies offer premium discounts based on these factors.

Insurance companies provide a motor vehicle owner with an insurance card for the particular coverage term which is to be kept in the vehicle in the event of a traffic collision as proof of insurance. Recently, states have started passing laws that electronic versions of proof of insurance can now be accepted by the authorities.

Coverage generally

Consumers may be protected by different levels of coverage depending on which insurance policy they purchase. Coverage is sometimes seen as 20/40/15 or 100/300/100. The first two numbers seen are for medical coverage. In the 100/300 example, the policy will pay $100,000 per person up to $300,000 total for all people. The last number covers property damage. This property damage can coverage the other persons vehicle or anything that you hit and damage as a result of the accident. In some states you must purchase Personal Injury Protection which covers medical bills, time lost at work, and many other things. You can also purchase insurance if the other driver does not have insurance or is under insured. Most if not all states require drivers to carry mandatory liability insurance coverage to ensure that their drivers can cover the cost of damage to other people or property in the event of an accident. Some states, such as Wisconsin, have more flexible "proof of financial responsibility" requirements.

Insurance providers

In the United States in 2015, the largest vehicle insurance providers, in terms of market share, were State Farm Insurance, Liberty Mutual Insurance, Allstate, Berkshire Hathaway (which operates as Geico), and The Travelers Companies. Insurance is secured either by working with an independent insurance agent or with an insurance broker who is authorized to sell insurance policies. Some can represent from several agencies, like Guy Carpenter & Company or a growing number of online brokers who provide policy purchases through sites like Quote.com and Walmart.

Liability coverage

Liability coverage, sometimes known as Casualty insurance, is offered for bodily injury (BI) or property damage (PD) for which the insured driver is deemed responsible. The amount of coverage provided (a fixed dollar amount) will vary from jurisdiction to jurisdiction. Whatever the minimum, the insured can usually increase the coverage (prior to a loss) for an additional charge.

An example of property damage is where an insured driver (or 1st party) drives into a telephone pole and damages the pole; liability coverage pays for the damage to the pole. In this example, the drivers insured may also become liable for other expenses related to damaging the telephone pole, such as loss of service claims (by the telephone company), depending on the jurisdiction. An example of bodily injury is where an insured driver causes bodily harm to a third party and the insured driver is deemed responsible for the injuries. However, in some jurisdictions, the third party would first exhaust coverage for accident benefits through their own insurer (assuming they have one) and/or would have to meet a legal definition of severe impairment to have the right to claim (or sue) under the insured driver's (or first party's) policy. If the third party sues the insured driver, liability coverage also covers court costs and damages that the insured driver may be deemed responsible for.

In some states, such as New Jersey, it is illegal to operate (or knowingly allow another to operate) a motor vehicle that does not have liability insurance coverage. If an accident occurs in a state that requires liability coverage, both parties are usually required to bring and/or submit copies of insurance cards to court as proof of liability coverage.

In some jurisdictions: Liability coverage is available either as a combined single limit policy, or as a split limit policy:

Combined single limit

A combined single limit combines property damage liability coverage and bodily injury coverage under one single combined limit. For example, an insured driver with a combined single liability limit strikes another vehicle and injures the driver and the passenger. Payments for the damages to the other driver's car, as well as payments for injury claims for the driver and passenger, would be paid out under this same coverage.

Split limits

A split limit liability coverage policy splits the coverages into property damage coverage and bodily injury coverage. In the example given above, payments for the other driver's vehicle would be paid out under property damage coverage, and payments for the injuries would be paid out under bodily injury coverage.

Bodily injury liability coverage is also usually split into a maximum payment per personand a maximum payment per accident.

The limits are often expressed separated by slashes in the following form: "bodily injury per person"/"bodily injury per accident"/"property damage". For example, California requires this minimum coverage:

• $15,000 for injury/death to one person
• $30,000 for injury/death to more than one person
• $5,000 for damage to property

This would be expressed as "$15,000/$30,000/$5,000".

Another example, in the state of Oklahoma, drivers must carry at least state minimum liability limits of $25,000/$50,000/$25,000. If an insured driver hits a car full of people and is found by the insurance company to be liable, the insurance company will pay $25,000 of one person's medical bills but will not exceed $50,000 for other people injured in the accident. The insurance company will not pay more than $25,000 for property damage in repairs to the vehicle that the insured one hit.

In the state of Indiana, the minimum liability limits are $25,000/$50,000/$10,000, so there is a greater property damage exposure for only carrying the minimum limits.

Rental coverage

Generally, liability coverage purchased through a private insurer extends to rental cars. Comprehensive policies ("full coverage") usually also apply to the rental vehicle, although this should be verified beforehand. Full coverage premiums are based on, among other factors, the value of the insured's vehicle. This coverage, however, cannot apply to rental cars because the insurance company does not want to assume responsibility for a claim greater than the value of the insured's vehicle, assuming that a rental car may be worth more than the insured's vehicle.

Most rental car companies offer insurance to cover damage to the rental vehicle. These policies may be unnecessary for many customers as credit card companies, such as Visa and MasterCard, now provide supplemental collision damage coverage to rental cars if the rental transaction is processed using one of their cards. These benefits are restrictive in terms of the types of vehicles covered.

Maine requires car insurance to rent a car.

Full coverage

Full coverage is the term commonly used to refer to the combination of comprehensive and collision coverages (liability is generally also implied.) The term full coverage is actually a misnomer because, even within traditional full coverage insurance, there are many different types of coverage, and many optional amounts of each. "Full coverage" is a layman's misnomer that often results in drivers and vehicle owners being woefully underinsured. Most responsible insurance agents or brokers do not use this term when working with their clients.

One common misconception in the United States is that vehicles that are financed on credit through a bank or credit union are required to have "full" coverage in order for the financial institution to cover their losses in case of an accident. While most states do require additional coverage to be purchased, some such as Pennsylvania only require Comprehensive and Collision to be purchased in addition to liability and not "full" coverage. Vehicles purchased with cash or paid off by the owner are generally required to only carry liability. In some cases, vehicles financed through a "buy-here-pay-here" car dealership--in which the consumer (generally those with poor credit) finances a car and pays the dealer directly without a bank--also only require liability coverage.

Collision

Collision coverage provides coverage for vehicles involved in collisions. Collision coverage is subject to a deductible. This coverage is designed to provide payments to repair the damaged vehicle, or payment of the cash value of the vehicle if it is not repairable or totaled. Collision coverage is optional, however if you plan on financing a car or taking a car loan, the lender will usually insist you carry collision for the finance term or until the car is paid off. Collision Damage Waiver (CDW) or Loss Damage Waiver (LDW) is the term used by rental car companies for collision coverage.

Comprehensive

Comprehensive, also known as other than collision, coverage provides coverage, subject to a deductible, for cars damaged by incidents that are not considered collisions. For example, fire, theft (or attempted theft), vandalism, weather, or impacts with animals are types of comprehensive losses.

Additionally, the majority of insurance companies list "Acts of God" as an aspect of comprehensive coverage. By definition, it includes any events or occurrences that are beyond human control. For example, a tornado, flood, hurricane, or hail storm would fall under this category.

Uninsured/underinsured motorist coverage

Uninsured/Underinsured coverage, also known as UM/UIM, provides coverage if an at-fault party either does not have insurance, or does not have enough insurance. In effect, the insurance company pays the insured medical bills, then would subrogate from the at fault party. This coverage is often overlooked and very important. In Colorado, for example, it was estimated in 2009 that 15% of drivers were uninsured. Usually the limits match the liability limits. Some insurance companies do offer UM/UIM in an umbrella policy.

Some states maintain unsatisfied judgment funds to provide compensation to those who cannot collect damages from uninsured driver. Typically, the payout is not more than the minimum liability limits and the negligent driver remains responsible for reimbursing the state's fund.

In the United States, the definition of an uninsured/underinsured motorist, and corresponding coverages, are set by state laws. In some states it is mandatory. In the case of underinsured coverage, two different triggers apply: a damages trigger which is based on whether the limits are insufficient to cover the injured party's damages, and a limits trigger which applies when the limits are less than the injured party's limits. According to a 2009 survey by trade association Property Casualty Insurers Association of America, 29 states have a limits trigger while 20 states have a damages trigger. Another variation is whether a particular state requires stacking of policy limits of different vehicles or policies.

Loss of use

Loss of use coverage, also known as rental coverage, provides reimbursement for rental expenses associated with having an insured vehicle repaired due to a covered loss.

Loan/lease payoff

Loan/lease payoff coverage, also known as GAP coverage or GAP insurance, was established in the early 1980s to provide protection to consumers based upon buying and market trends.

Due to the sharp decline in value immediately following purchase, there is generally a period in which the amount owed on the car loan exceeds the value of the vehicle, which is called "upside-down" or negative equity. Thus, if the vehicle is damaged beyond economical repair at this point, the owner will still owe potentially thousands of dollars on the loan. The escalating price of cars, longer-term auto loans, and the increasing popularity of leasing gave birth to GAP protection. GAP waivers provide protection for consumers when a "gap" exists between the actual value of their vehicle and the amount of money owed to the bank or leasing company. In many instances, this insurance will also pay the deductible on the primary insurance policy. These policies are often offered at auto dealerships as a comparatively low cost add-on to the car loan that provides coverage for the duration of the loan. GAP Insurance does not always pay off the full loan value however. These cases include but are not limited to:

1. Any unpaid delinquent payments due at the time of loss
2. Payment deferrals or extensions (commonly called skips or skip a payment)
3. Refinancing of the vehicle loan after the policy was purchased
4. Late fees or other administrative fees assessed after loan commencement

Therefore, it is important for a policy holder to understand that they may still owe on the loan even though the GAP policy was purchased. Failure to understand this can result in the lender continuing their legal remedies to collect the balance and the potential of damaged credit.

Consumers should be aware that a few states, including New York, require lenders of leased cars to include GAP insurance within the cost of the lease itself. This means that the monthly price quoted by the dealer must include GAP insurance, whether it is delineated or not. Nevertheless, unscrupulous dealers sometimes prey on unsuspecting individuals by offering them GAP insurance at an additional price, on top of the monthly payment, without mentioning the State's requirements.

In addition, some vendors and insurance companies offer what is called "Total Loss Coverage." This is similar to ordinary GAP insurance but differs in that instead of paying off the negative equity on a vehicle that is a total loss, the policy provides a certain amount, usually up to $5000, toward the purchase or lease of a new vehicle. Thus, to some extent the distinction makes no difference, i.e., in either case the owner receives a certain sum of money. However, in choosing which type of policy to purchase, the owner should consider whether, in case of a total loss, it is more advantageous for him or her to have the policy pay off the negative equity or provide a down payment on a new vehicle.

For example, assuming a total loss of a vehicle valued at $15,000, but on which the owner owes $20,000, is the "gap" of $5000. If the owner has traditional GAP coverage, the "gap" will be wiped out and he or she may purchase or lease another vehicle or choose not to. If the owner has "Total Loss Coverage," he or she will have to personally cover the "gap" of $5000, and then receive $5000 toward the purchase or lease of a new vehicle, thereby either reducing monthly payments, in the case of financing or leasing, or the total purchase price in the case of outright purchasing. So the decision on which type of policy to purchase will, in most instances, be informed by whether the owner can pay off the negative equity in case of a total loss and/or whether he or she will definitively purchase a replacement vehicle.

Towing

Vehicle towing coverage is also known as roadside assistance coverage. Traditionally, automobile insurance companies have agreed to only pay for the cost of a tow that is related to an accident that is covered under the automobile policy of insurance. This had left a gap in coverage for tows that are related to mechanical breakdowns, flat tires and gas outages. To fill that void, insurance companies started to offer the car towing coverage, which pays for non-accident related tows.

Personal property

Personal items in a vehicle that are damaged due to an accident typically are not covered under the auto insurance policy. Any type of property that is not attached to the vehicle should be claimed under a home insurance or renters' insurance policy. However, some insurance companies will cover unattached GPS devices intended for automobile use.

Rating plans

Insurers use actuarial science to determine the rates, which involves statistical analysis of the various characteristics of drivers.

Public policy considerations

In the United States, automotive insurance covering liability for injuries and property damage is compulsory in most states, but different states enforce the insurance requirement differently. In Virginia, where insurance is not compulsory, residents must pay the state a $500 annual fee per vehicle if they choose not to buy liability insurance. Penalties for not purchasing insurance vary by state, but often include a substantial fine, license and/or registration suspension or revocation, and possible jail time. Usually, the minimum required by law is third party insurance to protect third parties against the financial consequences of loss, damage or injury caused by a vehicle.

California and New Jersey have enacted "Personal Responsibility Acts" which put further pressure on all drivers to carry liability insurance by preventing uninsured drivers from recovering non economic damages (e.g. compensation for "pain and suffering") if they are injured in any way while operating a motor vehicle.

North Carolina is the only state to require that a driver hold liability insurance before a license can be issued. North Carolina does allow for a "fleet license" to be issued if the license holder has no insurance, however the fleet license only allows for the driver to operate vehicles owned and insured by their employer. The license holder must produce a state form (DL-123) to prove they have insurance, requiring the signature of an insurance agent, in addition to a ten dollar fee, in order to convert the fleet license to a full license.

Some states require that proof of insurance be carried in the car at all times, while others do not. For example, North Carolina does not specify that proof of insurance must be carried in the vehicle; it does, however, require that a driver have that information to trade with another driver in the event of an accident. Some states allow for an electronic insurance card to be produced on a smartphone

Arizona Department of Transportation Research Project Manager John Semmens has recommended that car insurers issue license plates and be held responsible for the full cost of injuries and property damage caused by their licensees under the Disneyland model. Plates would expire at the end of the insurance coverage period, and licensees would need to return their plates to their insurance office to receive a refund on their premiums. Vehicles driving without insurance would thus be easy to spot because they would not have license plates, or the plates would be past the marked expiration date.

The compulsory insurance debate

A brief history of car insurance

With the invention of the automobile in the late 19th century came the inevitable side effect of automobile accidents. As automotive accidents increased in frequency, it became clear that, unlike other torts, which relied on personal responsibility, there was a possibility that automobiles would need to be governed by laws because "[t]here was no way of assuring that even though fault was assessed the victim of an automobile accident would be able to collect from the tortfeasor."

This led Massachusetts and Connecticut to create the first financial responsibility and compulsory insurance laws. Connecticut's 1925 financial responsibility law required any vehicle owner involved in an accident with damages over $100 to prove "financial responsibility to satisfy any claim for damages, by reason of personal injury, to, or death of, any person, of at least $10,000." This early financial responsibility requirement only required vehicle owners to prove financial responsibility after their first accident. Massachusetts also introduced a law to address the problem of accidents, but theirs was a compulsory insurance, not financial responsibility law. It required automotive liability insurance as a prerequisite to vehicle registration.

Until 1956, when the New York legislature passed their compulsory insurance law, Massachusetts was the only state in the U.S. that required drivers to get insurance before registration. North Carolina followed suit in 1957 and then in the 1960s and 1970s numerous other states passed similar compulsory insurance laws. Since the genesis of automotive insurance schemes in 1925 nearly every state has adopted a compulsory insurance scheme.

Arguments in favor of compulsory auto insurance

Advocates of compulsory auto insurance rely on the assumption that, at least some of the time, the person at fault in a car accident won't be able to pay for the damage to the other person's car. Because insurance has been mandatory in most states for so long, the data to prove this theory is somewhat sparse. Nevertheless, proponents of compulsory auto insurance argue that:

• There is a risk of nonpayment in car accidents and compulsory auto insurance is the best way to deal with this risk.
• Personal financial responsibility laws are inadequate to remedy the risk of nonpaying, at-fault, drivers.
• The best way to ensure that at-fault drivers will pay for damage they cause is to require insurance before registration, and to penalize drivers if they fail to meet this requirement.

Arguments against compulsory auto insurance

Opponents of compulsory insurance believe that it is not the best way to allocate risk among drivers. New Hampshire and Virginia do not require motor vehicle insurance. In New Hampshire vehicle owners must satisfy a personal responsibility requirement; instead of paying monthly premiums, and prove that they are capable of paying in case of an accident. In Virginia vehicle owners may pay an uninsured motorist fee. In Mississippi vehicle owners may post bonds or cash. Many insurance companies oppose compulsory auto insurance, for example: the NAII (National Association of Independent Insurers). State Farm opposes compulsory auto insurance because it forces poor to choose between groceries and insurance. A study done by Dr Robert Maril showed that, in a poor area of Arizona, 44% said they had trouble buying food or paying rent due to auto insurance. A survey done by the Montana DPHHS showed 12 of the 96 surveyed said auto insurance was a reason for needing food stamps.

Requirements by state

The tables below contain minimum liability requirements for vehicle owners for states within the United States. They are divided into two categories: compulsory and non compulsory. See the table on the right for an explanation of the values.

High-risk market

Insurers may be unwilling to insure drivers (especially at an affordable price) with particularly bad histories, which had led states to create "residual market" programs through which insurers are required to make insurance available. There are various ways that this is accomplished, with the most common being an assigned risk plan and other programs including joint underwriting associations, reinsurance facilities, and in the case of Maryland a state-owned fund subsidized by insurers.