Jasmine Directory

Insurance is the concept that a person, business or entity will pay a company each month for protection against certain accidents or disasters. Insurance does not stop these disasters from happening. Instead, if the accident does happen, the insurance company will pay a given amount of money to the insured entity. Many types of insurance exist, such as home or renters insurance, property insurance, health insurance and auto insurance.

Auto insurance is the insurance of a car, truck or other personal vehicle. Auto insurance ranges from the bare minimum coverage required by law to full coverage that will insure against nearly anything happening to a vehicle.

The way auto insurance works is that a person will purchase a vehicle. They will then approach an insurance company to ask about having their vehicle insured. The insurance company will run a profile of the person and the vehicle looking for demographic details. Such details include age, race, gender, driving experience, previous accidents and the amount of time likely to be spent driving, as well as vehicular concerns like previous damage to the vehicle, age, make and model.

Once all of this data is gathered, the insurance company is able to make a decision. They look at the likelihood that the driver is going to get into an accident, compared with decades of statistics gathered by governments and insurance companies. This decision determines whether offering insurance is profitable for the insurance company, and at what rate they would have to set the insurance to make a profit.

Once a driver is insured, they pay a fee each month to retain this insurance. Then, if nothing happens, the transaction is complete. If the driver is in a collision or something happens to their vehicle, they can file an insurance claim. The insurance company assesses the damage and the cause, and determines how much money to give to the insured in order to repair or replace their vehicle.