Car insurance is mandatory in almost all countries, as long as the modality required by the State is the basic modality.
This basic modality covers the civil liability of the owner and driver of the vehicle when causing damage to third parties. However, the insurance may include extended modalities, where the risks that are covered include the risk of an accident without damage to third parties, as well as another series of voluntary supplements that expand the range of coverage that the insurance has.
Depending on the country to which we refer, this obligation that we mentioned may or may not be so.
Types of car insurance
Among the types of car insurance, it should be noted that there are many types. That is, within the car insurance that is offered, there are many types.
These types vary depending on the coverage they offer, as well as the risks they cover.
Therefore, among the types of car insurance that exist, the following should be highlighted:
- Third-party insurance: It is the most basic. It is limited to cover civil liability. It is the one that requires the State.
- Extended third-party insurance: It is insurance like the previous one, but with some added advantages. In this sense, coverage such as glass, the crane in case of breakdown, among other things.
- All risk: This is the broadest of all. The coverage is responsible for ensuring that all damage to the vehicle is covered; including theft.
- With excess: It is insurance similar to all risk. However, this insurance implements additional payments for the provision of certain services in the repair of the car.
car insurance coverage
As we said, car insurance does not have modalities, but rather they are based on coverage. In other words, the modalities that are established are set based on the coverage that said modality offers.
Therefore, based on whether the insurance offers greater coverage or not, the cost of the insurance (the premium) will be higher or lower.
Depending on the coverage, we can highlight that there are three main types of coverage:
- Liability coverage: This only focuses on third-party damage coverage.
- Limited coverage: This covers all of the above, adding some situations such as theft of the vehicle or the front glass in the event of possible breakage.
- Extended coverage: It is the most extensive coverage. It covers almost everything that happens to the vehicle, regardless of whether the accident was caused by third parties or by the driver.
The Insurance Compensation Consortium
The Insurance Compensation Consortium is an institution belonging to the Government of Spain. This institution is created to cover all those disasters that are caused by a natural disaster or the poor condition of the road. Or, on the other hand, an accident with a person who does not have insurance and who must cover the damage.
The Insurance Compensation Consortium is financed with a percentage that it receives from all insurance carried out in the country. All of them must pay, directly, a small percentage to said institution. All this too, later, has resources when it comes to having to cover damages from situations such as those mentioned above.