Auto Car Insurance
What is Motor insurance?
Motor insurance protects you against financial loss in-case you are in an accident. It is a contract between you and your chosen insurance company. You pay the insurance premium and in return the insurance company covers the losses that may occur in an accident, although it will only cover the costs for damages that are characterized in your car insurance policy.
Most notably people get there cars insured annually, but there are other time periods for car insurance. Such as day permits, monthly, quarterly or BI-annual insurance. The Insurance company that you are with will contact you shortly before your insurance is up, and inform the fee it will cost to renew your policy.
As a driver of an auto-mobile you are financially and legally responsible for your car and the damages that it may cause. It is because of this financial responsibility that we need a valid car insurance. In a case where the damages that have been caused by your car exceed the coverage of your insurance, you will have to pay the surpassed amount back to the insurance company until it is all paid back, which could mean the rest of your life.
Different types of Insurance
It is extremely useful to know what each area of car insurance coverage involves in some detail before actually purchasing anything, so you know yourself what is the most suitable coverage for you.
Bodily Injury Liability - This policy will pay the cost of bodily injuries or death from which you are responsible. It will also provide legal help if the other party in the incident decides to take you to court and sue. Bodily Injury Liability will cover things like medical bills, loss of income and things such as pain and suffering. Bodily Injury Liability covers injury to other people; not yourself, others on your policy and not your vehicle. In the event of a serious accident you will want to make sure you have enough coverage, in case it is taken to court, so you are not put into financial trouble.
Property Damage Liability - This insurance policy type pays for the damage that is caused to the property of other people, usually their car, from an accident caused by your vehicle. It will also provide legal coverage in case the other party decides to file a lawsuit against you because of the damages that were caused. It is a sensible idea to acquire the right amount of this insurance to cover the damage your vehicle might do. In the event of a serious accident you will want to make sure you have enough coverage, in case it is taken to court, so you are not put into financial trouble.
Physical Damage Coverage (Collision and Comprehensive) -
Collision Coverage: Pays for the repair or replacement of the policy owners vehicle, no matter who caused the accident. This type of coverage most often requires payment of a deductible (amount of a loss that an insurance policy holder has to pay out-of-pocket before reimbursement begins) when a claim is made, it also may be necessary to secure a new car loan.
Comprehensive Coverage: This type of insurance pays for all repair and replacement costs of the policy owners vehicle for all the damages that may occur not from an collision accident. This type of coverage most often requires payment of a deductible when a claim is made, it also may be necessary to secure a new car loan.
Uninsured and Underinsured Motorist Coverage -
Uninsured Property Damage: Protects your vehicle when property damage occurs by an insured driver and the negligent operator doesn't have any insurance themselves.
Underinsured Property Damage: Protects you when property damage occurs with an insured driver and the negligent operator possesses some insurance but not a sufficient amount to cover the cost of the damage caused.
Uninsured Bodily Injury: Protects you, your passengers, and the insured members of your household for bodily injuries, damages and even death that has been caused by an at-fault uninsured driver and even a hit-and-run driver. In the case where you are in an accident but it is the fault of the other driver, who has no insurance, then this policy will cover all the medical expenses, up to the amount of coverage that you have purchased.
Underinsured Bodily Injury: Protects you your passengers, and the insured members of your household for bodily injuries, damages and even death which has been caused by the negligence of a driver who doesn't have the sufficient insurance to cover the damage made (Underinsured). In the case where you have an accident with a person who doesn't have the sufficient coverage to conceal the damage that, that driver caused, then this policy will meet the difference-up of liability listed on your policy.
Third Party insurance - This is the minimum legal cover allowed and is comparatively cheap. It covers damage to the other person's car or compensation but if your own car is stolen, burnt out or damaged it is not covered. Third Party can be improved using add-on insurance such as Fire and Theft.
Third Party Fire and Theft - As well as the most basic level of car insurance (above) Third Party Fire and Theft insures your car against fire and theft. This option is the most popular car insurance for new and young drivers and will probably be the cheapest and most effective option until you are able to afford better.
Fully Comprehensive - This is the most expensive and covers everything - damage to your car, personal injury costs and any third party's vehicle and property. This is the best insurance you can get because it covers everything but it also the most expensive.
The individual automobile insurance policies will inform you with the sections on which your automobile is covered.
Go to:
How to choose the right policy
17 Handy Tips when choosing your insurance
Situations that may
affect the Cost of your insurance