Auto Insurance

In the article you will find some basic information on Auto Insurance. Life’s events are often unpredictable. The most common unforeseen event which takes place all over the world, on a daily basis, is an accident. Accidents could be of various types- in some cases you could be responsible for one, in most others it is the second party who is to blame, at other times, your vehicle could be vandalized or you could be a victim of theft. Which is why they have what is called as an Auto Insurance?

Auto Insurance

It is simply a kind of cover against unforeseen circumstances, which could be accidental or physical, and depending on what kind of vehicle you drive. Having such insurance ensures that if it is the second party’s fault, that you are not made to bear the full brunt of it. Let us look at the main types of insurances. The first is called a Liability or Third Party Insurance. This is actually the most basic insurance you can find

where if you have an accident which is your fault, the company will pay for the damages.

However, the maximum amount that the company will pay is always fixed, with certain terms and conditions. It is important to understand fully what the clauses are especially because a low premium does not always mean the best cover. The second type is called a Comprehensive Insurance or Collision and Comprehensive Coverage. 

In this case, you get full coverage for your vehicle and if you are involved in an accident which is your fault then the company would pay for the repair of the vehicle. Here too, there will be a pre decided limit fixed. It is also important to know the market value of the car you own because if the company deems it fit, they would simple give you the market value of the vehicle you own; if repairs appear more costly. Taking cover from a company that offers impartial views on the market value of your vehicle is important. However, this kind of cover is mostly preferred as it covers you in the eventuality of theft, fire etc.

So, although a contract with an auto insurance company is bound to be full of clauses, why should one go for it at all? Here are a few reasons-

  1. The insurance pays for damages like body injuries and property damage to others if you are responsible. Medical expenses are covered and so is damaged property. Moreover, most state laws have a minimum amount for which an insurance is supposed to be taken out.
  2. A Personal Injury Protection pays you and passengers any medical treatment you might have to go for, if there is a crash and it doesn’t matter who is responsible for the accident. This kind of a coverage is called a no fault coverage.
  3. Even a collision with another vehicle is covered.
  4. Insurance also offers a comprehensive coverage where you are insured against natural elements like hailstones, wind, fire etc.
  5. There is also a coverage called an uninsured coverage where if the other driver is not insured, you would still be entitled to coverage of damage and medical expenses.
  6. It is also possible to get coverage for acts of vandalism and theft. Some dealers would also go the length of insuring any stolen goods in the vehicle.

Deciding on the right insurance is a decision which should be made only after a lot of thinking and research on the market. Ask your friends, neighbors as to which kind of insurance deal they have and look carefully at the real advantages.

Try to meet up with as many insurance dealers as possible.  Since this is a world where an insurance company wants you to have information at your fingertips, take advantage of the internet and make sure you compare the competition. More importantly, once you read up on the various services and premiums being offered, you would be in a better position to decide what kind of coverage you really need for your vehicle.

It is important to remember that any insurance deal offered to you is done so only after carefully assessing the value of your car, as it is the risk factor which is taken into account. At the same time, some dealers will also reduce the premium that you pay on a yearly basis if there have been no claims.  Nowadays, it is the comprehensive coverage which is much preferred by most people as it covers unforeseen circumstances beyond an accident. But remember that the premium would be just as high.

While deciding on your insurance dealer also make sure you are with somebody who can explain things clearly to you without any biasness. Having an auto insurance is a lifelong relationship with the dealer as long as you keep your vehicle.

At the same time, do not simply take his word for everything but make sure that you do your own study on the side like take your car to a person who will be able to tell you the proper market value for it. Understanding the state of your own finances is important when it comes to taking a deal. You would not be able to afford a high premium if there are other loans that you are paying or if your source of income is not steady. So, look at what is the minimum requirement by law that you are supposed to have.

Secondly, remember that if you are involved in an accident in your own vehicle and if you are paid for repairs to the body, then you would have to re assess the value of the car. A damaged vehicle would always be lower in value when compared to a brand new vehicle or one that has not been in any accident. So, speaking with your dealer and getting him to lower your premium in a case like that, would also work to your advantage. Overall, however, do not say no to take auto insurance. It is after all, money well spent.

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