Car insurance is a form of insurance specifically designed for automobiles, trucks, and other automobiles. Its main function is to give financial cover against physical damage or personal injury resulting from car accidents and against liability which may also arise from incidents inside a car. Car insurance provides safety coverage. It serves as an umbrella policy that protects a car owner from the financial losses resulting from accidents.
In some cases, insurance has become mandatory. One example of this is the requirement in the United Kingdom to have car insurance if one wishes to rent a car or a vehicle owned by an organization. Under this policy, the insured pays a daily or weekly premium that covers him/her from financial liabilities in case of accident. There are a lot of policies available that cover such necessities like rental reimbursement, medical expenses, etc. Many insurance companies offer insurance to cover these essentials.
A car insurance policy can have different types of coverage, depending on the kind of insurance you opt to buy. Full coverage insurance policies cover all covered losses. Liability coverage, however, only covers financial claims like injury or death caused by the insured.
There are four individual factors that affect the cost of insurance. These include the type of car to be insured, the age of the driver, his/her gender, and his driving history. The first and third factors, the age of the driver and the gender, affect the premiums more than the other two. This is because young male drivers have higher chances of getting involved in accidents than female drivers do. Insurance companies consider this factor when setting the premium rate for the insurance.
For those who have driven little, they are advised to get liability insurance. Liability insurance is not mandatory in most states, but it is recommended for every driver. It covers damages or injuries incurred by the driver or the other passengers in the car caused by the negligent act or behavior of the driver. Liability insurance rates differ from company to company.
If a driver has a clean driving record, he will be able to get lower rates on his premiums. A gap in coverage means that one has not held a car insurance policy for a certain span of time. This means that the insurer is assuming the risk of a driver not having any car insurance coverage. For example, if a driver takes a gap year off his driving records, the insurance company assumes he will not get involved in any car accident during the year and therefore, he will not need to have liability coverage. On the other hand, a driver who has a gap will be charged higher premiums.
Another factor that affects rates is the level of coverage. Full collision coverage is the most expensive. In some states, a driver can choose between collision coverage and comprehensive coverage. Comprehensive coverage provides coverage for damage due to fire, theft, weather, vandalism, malicious vandalism, and hit and run accidents.
A deductible is the amount of money that the insured has to pay in the event of an accident. Deductible can either be paid upfront or it can be a percentage of the accident cost. Most auto insurance companies offer the standard discount if the deductible is $500 or less.
Bodily Injury liability coverage, or bodily injury, is very common. This type of policy pays medical expenses and other bills caused by accidents. It also covers rehabilitation and loss of earnings for workers who are injured on the job. This policy will not cover liability for property damage.
Liability coverage will not pay for damages to your own car. It will cover claims of bodily injuries and property damage caused by an accident. If you cause a wreck, even if it is your fault, you will have to pay for the repairs yourself. Some states require a “no fault” policy to be carried. Under this type of policy, the insured will not be required to pay for damages resulting from an accident that he or she causes himself or herself.
No matter what state you live in, your rates are going to be higher if you carry no fault coverage. This is true even if you do have a good record of never filing a single claim. The reason for this is that these policies cost more because they include more liability. They also cost more because they cover more incidents. However, these policies do provide excellent protection in the event you are involved in a major accident that isn’t your fault. It’s always better to have comprehensive coverage than to be without it.
