The importance of insurance comes with the motto " Protect yourself and others". It is undeniable that in the times of any unfortunate situations the stress of dealing with emotional stress and financial issues having insurance provides the financial security to deal with the situation with peace of mind.
There are a variety of insurance policies
aiming to protect certain features like health, home, motor, travel, property
and so on. These insurance policies help in the case of an emergency situation
which can leave the person debt-ridden. Thus the importance of insurance is
inevitable. Among the insurance policies, Motor Insurance which deals with the
vehicles is essential to have by the vehicle owners. In many countries it is
important to have basic motor insurance for the vehicles.
When a car (motor) is bought, there comes the
responsibility and risk about the safety of the vehicle, its owner and the
other third party. Every single vehicle running on the road carries the risk of
incurring legal liability to pay the third party for death, bodily injury,
property damage with the loss of accidental damage to the vehicle itself. Thus
whether in a collision the fault is of yours or another, the insurance policy
helps you overcome it by helping financially. Here is the guide to explain all
about Car Insurance.
To avail the benefits of car insurance you
have to pay a premium. Basically the premium of car insurance is valid for one
year, the buyer has to make renewal of policy each year to keep it active.
Under every type of car insurance, there are terms and conditions of the policy
which helps in the financial crisis arising due to any unfortunate accidents or
mishap. There are also several add-ons available to further enhance the
protection of your vehicle.
TYPES
OF CAR INSURANCE:
Insurance coverage refers to the kind of
protection available in case of unforeseen incidents. Along with the basic
coverage there are multiple add-ons available in car insurance to enhance the
protection by the insurance policies. Here are the types of car insurance.
1. Third Party Liability Only Cover:
Under this type of car insurance, the owner gets the benefits of:
a. Cost of repairs of the damaged vehicle of
third parties.
b. Cost of hospitalization and treatment of
third parties.
c. Liabilities arising due to death of third
parties.
Third-party car insurance coverage is a must
coverage for the vehicles on the road. The amount for the coverage should be
high to avoid payment from your side during settling the issue. Liability coverage
covers both physical as well as property damage done. It can protect you
financially from lawsuits coming out from the accident. It could lead to
cancellation of your license or huge fine.
2. Collision Damage: In this insurance
coverage the cost of repairs of a vehicle that has been damaged is reimbursed.
For the cost of repair, cars age and insured declared value are taken into
account to arrive at the premium. The IDV is based on the market value of the
vehicle. The maximum amount payable under the policy is calculated by the IDV
less depreciation. If you have purchased your vehicle on a loan you should hold
collision cover.
3. Personal Accident Cover: In this
insurance coverage, the vehicle owner-driver protects himself by opting
reimbursement of medical expenses after an accident. This coverage acts as a
shield for the family.
4. Comprehensive Car Insurance: In this
insurance coverage, the highest level of protection is provided as it includes
liability for third parties damage, to the own vehicle, personal accident cover
and all non-collision damage such as storms,flood fire and theft. It is an
extensive policy type. The owner gets the total market value in case the
vehicle is stolen, damaged by natural accident or damaged beyond repairing.
FACTORS
DETERMINING THE PREMIUM OF CAR INSURANCE:
In order to prevent overpaying while buying
the insurance policies, there are certain factors which must be looked at while
buying. This helps ensure the buyer that he is paying for the policies he
actually needs. Here are the factors which determine the premium of the car
insurance.
- IDV- Insured Declared Value is the maximum insured amount which is
paid by the insurance company. It is almost equal to the market value of
the car, hence not constant in nature.
- Age of the vehicle: Each year the value of vehicle depreciates
with the launch of new models with extensive features in them.
- Car Engine’s cubic capacity: The car’s engine size determines the
premium amount.
- Registration
Number: The cost of premium also depends on the city of the registration
of the vehicle.
It's important to choose a good insurance
policy. The different types of policies have different features and that is why
it is important to research before making a final purchase. Here are the tips
which will help you find the best car insurance for you.
- Select the correct form of insurance cover seeing it cover all the
basic requirements that a car insurance must have.
- The insurance policies can be compared online which can help you
in deciding what’s best for you. The insurance companies also provide
discounts from time to time.
- Make sure the IDV is calculated properly so that it can cover
basic requirements of yours.
- Analyze the claim process properly. Merely purchasing the
insurance is not enough to make sure that the claim process is handy and
it delivers to you when you need it the most.
- Choose a
good insurer for your vehicle. Check if the insurer has good claim
settling reviews and has active customer support features.
Thus buying car insurance is essential for you
and your family's safety. Be a smart buyer and select the plan which completely
suits your needs and provides basic coverage for your safety. Renewing it and
keeping the policy active by paying premium remains equally important. It is
equally important as buying a new cover. Make sure to read the policy’s terms
and conditions thoroughly before purchasing the policy.
