Every car on the road must be insured. In almost all countries around the globe, it is illegal to own or drive a car that is not insured. It’s an offence that carries heavy penalties or the vehicle itself can be impounded by the authorities.
The only time that the law allows you to own a car without insurance is when the car is a non-runner, though the law requires that a written formal declaration be made to the relevant authorities advising them of the car’s status.
What Determines the Cost?
In this high-tech age, it is very easy to find the right type of car insurance. Simply inquire online from the various insurance companies to get quotations and the packages they offer. The best place to do so is on MoneyExpert. Here you can find cheaper insurance policies for your car.
Each and every car insurance policy is different and unique even for cars of exactly the same make and age. The factors which determine the cost or price of premiums for a particular class of policy are many and varied. It is therefore wise to seek expert advice before coming to a final decision.
Car insurance, like all other types, is meant to cover the owner against financial losses. It is important to know that the insurance company only pays out if the accident was caused by you. Otherwise the other party’s insurance company pays. If you submit a claim your annual premiums will usually go up.
Determining car value
In those instances where a car is completely wrecked in an accident the insurance company pays out what it considers to be the retail or market value of the car, not the replacement value which is usually higher. They do this because it is usually more costly and time consuming to repair badly damaged vehicles than to simply pay out its retail value. There are many value appraisal companies that insurance companies can contract to arrive at a retail or market value acceptable to both parties.
As mentioned above, you can easily obtain a quote online. In fact nowadays the whole process up to and including the actual buying process of the car insurance can be done online whilst in the comfort of your home. Before actually buying, it is important to know the answers to such questions as the make/model as well as the age of your car, annual mileage, where you live and the use of the car.
Insurance companies routinely inquire about your driving habits and history, whether you have had an accident before as well as whether you drink alcohol. Affirmative answers to these last two questions will normally result in the cost of your premiums going up. Premiums for younger drivers are generally higher than for older people who are considered safer drivers.
Car insurance coverage typically pays out for losses incurred due to and arising from the following incidents:
- Theft of the car
- Fire
- Vandalism
- Physical accidental damage.
The main types of car insurance are explained below.
1.Comprehensive Cover
As the name suggests this type covers everything: the owner or authorized driver, the car itself and any persons who are passengers during the accident. It also caters for vandalism and theft. Although premiums are comparatively higher, the majority of car owners prefer it because it provides you with full protection.
2. Third Party Fire and Theft
It covers third parties when you are involved in a car accident. It also covers losses incurred when the car is stolen or in some cases, damage caused or as a result of fire. However it does not cover own damage caused to the car in the event of an accident. It therefore usually costs much less.
3. Third Party Only
Compared to the other two types of insurance, it is the most basic type of vehicle insurance. It covers injury to third parties and damage to their property only.
