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Know About Auto Insurance

Auto insurance is also known as vehicle or car or motor insurance. Auto insurance is very important as it saves owner from high costs involved in repairing vehicle (own), other property, or other driver's vehicle.

Author: Jameson Parker
Date: Feb 1, 2010 - 3:43:33 AM

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Auto insurance is also known as vehicle or car or motor insurance. Auto insurance is very important as it saves owner from high costs involved in repairing vehicle (own), other property, or other driver's vehicle. As auto insurance has many noticeable benefits, many countries made it mandatory by the law. The insured person needs to pay an amount to insurance company, which is known as 'deductible' before their policy begins.

There are two categories of auto insurance:
•    Full coverage auto insurance: This insurance protects (pays the damage costs) of insured car, owner's car, and any other car damaged at the time of accident.
•    Third party auto insurance: It is also known as liability insurance. This insurance protects only another party's property at the time of accident (not the insured car owner).

Factors that affect the price of auto insurance:
Before buying automobile insurance, different factors like vehicle type, driving record, and amount of money to be paid towards charge of insurance are taken into consideration. Before selecting vehicle insurance a person need to know about the existing laws in the state.   
•    Type of vehicle (car): If the type of vehicle has more theft rate then the coverage (price of insurance) will be more.
•    Area: If the area, where a person is living has high occurrence of accidents or vandalism (mischief), then the price of insurance is more.
•    Use of car: If car is used regularly or traveling to work for long distances then the price of insurance is more.
•    Age, sex and marital status and driving record: Young people (25 years) need to pay more price for insurance as they are more prone to accidents. Persons (drivers) who have records of doing accidents or violation of traffic rules need to pay more for insurance.

Different types of auto insurance are:
•    Collision insurance: This insurance protects the insured person, when accident occurs due to overturning or hitting other vehicle or object.
•    Bodily injury: This insurance provides protection, if person who insured his or her vehicle kills someone while driving.
•    Comprehensive coverage: This insurance provides protection when the vehicle has physical damage caused due to non-collision or theft or fire or vandalism.  
•    Medical payments (no fault): This insurance pays medical expenses of injured driver and passengers at the time of accident.
•    Uninsured motorist coverage: This insurance protects insured person and passengers, when accident is caused by other motorist who is not insured (legally).

Vehicle insurance is considered as best solution to recover heavy loss incurred at the time of accident. However, Insurance companies do not insure 100% value of vehicle and only insures 80% value of the vehicle. They do so to prevent fake losses of car (owner no longer wants to use car and claim that he had lost the car to claim for whole money of vehicle). So, before purchasing vehicle insurance know all the types of coverages and choose the deductible amount that you can pay, and then select the insurance coverage that is very much suitable for your vehicle.


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