The Importance Of Choosing The Right Auto Insurance

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Auto insurance is a policy purchased by vehicle owners to mitigate costs associated with getting into an auto accident. Instead of paying out of pocket for auto accidents, people pay annual premiums to an auto insurance company; the company then pays all or most of the costs associated with an auto accident or other vehicle damage.

auto insurance

Why is Auto Insurance Necessary?

● You are protecting your automobile, one of the largest investments you make in your life.
● You are able to pay for medical bills if an accident occurs.
● You don’t have to feel the biggest part of an accident-related lawsuit.
● Protects assets that you’ve worked hard for from being lost due to a lawsuit.
● Protects you from those motorists that may not have insurance of their own.
● Not only pays for accidents and weather-related incidents but also pays for vandalism and theft.
● You know you are protected every single time you hit the road.

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A World Without Auto Insurance

Just imagine what a world without auto insurance would be like. First of all, people who are at fault in accidents would be paying money to the accident victims out of their wages and other income for years to come. Those who have been injured in an accident at no fault of their own are entitled to have their medical bills, vehicle repairs, and other expenses paid by the insurance of the person who was at fault. If the person at fault does not have insurance, then they do have to pay those expenses out of their pocket.

auto insurance

Then there are those natural disasters that we have absolutely no control over. There have been many overturned trees from high winds that have decided to fall the direction of someone’s brand new car. There have also been the occasional hail storms throwing golf ball-sized hail out of the sky at the many automobiles below. This can cause thousands of dollars in damage that goes beyond the scope of what most individuals can afford straight out of their pocket.

Types Of Auto Insurance

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Third-party Liability Insurance – This type of insurance policy is mandated by law for all vehicles plying on the roads. This insurance provides protection to third-party for damages to property or injuries to the individual, where the policyholder is accountable for the accident. Third-party liability insurance only covers minimal risks, and it does not protect the policyholder for damage or theft of the insured vehicle, or injuries that he suffers.

Comprehensive Insurance – This type of insurance policy covers third-party liability, and the expenses incurred by the policyholder in the event of damage or theft of the insured vehicle. The policyholder also benefits from a personal accident cover that offers compensation if he is injured or faces death in an accident.
Add-on Covers – Some of the add-on insurance covers that supplement a comprehensive insurance plan are as follows:
Zero Depreciation Cover – This is one of the most popular add-on covers in motor insurance. This policy ensures that the policyholder receives the full claim amount on the value of replaced parts, following an accident. However, this cover is available only for vehicles that are less than three years old.

auto insurance
Roadside Assistance Cover – In the event of an emergency such as a flat tire, battery issues, or an empty fuel tank, this cover provides you assistance even if you are stranded at a remote location. Policyholders can benefit from services like fuel assistance, battery recharge, taxi, or even accommodation assistance.
Engine and Electronic Circuit Cover – This insurance covers expenses incurred when there is damage to the insured vehicle’s engine or electronic circuits.
NCB Protection Cover – The No Claim Bonus is a reward given to a policyholder for not making any claims during the policy term. The NCB can amount to a significant reduction in premium for the following year. However, when the policyholder makes a claim in the subsequent years, he stands to lose the accrued NCB.

Based on the Purpose of Use

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● Vehicles can be used for private or commercial purposes and the type of insurance that the owner purchases depends on the intended use of the vehicle.

● Private Motor Insurance – This type of insurance policy is purchased by owners of two-wheelers who intend to use the vehicle for private purposes
● Commercial Motor Insurance – This is an insurance policy that prevents a business from suffering financial loss from damages to the commercial vehicle. It offers third-party liability protection and accident cover for the driver of the vehicle.

Why Should People Buy Auto-insurance

auto insurance

TO HELP PROTECT YOUR FINANCES
If you cause a car accident, you may be held responsible for costs associated with it. These may include legal fees, the injured person’s medical expenses or their lost income compensation. Liability coverage may help pay for these costs. Without liability coverage (or adequate liability limits), you would likely have to pay these costs out of your own pocket.

TO SATISFY LOAN OR LEASE REQUIREMENTS
If you’re financing or leasing your vehicle, your lender may require you to purchase comprehensive coverage. Since the lender or leasing agent is the lien holder of your vehicle while you’re making payments, these two coverages may help protect their investment. Comprehensive or collision coverage may help pay to repair or replace the vehicle if it’s damaged in a covered loss

TO HELP PROTECT YOUR VEHICLE
Even if you own your vehicle outright, you may want to keep collision coverage and comprehensive coverage on your car insurance policy. What if your car is damaged in a hail storm? Comprehensive coverage may help pay for repairs or replacement if your car is stolen or damaged by something other than a collision, such as falling objects or fire.

auto insurance

TO HELP PROTECT YOUR PASSENGERS
And it also may help cover your passengers’ expenses due to the accident. Coverage may help pay for hospital visits, doctor bills and surgery.

TO HELP PROTECT YOURSELF
Even though liability coverage is a legal requirement, many people drive without it. Uninsured motorist coverage may help pay for your medical bills if you’re hit by a driver without insurance. This coverage is required in some states and optional in others.

Having the proper car insurance coverage in place can go beyond fulfilling a legal requirement. An Auto insurance policy may help protect your vehicle, your wallet and even offer peace of mind.


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