Car Insurance – Everything You Need To Know!

Introduction
When the vehicle is circulating on the road, any unforeseeable situation can cause serious damages to the driver and the property itself. In this case, car insurance works effectively. So, it is important to get the best car insurance that keeps you and your car from trouble. However, not everyone clearly understands the importance of car insurance.
We are here to help you take a closer look at it!

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1. What is Car Insurance?

Car insurance compensates for financial losses that result from car accidents. It is a contract between you and the insurer, in which the insurer commits you to compensate for the damages as set forth in the policy.

Car insurance supplies property, liability, and medical coverage. In particular, the property insurance covers damage or car theft. The liability insurance covers authorized responsibility for personal injuries or property damages. The medical insurance covers the cost of treatments, rehabilitation and funeral expenses.

2. Types of Car Insurance

Third Party

This is a minimum requirement. It covers compensation for other people (including passengers traveling with you) in the event of an accident or damage to another person's property. But it does not cover coverage for you.

Third Party, Fire, and Theft

This insurance is identical to the above. The only difference is that it includes your vehicle being burnt or stolen. That’s why it also costs you more.

Comprehensive

This insurance covers the same parts as above. Besides, it covers you in the event of an accident. Some car insurance companies also offer some benefits in comprehensive insurance, such as lending your car for repair, calling the rescue team for free, or repairing when the car breaks down on the road.

3. Types of Coverage

Collision

This insurance pays for damage to your vehicle in a car accident. When you purchase collision insurance, you will be asked how much "deductible" you want - this is the amount you have to pay in advance to repair any damage before the insurance company pays. Standardized payment is from $250, $500 to $1,000. The higher the payment, the lower the monthly premium.

Comprehensive

This insurance compensates your car for theft or damage for other reasons not caused by a crash - for example, natural disasters due to nature such as storms, floods, landslides, lightning strikes, and earthquakes.

Glass Coverage

This insurance is very popular for repairing or replacing windshields. Some glass insurance policies are not deductible for both side windows, rear windows as well as glass sunroofs.

4. How to Pay Car Insurance?

Premium

To purchase your own car policy, you need to pay a sum for the insurance company so-called a premium. The car insurance will be based on a lot of different factors to have a decision on your total premium amounts such as your car type, your age, and gender. If you make this payment regularly, your car insurance coverage will be effective. The terms may last six months or one year.

Deductible

The deductible is the cost that the customer must bear for every loss before the insurance company pays the remaining costs. The usual rule is that the higher deductible, the lower the premium, and vice versa. If you are a careful driver, why not set a high deductible to reduce the insurance premiums to pay monthly?

However, when it comes to buying car insurance, most customers don’t fully understand the deductible definition. For example, they don’t know how to choose the deductible level which will have a direct effect on the customer benefit.

Limits

For every type of coverage, its limit is different. These limits will be paid by the insurance company in case of a single accident, or claim. All the rest cost you will be responsible for.

Example: If the customer has his car liability coverage with a $100,000/$200,000 limit on bodily injury for one collision. So, your car insurance will not pay more than $100,000 for one person. It will not pay more than $200,000 for one collision.

Question: Do you pay for your agent or broker amount? You don’t need to pay for them, but the insurance companies will do. Hence, you will be responsible for paying for a broker’s amount.

5. What Can You Do If You Cannot Get a Car Insurance?

If your driving record is not good, you may have difficulty in finding an insurance company. In this case, you may be able to purchase it through a special government program that the insurer is required to sell insurance for high-risk drivers. You can also buy insurance through an insurer who sells insurance with a non-standard contract.

If you drive carefully but cannot afford a regular car insurance, you may qualify for special government programs in some states. For instance, in California, residents with low income will be bought very cheap car insurance.

6. Some Impacts on The Car Insurance Cost

Age

One of the highlights is age. Statistics show that young drivers are more likely to be involved in accidents, and those between the ages of 17 and 25 are likely to face the highest insurance costs. In fact, you will not do much to avoid this because you do not have enough experience to help insurance providers determine the level of risk when you drive.


Car Type

Even if you have decided to buy the car you want, choosing a smaller engine will lower your insurance costs. And this is really worth considering. The car price also affects a lot of premiums. The more expensive the car, the higher the cost of repairs or replacements, the higher the premium will be.

Note: If the car is equipped with some modern safety technologies including blind spot monitor, Adaptive Cruise Control (ACC) and Collision Avoidance (CA) system, this additional option will greatly reduce the cost of insurance.

Where to Live

Insurance companies know the crime hot spots or areas where accidents usually happen. The cost will also be affected by those facts.
Note: It is best not to park the car on the lap or curb at night to avoid unwanted damage. In addition, the car owner can be equipped with an alarm system or professional monitoring equipment to protect his/her car.

Experiences

Many insurance companies often apply the NCD (No Claim Discount) rule for a few years. Typically, this reduction applies up to 6 years for non-claimant car owners.

Km Numbers

The km numbers traveled is also a factor that directly affects the cost. Using more cars (the number of miles traveled) is more likely to cause accidents, the cost will increase accordingly.

The bottom line is to set the "standard" km in the insurance policy. If the number of km is high, the car owner has to pay more fees. However, if the number of miles exceeds the "standard", the insurance policy may be invalidated.

For the excess, this is the amount the car owner must pay in case of a claim. Accordingly, the insurance company will ask the car owners about the ability to pay the excess amount when receiving a quote. Choosing a higher excess amount means the monthly premium will be lower in most cases because the insurance company has reduced all risk payments to you.

Note: Be sure to pay for excess amounts. In fact, if the claim, in most cases, will cover both voluntary and compulsory insurance.

"Black Box" Technology in Car Insurance

A unit of insurance will provide tracking equipment to inspect and supervise the driving behavior so that the insurance premium is fair. This special "black box" technology will be very useful if the owner is a young driver or has made some complaints. Accordingly, the system will be connected to the car and use technology to record the location, the time of the drive, and evaluate speed, braking or cornering.

Of course, not all insurance companies use "black box" technology. Meanwhile, others may impose a curfew as a condition of the contract. This means that you cannot use the car at night.
On the whole, the price of car insurance will be based on those above factors. Car insurance rates can vary from one insurance company to another, so you should spend time on comparing the price in every car companies.

7. How to Buy Car Insurance

You have to get a copy of your driver's license and registration card, as well as all the insurance information you need. Specifically, the Vehicle Identification Number (VIN), home address, driver, and kilometers. Be honest to answer all the questions. Misinformation may result in the insurer refusing to pay you compensation.

Moreover, prepare to pay a minimum amount of insurer regulation to open the contract. Before you pay your contract, you should read it to understand what is compensated and what is not. If you do not have collision coverage, ask about uninsured motorist property damage coverage.

Question: Where do I buy car insurance?
You can purchase a car insurance through any of the following locations:
  • • An independent broker is the person who sells insurance to many different insurance companies.
  • • An insurance agent is the person who sells insurance only to the company they are hired.
  • • An insurance company sells insurance directly to the consumer via telephone or online.
  • • An independent website provides insurance quotes for insurance companies. (You can look on the "auto insurance quotes" to get very cheap car insurance quotes).
Note: Websites may not include all insurance company in the price comparison section.

8. Conclusion

Hopefully, this useful article will help you gain more knowledge with an overall and comprehensive view about car insurance. After all, bring joy and excitement on each journey to conquer all roads. Thank you for reading!


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