Understanding Automobile Insurance

It was a beautiful day. Joe was driving his brand new car on the highway. The engine was purring smoothly. The suspension was the state-of-the-art. He put pressure on the car pedal and accelerated. He could feel the rush of wind on his face. The scenery was zipping past like a rocket. Truly the feeling was exhilarating. Suddenly a tire burst and the car swerved dangerously. The car dashed against the mountainside adjoining the highway. The high velocity impact caused it to be a mangled mess. Fortunately, Joe escaped unscathed. He wasn't ruffled by the damage to the car because it was completely insured.

What Can an Automobile Be Insured Against?

• Loss or damage by housebreaking or theft, accident, malicious act, lightning, fire, self-ignition and explosion by collision.
• Loss or damage while in transit, by air, road, rail and elevator.
• Loss or damage by cyclone, inundation, terrorism, earthquake, flood, riots and strikes.
• Liability to paid driver and liability for third-party property, injury and death.
• Underinsured or uninsured motorist coverage. This pays expenses when the other party in the accident has insufficient or no insurance.
• Rental reimbursement pays expenses for loss or damage while driving a rented automobile.

What Will an Insurance Not Pay For?

• Loss or damage due to war, nuclear accident and drunken driving.
• Loss or damage when the vehicle is used outside the geographical area specified, or driven by an unlicensed driver.
• Loss or damage due to wear and tear, mechanical/electrical breakdown and depreciation.

What is Third Party Insurance?

• Liability to employees involved with the operation of the automobile. One is insured against death or injury caused by one's automobile to the automobile's cleaners, conductors and drivers.
• Liability for injury or death to the third-party. One is insured against death or injury caused by one's automobile to the occupants of other vehicles, passengers and pedestrians.

What is Comprehensive insurance?

• It covers loss or damage to the automobile caused by transit by air, road, rail and elevator, terrorism, malicious act, cyclone, flood, hurricane, storm, earthquake, strikes and riots, burglary, fire, explosion, lightning, self-ignition or an accident.
• It does not cover any loss or damage due to drunken driving or if the driver does not have a valid driving license. It also does not cover loss or injury due to mechanical/electrical breakdown and wear and tear.

Factors Affecting the Cost of Automobile Insurance

• The type of the automobile.
• The age of the automobile.
• The age of the driver.
• The place where you park your automobile.
• The distance covered by the automobile every year.
• The driving history of the driver (this includes accidents and traffic tickets).
• Surprisingly, gender may also matter in certain countries.

A Few Tips to Remember

• Do not take the cheapest policy. Make sure everything pertinent to you is covered.
• It is important to have sufficient insurance anticipating a serious accident.
• Rules can vary from country to country and even state to state. Make sure you have done your research.
• Check the reputation of the insurance company. Make sure it doesn't delay the claim process or put difficult demands for getting the claim sum.
• Get an agent to help you out. Doing things on your own may be tough.
• Make sure you pay your premiums on time. If the deadline has expired you will not be eligible for the insurance.
• You could install anti-burglary equipment on your automobile to make it less susceptible to theft.
• If you insure with the same insurer always, you could get a discount on the premium.
• Understand the terms and conditions of the policy thoroughly before purchasing the insurance.
• Choose your automobile wisely. The size and type of automobile affects the insurance premium.
• If you use public transport or car-pooling, you will reduce the usage of your automobile, which will bring down the insurance premium.
• These days it is convenient and safe to use online insurance. It is no longer the complex and stressful chore of yesterday.
• You can cover towing of the automobile if it is immobilized in the insurance as well.

Make sure you have an automobile insurance policy, which is tailor-made to your needs, and the premium is not a burden to your pocket. Do take the relevant policy and drive with a sense of security and a stress-free mind. Carelessness regarding insurance may cost you dearly.