AUTO OWNERS’ INSURANCE

A lot of people spend fortunes to acquire auto vehicles so as to make them proud owners of auto mobiles. The acquisition of these most times luxurious auto mobiles usually presents itself with some sort of unforeseen risks and challenges associated with accidents, fire outbreak, theft. In this article, we shall discuss auto owners’ insurance.

MEANING OF AUTO OWNERS’ INSURANCE

Auto owners’ insurance is a contract between an vehicle owner and the insurance company wherein the Latter undertakes to insure the Former against financial loss in the event of an accident or loss of his vehicle. In exchange for your paying a premium, the insurance company agrees to pay your losses as in the auto insurance policy.

In essence, auto insurance provides you coverage for damage to or theft of your vehicle, legal liability to others for bodily injury or property damage. And as well as the cost of treating injuries, rehabilitation and sometimes lost wages and funeral expenses are also covered. It also reimburses you when an accident is caused by a driver who does not have auto insurance—or in the case of a hit-and-run.

WHAT AUTO OWNERS’ INSURANCE COVERS AND THE CIRCUMSTANCES

Your auto owner insurance policy will cover you and other family members on your policy against risks. The policy may also provide coverage if someone who is not on your policy is driving your car with your consent.

Your personal auto owner’s insurance policy only covers personal driving, whether you’re commuting to work, running errands or taking a trip. It will not provide coverage if you use your vehicle for commercial purposes. It will not also provide coverage if you use your car to provide transportation to others through a ride-sharing service such as Uber. However, some auto insurers, however, are now offering supplemental insurance products (at additional cost) that extend coverage for vehicle owners providing ride-sharing services.

IS AUTO INSURANCEE COMPULSORY

Auto insurance is compulsory depending on the country of operation. In most countries of the world, the third party auto insurance plan is compulsory and the requirements vary from state to state.

TYPES OF AUTO OWNERS’ INSURANCE

Comprehensive Motor Insurance

Third Party Liability Motor Insurance

Collision Damage Motor Insurance

Comprehensive Motor Insurance

Just like the name implies, comprehensive auto insurance policy is the type of policy that provides all round insurance coverage. This is unlike the third party liability auto insurance policy that only affords coverage to third parties.

Comprehensive policy does not only provide coverage to third parties but also pays the expenses incurred in the repairing or replacing the policyholder’s vehicle in the event of an accident.

In addition to the above, comprehensive policy also provides a payment of indemnity in the event the policyholder’s vehicle sustains damage due to fire, man-made calamities, natural calamities, etc.

Similarly, the policy may also provide for total replacement in the event the policyholder’s vehicle is completely lost, damaged or stolen.

Third-Party Liability Motor Insurance

This is the basic type of auto insurance coverage.  The third party liability plan is compulsory in almost all countries of the world. Thus, it serves as the minimum mandatory auto owners’ insurance requirement for all vehicle owners. Premiums for these policies are usually low as a result of the low payouts.

Thus the third party auto insurance plans only pay the financial liability to the third-parties in the event of accidents or other eventualities. And this ensures that the vehicle owner do not face legal difficulties due to the accident.

Collision auto owners’ insurance coverage

Collision coverage is a type of auto insurance coverage that provides insurance cover by paying for the costs of fixing our vehicles in the events of accidents resulting from collision with objects such as telephone poles or any other objects or inanimate objects. And as well as damage from potholes. More so, it helps to reimburse the Policyholder for the costs of repairing the vehicle.

It is the type of auto insurance that pays the insured for the cost of repairing their personal vehicles as a result of no fault of their own or negligence. It is also a form of auto insurance that is usually bought by policyholders as an add-on to the main policy to protect drivers in the event of damage to their cars as a result of collision.

 The Benefits of auto owners’ Insurance

Auto accidents happen all the time, no matter where you drive.  If you cause auto accident, you might be responsible for any costs arising from it. This includes legal fees, medical expenses, and lost income. Without certain types of coverage, you would likely pay for these costs out of your pocket. Also, if your vehicle is damaged, the insurance covers the cost to either replace or repair it.

1. One important benefit of auto owners’ insurance is that you’ll pay less if you’re involved in an accident, especially a large one.
2. auto Insurance also helps you avoid the devaluation of your vehicle. Some policies help to prolong the value and life of your vehicle. You can’t avoid natural disasters such as a hailstorm from damaging your vehicle. But comprehensive insurance can lower the losses you incur and save you money in the long run.
3. It also gives you peace of mind to know that your policy protects your family against monetary losses. Without insurance to cover the costs, it might be difficult to pay for repairs to your vehicle.
4. Auto owners insurance also protects you against a lawsuit, even if you cause significant damage to someone’s property. The insurance safeguards you and helps you with claims that others make against you in accidents. It also covers legal costs.
5. Some insurance companies offer a no-claim bonus (NCB) in which eligible customers can qualify for every claim-free year. The NCB might be offered as a discount on the premium, making auto insurance more affordable.

Conclusion

The benefits of auto owners’ insurance far outweigh the demerits as you could end up paying thousands of dollars out-of-pocket for an accident you cause. It is therefore of immense benefit that you purchase your auto owner insurance policy on time. Also make sure to examine your policy closely to know exactly what type of coverage you have. And consider adding other policies if need be.