Meaning of Car Insurance

Car insurance is a type of insurance policy that provides insurance protection and indemnity against damage to our cars, physical injuries and as well as damage to third parties arising from car accidents. It is mandatory legal requirement in almost all countries of the world most especially the third party car insurance policy. In this article, we will discuss the guide to car insurance. We will further talk about meaning, the types of car insurance, factors to consider when buying car insurance policy, benefits and guides to save money on car insurance policy.

Types of Car Insurance

there are various types of car insurance policies and some of them include;

Liability insurance

This is the most basic type of car insurance policy and it is compulsory in most countries of the world. The policy provides insurance coverage to bodily or property damage to third parties arising from the policyholder.

Collision insurance

This is the type of car insurance that covers damages to the policyholder’s car resulting from a collision with objects. This type of insurance is mandatory like the liability insurance but it is however recommended.

Comprehensive insurance

As the name implies, this type of car insurance policy covers a wide range of risks. It covers damages to the policyholder’s car resulting from non-collision events, such as theft, natural and man-made events, fire, or vandalism etc.

Personal injury protection (PIP)

This is the car insurance that provides coverage to the policyholder’s medical expenses from injuries sustained during accidents. I further covers lost wages arising from an accident. This type of car insurance policy is also mandatory in some countries just like the liability car insurance.

Factors to Consider When buying a Car Insurance Policy

There are certain factors you need to consider when choosing a car insurance policy, some of these factors are;

Coverage limits: tis is the most important factor to consider and it entails the maximum amount of money that the insurance company will pay for damages/loss resulting from your accident.

Deductibles: this is the amount of money that the policyholder will have to pay out of his pocket before the insurance policy becomes effective or operative. Note that the higher your deductibles, the lower the premiums you pay on the policy.

Insurers reputation and financial stability: it is very important that you choose a reputable and reliable insurance company. This will also cover the level of financial stability of the insurance company.

Why Car Insurance is Important

there are several reasons why car insurance policy is important and some of them are;

You’ll pay less out of your pocket if you’re involved in an accident.
Car Insurance also helps you avoid the devaluation of your vehicle.
It also provides you with peace of mind to know that your policy protects you and your family against monetary losses. This is important because without car insurance to cover the costs of repairs in the event of accidents, it might be difficult to pay for repairs to your car as most of these events happen uninformed.
Car insurance also protects you against a lawsuit claims third parties make against you. It also covers legal costs.
Availability of a no-claim bonus (NCB) in which eligible customers can qualify for every no- claims year. The NCB may also be by way of discount on the premium, making buying car insurance policy more affordable.

How to Save Money on Car Insurance

This is another guide to car insurance. There are several ways you can save money on buying car insurance without compromising the level of coverage and some of them include;

Comparing quotes from different insurance companies to find out the one that offers the most cost-effective policy.
Secondly increasing your deductible amount can help lower the premiums payable on your car insurance policy.
Maintain a clean driving record and committing traffic offences and as well as avoid getting involved in accidents. This is because safe drivers usually attract lower car insurance premiums when compared to high-risk ones.
Lastly, bundling your car insurance policy with other insurance policies like home insurance may entitle you to a discount.

Conclusion

Car insurance is a very critical part of car ownership. Its benefits are enormous as have been discussed above. Do not also forget to put the factors we have also discussed above into consideration when buying car insurance policy and as well as other issues we have discussed in this article. We believe that these guide to car insurance will benefit you immensely,