Every car owner is obliged by law to have car insurance. While you may have attended the best driving school and remain a vigilant driver, you collide with a motorist when you least expect. When an accident happens, there may be injuries and damages. The injuries may be to the other motorists, passengers, or yourself.
A car auto insurance agency can provide coverage information to protect you while on the road.
Why is Car Insurance Necessary?
Car insurance protects a car owner from a financial crisis when an accident happens. It also caters to medical bills for treatment given after an accident. Every roadworthy car should have basic insurance coverage, such as party insurance, at the bare minimum.
Car insurance is a requirement even for a rarely on the road vehicle. Driving without car insurance can attract a penalty, such as a fine or a loss of six points from your driving license. In the extreme scenario, one can lose their driving license or confiscate the car.
Types of Car Insurance
There are three basic levels of car insurance coverage:
- Comprehensive car insurance
- Third-party insurance
- Third-party for theft and fire insurance
1. Comprehensive Car Insurance
Comprehensive car insurance is a complete package of coverage. It is the highest type of car insurance because it covers your injuries, car damages, and others involved in the accident. Other parties could be the other motorist, car damages, and passengers.
It caters to medical treatment, legal charges, and accidental damages caused by an accident. It allows you to claim:
- Car repairs after an accident
- Accidental damage, e.g., a neighboring household fence
- Vandalism, e.g., if someone accidentally scratches your car
A full comprehensive cover allows you to drive another motorist’s car if they allow you. However, the coverage gives you no more than a third-party cover. Therefore, you are not under any cover if you damage the car. You also need to understand the policy details carefully because they differ from one provider to another.
2. Third Party
This is the least car insurance cover any motorist can have. It caters to injury or damage expenses you cause to the third party. However, it doesn’t protect your injuries or damages to your car.
It is suitable for people who cannot afford a comprehensive cover. However, it doesn’t mean that it’s the cheapest coverage. It is also applicable when:
- A motorist doesn’t have a no-claim bonus
- The motorist lives in a high-risk locality and is vulnerable to other risks
- The car is very cheap, and the motorist can afford to buy another vehicle in case of an accident
3. Third-Party Fire and Theft
Third-party car insurance covers the other motorist’s injuries and damages but leaves you out. The difference is that it covers repairs and replacements when your car is damaged by fire or stolen.
It’s affordable but not necessarily cheap than comprehensive coverage. Therefore, compare prices before purchasing third-party, fire and theft insurance coverage.
Tips to help Motorists Lower the risk and Keep Costs Down
A car owner can substantially influence the cost of the insurance cover they need. Here are some tips you can use:
1. Make your Car Secure
Car insurance providers demand that a vehicle has a tracking system to enhance its security. A tracking system reduces the chances of someone stealing the car. Consequently, it reduces the insurance cost.
2. Buy your Car from a Low-Cost Insurance Group
A car’s model and make is allocated to a particular insurance class. Insurance company classes are determined by cost, performance, safety and security features, and how long it takes before its first repair. The lower the grouping of your car, the lower the premium you’re required to pay.
3. Get your Mileage Right
It would be best to be as accurate as possible with your car’s mileage; the lower your annual mileage, the lower the premium you’re required to pay.
However, do not underestimate your car’s mileage because the rule doesn’t always apply. Underestimating your mileage can invalidate your car insurance coverage when you need to make a claim.
4. Drive Safely
Clean driving history can earn you good car insurance coverage. Some insurance providers can discount for an advanced driving course or a clean driving record.
5. Add a Second Driver
You can add a low-risk driver to your insurance. The second low-risk driver may rarely use the car, but adding them to your insurance can reduce the premium cost. A low-risk driver can be anyone above 70 years.
On the other hand, a high-risk driver, such as a teenager, can increase the premium value. Be warned never to break the law and invalidate your claims by pretending your second driver is the main motorist. Acting in a pretentious arrangement can make you lose an insurance claim.
6. Pay your Insurance Annually
Some insurance providers charge an extra amount when premiums are paid monthly. However, paying an annual premium attracts a discount, therefore, lowering the cost of your insurance.
7. Only Pay for what you Need
It would help to check what cover you have under every financial package. At times, an insurance provider may try selling add-ons making the policy costly. Consider getting the identical product from another provider who doesn’t charge extra fees.
8. Increase No-Claims Bonus
A motorist earns a no-claim bonus every year one drives without claiming for their insurance. If you need to change your insurer, remember to carry over the no-claim bonus. Additionally, if you haven’t placed a claim for at least five years, it may be worth paying one extra premium. Claiming an additional compensation protects your no-claim bonus accumulated over the years.
Conclusion
Car insurance is a cover that protects you in case of an accident. It also protects the other motorist and other damages caused by accident. You can also buy coverage for theft and fire. It is critical to determine your need before purchasing car insurance. Shop around and compare quotes and settle for coverage that gives you value for your money.
