How does the car insurance work?

 

Car insurance is a policy that covers the car against financial losses, which you may have to face during theft or accident of the car. You pay a premium for buying the insurance from the insurance companies and they agree to make a payment for the theft losses and the accidental damages. These days, it has become mandatory for the vehicles running on the roads to get covered under the car insurance policy. Car insurance is based on several factors such as the model and the brand of your car, your previous car insurance history, and the kind of driver you are. You may also get a comprehensive car policy depending on your need.

A comprehensive policy has various kinds of features such as the accident cover, liability cover, consumable cover, invoice cover, etc. Keep in mind that before you buy car insurance, you should select a deductible, an amount which you want to pay against the losses. This deductible decides the annual car premium that you pay for the car insurance. The premium is lower if the deductible is higher. When you buy a car policy, it is a vital step to choose the deductible because you pay it in situations that cover the damages. The cheap car insurance lowers the premium, but, may not give you the ideal coverage.

Tips for buying the best car insurance

There are normally two kinds of car insurance policies; a third party liability insurance and a comprehensive plan. Third party liability insurance is a mandatory plan for the car owners because it covers accidental death, property damages, and injury to any third party. A comprehensive plan covers the damage to the personal vehicles and also the third party obligations. It covers damages and theft caused due to events such as earthquake, fire, floods, cyclones, etc. Opting for a comprehensive plan is important if you want to remain secure and safe in all events.

Before choosing car insurance, get your vehicles inspected. Depending on the brand, age, model, and make, you can compare the car insurance plans online and then you can opt for the one that offers a lower premium. The claimless policies are the no claim bonus in the subsequent year, which means you need to pay a lower premium. So, do not claim small amounts for the accidental repairs. Keep the car as a single user. If the vehicles are driven by many people it may attract higher premiums.

Exclusions in car insurance

A car insurance policy gives protection against the financial losses, which you may incur in a theft or an accident. Even a cheap car insurance policy may not cover certain events such as the following:

  • Damage or loss after the expiry of the policy
  • Usual wear and tear of a car including its parts
  • Normal depreciation of the car
  • Mechanical or electrical breakdown
  • When a person driving is under the influence of liquor, drugs, or alcohol.
  • Engine damage because of oil leakage.
  • When the car faces any kind of mishap.
  • When the car is utilized for any purpose apart from its intended use.

 

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