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What to Know About a Car Insurance Company

Updated on October 29, 2019

Don't Drive Without Car Insurance

Don't Drive Without Car Insurance
Don't Drive Without Car Insurance | Source

Understanding the auto insurance industry

Auto insurance, also known as car insurance or motor insurance, is indemnity which consumers can purchase for motorized road vehicles such as trucks, vans, and cars. Delivered in the form of a legal policy, its chief purpose is to protect the consumer against loss or damage as a result of an accident. It can cover the registered policyholder, the insured vehicle, beneficiaries, third parties or all of them collectively.

Various rules and regulations stipulate the circumstances under which each insured party can be covered by the car insurance company. For instance, the policyholder can still be covered while on vacation, and a registered vehicle can also be protected against perils caused by theft, storms, fire, vandalism, hail and other disasters. Depending on the type of coverage purchased, the policyholder can also be spared from the cost of vehicle repairs and replacements after an accident, the need to purchase a brand new vehicle if it’s already declared “totaled” (totally damaged and unusable) and in some cases, legal liability from another person’s claim.

Ask for discounts, it could save you money.

Ask for discounts, it could save you money.
Ask for discounts, it could save you money. | Source

The auto insurance safety blanket

In many countries around the world, it is obligatory to purchase auto insurance. Accidents are part of life and they're expected to occur on a daily basis, regardless of how safe we try to be. Research shows that an automobile accident occurs every 5 seconds, a mild injury every 11 seconds and a fatal injury every 12 minutes. The statistics may be staggering, but compared to the road toll figures from 20 years ago, they have declined significantly. The crash fatality rate per 100 million automobile miles traveled has been the lowest, registering at only 1.46 and has remained below the 1.50 mark for years. Reports from government agencies also show a decline in the crash mortality rates. These considerable drops in rates seem to affirm the efficiency of safety measures and the fact that more and more cars now are more high tech than ever (some even have computer-aided features).

Although there are simple safety measures that can be done to avoid accidents, such as wearing your seat belt at all times, being attentive to the road, avoiding distractions, obeying traffic signs and driving the speed limit, nothing beats owning an auto insurance policy. Auto insurance acts as your safety blanket to cover you financially in case an accident occurs.

Work van coverage may be different than your other autos.

Work Van
Work Van | Source

Know what to look for in an auto insurance provider

Choosing the best car insurance can be quite a task, given the many available companies these days. It is, therefore, important to know where to look and what to look for. There are now two types of insurance companies: one that is purely web-based and another that continues to operate offline. Because many companies have either gone bankrupt or have had difficulties with processing claims, it is strongly advised to look for reputable ones that offer the right coverage at a good price.

Here are several basic qualities you need to look for in an insurance provider:

Valuation

How much the company will offer for the car in the event of a write-off or total damage.

Liability Coverage

For accidental bodily injury and property damage caused to others.

Collision

Damages caused by a crash.

Comprehensive Coverage & Medical Injury Coverage

Helps pay the medical bills for the injuries incurred either by the policyholder or the other party.

No-fault system

Covers damages up to a specific amount regardless of fault.

Uninsured or Under-insured Motorist Coverage

Helps protect the policyholder should the other party involved in the accident does not carry enough insurance or does not have insurance at all.

Several insurance companies also offer other services such as the following:

Replacements For A Total Loss or Write-offs

A new car is usually given.

Repair Benefits or Replacement Costs For Major Auto Parts

Addresses the problem of depreciation and partial losses.

Rental Income Lost

Ideal for proprietors of rental car businesses.

Towing And Storage of The Damaged Car

Protection against the market devaluation of the car.

This article is accurate and true to the best of the author’s knowledge. Content is for informational or entertainment purposes only and does not substitute for personal counsel or professional advice in business, financial, legal, or technical matters.

© 2019 Jason Nicolosi

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