Get to know auto insurance
Vehicle insurance (also known as auto insurance, car insurance, or motor insurance) is insurance purchased for cars, trucks, and other vehicles. Its primary use is to provide protection against losses incurred as a result of traffic accidents and against liability that could be incurred in an accident.
Motor vehicle insurance policies are available to every Motor vehicle owner to protect their Motor vehicles and other motor vehicles, general public (passengers) and other public property in an event of an accident. Based on global civil rules it is compulsory to maintain at least a third party Motor vehicle policy.
Types of auto insurance
- Comprehensive Insurance Policy
- Third Party Cover
Comprehensive Insurance policy
This insurance policy provides compensation in an event of an accident to the considering Motor vehicle, other Motor vehicle as well as the public. Further natural disasters, violent and terrorism covers are also available at an additional premium. Additionally life insurance policies also can be attached to this same policy as a dual insurance policy serving the same purpose.
Third party cover (Minimum legal cover)
Every motor vehicle owner should obtain at least this Insurance policy where it provides compensation to other motor vehicle damages as well as the general public or to damage to public property.
What factors would affect the premium of an auto insurance policy?
- The type of motor vehicle policy that has been selected accordance to the choice of the policy owner.
- Additional covers that have been obtained.
- Market value of the motor vehicle which is covered with the insurance policy.
- The manufactured year and the model of the covered automobile.
- Entitlements for no claim bonuses.
No claim bonus
It means a specific reduction that the insurer makes from the insurance premium of motor vehicle policy if no accidents and no claim were made during a specific year. Therefore this method encourages motor vehicle owners to minimize accidents and to minimize claim requests.
Strategies to be followed to minimize auto insurance premium
Obtaining or asking for a no claim bonus.
Signing an agreement related to minimum claim restrictions
Obtaining a membership from better insurance companies with discounted and additional bonus packages.