What are the different types of car insurance?

Not all cars are meant to stick with for the long haul. Sometimes a vehicle can be only temporary, and you don’t need a long-term auto insurance policy. However, if you’re buying auto insurance for the first time, it will be an overwhelming experience.

There are many insurance services offering “n” number of products. Yet, you should invest a considerable amount of time to ensure you choose the best policy to cover your driving condition-specific, vehicle-specific and third-party-specific needs in a very efficient manner. In time, the insurance coverage increases, and so does the premium one. Hence, knowing the different types of auto insurance is an important step in getting the policy that’s fit for your needs. 

Read on to learn more about the basic car insurance types, what they cover and more importantly, how they work. 

Liability coverage 

If you’re involved in an accident, and it’s concluded that the accident took place before your negligence/fault, then the liability policy should come to your rescue. 

These are some of the benefits you will receive through a liability insurance plan: 

  • Repair/ replacement coverage for the damaged property (or third-party) 
  • Medical bills coverage for the third party due to medical treatment or hospitalization  
  • Car owners should buy minimum liability insurance because the insurance policy and the legal obligation will cover the same. 
  • You should opt for the liability insurance premium, which is higher than the mandatory requirement as per the law because the policy will do the higher risk coverage, and you can decrease your out-of-pocket costs. 
  • If you choose a higher “sum assured,” you will not want to pay a greater amount when the insurance’s limit has ended.  
  • The liability coverage must include the third-party damage or death to the third-party property. 
  • According to the motor vehicle Act 1988, liability coverage is mandatory. 

Collision coverage 

If you agreed to a “collision coverage’ in the insurance plan, your insurer would bear your car repair costs after the collision.

  • Because different situations require different solutions – there will be times when the cost of repairs will surpass the current market value Of the car.
  • The collision cover must be subscribed according to the age of your car. If you’re looking for insurance quotes, no personal info for a brand-new ride, you should ensure that the collision coverage is included.
  • If you’ve found a lien on your car, then you should consider a collision cover.
  • The older your car is, the lower the collision cover will get.

Personal injury coverage 

  • Additionally to your liability coverage, you can also include certain coverage to overcome different risk factors.
  • This coverage must cover all the expenses associated with the accident.
  • Your medical expenses plus other passengers’ expenses should be covered by personal injury protection.
  • The insurance agency has to pay for the medical bills regardless of whose fault was.
  • Hence, you can purchase personal injury coverage for the car owner, passengers and driver so that you can get the most out of your investment.

Comprehensive and third-party car insurance: What’s the difference? 

Comprehensive car insurance refers to that type of policy in which you insure your vehicle for multiple incidents and events, rather than just one or a few, regardless of whose fault it is. Comprehensive insurance provides the highest level of cover and can help the insurer cover and reduce costly out-of-pocket expenses if something happens to your vehicle.

The difference between a Third Party and Comprehensive car insurance is the protection you offer after you have a car accident.

While the Third Party only offers cover for damages to property and other cars involved, it doesn’t cover your own car. On the other hand, comprehensive insurance offers cover for both your vehicle and other properties and cars.

However, if someone without insurance hits your vehicle, and you are able to identify them, that instance will normally be covered by your Third-Party policy. Also, Third-Party Theft and Fire policies will offer protection if your vehicle is destroyed or damaged by fire or theft.

Since it offers a higher level of coverage, Comprehensive coverage is also a bit more expensive than other types of auto insurance.

Car insurance optional extras

While auto insurance policies include coverage that comes as standard, you might be able to buy optional extras for additional coverage. Examples of such add-ons include:

  • Hire vehicle After an Accident: if your car is out of commission, the accident car hire should temporarily provide you with a ride while your car is being repaired.
  • Windscreen Cover: this extra should cover the costs of windscreen repair.
  • Personal Effects Cover:
  • Roadside Support (which you can purchase separately): this extra must cover your costs of getting your vehicle back on the road again if it breaks down – or towed to a repairing center if necessary.

These extras will vary depending on the level of car insurance you choose. In some cases, most extras come as standard features in your insurance policy.

Optional policy choices and discounts  

As part of your standard insurance policy, you may have some options which will allow you to modify your policy as you wish. This might include:

  • Adjusting the Excess: Given that you can choose the amount of your excess (the amount you agree as you sign the claim), reducing it may save you considerable amounts on your claims;
  • Pay as You Drive Policy: If you rarely drive your car, you might be able to adjust the number of kilometres you drive to diminish the price of your insurance;
  • Restricted Age Drivers: want to save more on those premiums? No problem. This option can restrict underage teenagers from driving your vehicle.
  • Online Discounts: Some insurance agencies offer discounts if you choose to purchase your policy directly on their website.

Final word on different type of car insurance

As you search for cover, comparing different insurance policies can help you weight up excess payments, premiums and benefits. To make this more bearable, you can use free comparison tools.

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