Like it or not, vehicle insurance is a fact of life especially for those who own or dream of owning vehicles for personal use or business. You know, auto insurance has been with us for a while now and the logic is simple-protect yourself, car and third parties from financial losses as a result of your car or driving. Today, there are so many auto insurance companies that offer a wide range of insurance products just to ensure that any possible losses associated with car ownership or driving have a cover. Before you just jump into choosing a car insurance company or a car insurance policy, certain valuable considerations must be made.
For some people, the topic of car insurance comes about as a low priority talking point. On the other hand, not so many people invest deeply into thinking about their insurance choices as it’s not an easy thing to do. However, in the contemporary world, insurance as a whole has advanced to cover different lifestyles. As insurance firms around the globe unveil more niche policies, the dream of being fully covered is more within reach. While one will have to track down a certain kind of insurance firm to get access to these unique policies, they are figuratively and literally out there to be purchased.
Car insurance is as important as it is complex
Car insurance is an important yet complex topic that many people would shun. The choice of an insurance company and option is often made emotionally rather than using clear analysis. This is a big mistake that should be corrected especially for car owners who mean to be conscious in their decisions. Just know that car insurance is mandatory but the choice of an insurance is in the hands of the car owner.
In almost all parts of the world, driving without valid auto insurance can attract fines, immense damage compensations in case of an accident, auto impoundment, and the worst, general embarrassment. However, just the way one may recognize that auto insurance companies are out to make a buck, one should be able to get the better if not the best out of the offering. Insurance companies take several aspects into consideration before having the car insured.
The term comprehensive cover sounds so attractive. Doesn’t it? It is a vague term. The term may make the insurer feel that his automobile and life is secure, and fully covered in just about and every scenario anywhere. Sadly, that’s not a reality. Comprehensive implies that one will be covered in situations like theft, fire, flooding, or vandalism. What this kind of cover does not insure is vehicular collisions, third party damages, and/or loss or injury of mobility/life caused by a collision.
What actually determines your car insurance?
The amount one pays for car insurance is determined by several factors ranging from the kind of cover to driving records to where the car is parked. While not all companies use the same restrictions, here’s what commonly determines the ultimate amount of the auto policy.
Driving record
The better the driver’s record, the lower the premium. If your past driving record is tainted with accidents and serious traffic offenses, there is the likelihood of getting deeper into your pockets than if your past history is clean. In some instances, one will be compelled to pay more is s/he is a new driver without prior insurance record.
Car make and model
Here, it is a matter of the “have” and “the have nots.” If you can afford that expensive wheel, then be ready to spend more on covering it. Insurance companies will look at historical claims from such models and evaluate cost of repairs. They also check theft rates, engine size, as well as comprehensive payment claims. Vehicles with high quality safety equipment may be given premium discounts.
Also read: How to Choose a Perfect Car Insurance Company
Insurance companies not only consider how safe a given automobile is and how well it protects the occupants. But, also the possible wreck it can cause on another vehicle. A vehicle with a higher chances of causing a wreck in case of an accident attract more on premium. The insurance company will typically levy more charges for liability insurance.
Age of the driver/car owner
It is a common phenomenon that mature drivers are prone to fewer accidents compared to less experienced drivers, especially teenagers. Insurance companies will charge more if under 25 year teenagers get behind the wheel.
Gender of the car owner/ regular driver
If the client is a female driver, she gets somewhat different insurance coverage than the other gender. Such female-centred policies offer roadside aid. Alongside this, there is a coverage on stolen purses if they were in the vehicle at the time of theft. Sounds great eh? This extra coverage can be a great deal and offer female drivers a reason to smile. Unfortunately, the downside to this is that such a female-centric premium tends to be a little costly.
Statistically, women tend to be involved in fewer accidents. They have fewer “driver-under-the-influence” accidents, and most importantly less serious accidents compared to men. So all other things remaining constant, women will always pay less for car insurance than male colleagues.
Location of your regular driving areas
Do you live in leafy suburbs or in shanty neighbourhoods? Urban drivers and car owners get a higher insurance price than those living in rural or small towns. This is because in the urban settings, there are high rates of theft and accidents. Risks occur at the parking lot, streets or secure garage. Having or lacking anti-theft functionalities will determine the cost as well.