It may look simple and easy buying a car for the first time especially when the car cost can be accounted for. Buying a car before thinking of other expenses such as the cost for the car insurance, cost of maintenance, fuel cost and repair cost is a grave mistake most people make.
Although most people ventures in business insurance opportunity more than auto insurance, it is paramount that every homes, businesses and companies get hold of car insurance opportunity in other to reduce risk involved in the event of the car theft, accident and repair.
In this article, we will delve into the fundamentals of car insurance which includes;
- What is car Insurance
- What your car Insurance covers
- What your car insurance does not cover
- How car insurance is priced
- Types of Car insurance Coverage
What is Car Insurance
Car insurance often known as auto insurance is a kind of insurance that protect the owner from future risk in the cause of operating the vehicle, motorcycle, tractor by taking care of expenses that may arise from such accident. It covers damage to your automobile, injuries to you and others, and liability protection if you cause damage to someone else’s property while driving. Most reputable car insurance company in Nigeria provide excellent customer services to their customers.
What Your Car Insurance Covers
It Protects you against financial loss
Car insurance protects you and your business financially in the event of an accident or car damage. These days, repairing a car can be costly, and so insurance can help pay these expenses while you continue to enjoy your services as if nothing happened. It also covers other expenses such as injuries suffered by yourself or anyone in the cause of operating the vehicle.
Protect you against Legal Charge
In Nigeria for Instance, sometimes, police officers while carrying out stop and search, do request for car insurance paper before they set you free. Sometimes, Compulsory Third Party Liability (CTPL) insurance is required before you may register and drive a car in Nigeria. This is legal requirement one must attain which may attract fine or penalty by failing to comply
Protect against theft and damage
A very structured car insurance provides you with the protection against theft and damage caused by fire, flood or other natural disaster.
What does Car Insurance not Cover?
Theft of Personal Property
In any case your property was vandalized leading to lost of personal asset other than your car, the insurance policy cannot pay for those assets
Carelessness
This may arise from failure to be vigilant or a display of lackadaisical attitude toward your car leading to car theft or breaking of the glass. In other occasion, if you fail to keep your car key save and by that leading to your car missing or loss, the insurance policy cannot pay for such loss.
Natural Disaster
Any loss due to natural disaster such as volcanic eruption, earthquake, Flooding can not be repaid by the insurance policy. This is considered as an ’’act of God’’ which man does not have control over it.
How is Car Insurance Priced?
Insurer normally consider some factor when determining the price of your auto policy. Factors such as age, driving history, location and deductible you choose are considered.
What is Car Insurance Premium?
Car insurance premium is the amount of money you pay to the insurance company in exchange to claim your coverage. One may choose to pay this premium monthly or in full depending on the policy agreement. Your premium decision depends on the following:
The Kind of Car: car that contain high security features may be allowed a discount on their car insurance than someone who has no security feature in their car.
Demographic location: most car insurer decides premium based on the packing location of the car. Someone that lives in rural area may be charge higher due to higher rate of vandalism and theft than those living in a rural area.
Your Driving habit: If you have record of car accident, you will likely be charged higher than someone whose driving records are clean.
Also, someone who just learned how to drive a car may be charged higher than someone who has been driving a car for years.
What is car insurance Deductibles
The car insurance deductible is the money you pay out-of your pocket before the insurer will cover you claim or before your insurer comes in to help reclaim your loss. Your coverage, limit and deductible can be decided for you by the insurance company depending on the kind of risk your car is exposed to. Also it is worth to note that the higher the coverage the higher the deductible and which affect your premium.
What are the Types of Car Coverage?
The type of car insurance coverage you purchase should be dependent on the risk your car is exposed to. However, choosing more coverage will give you more chances of protecting yourself against any form of financial loss. Below are type of car coverage one can choose:
Liability car Insurance
Liability car Insurance is the most significant part of your car insurance policy required almost in some state. Liability car insurance is broadly classified under two categories:
Bodily Injury liability: This coverage covers for medical expenses, rehabilitation and other charges, which also might emanate from legal protection coverage in case you are sued.
Property damage Liability: This helps you pay for damage of building, repair and replacement of other people properties that is damaged because of your action
Uninsured Motorist Insurance
If you are in an accident caused by a motorist driver, who does not have or purchase car insurance, uninsured motorist coverage can help pay for all medical bills, lost earnings, and other losses that you and your passengers may experience.
Collision and Comprehensive Insurance
While liability insurance covers any harm you may cause to others, collision and comprehensive coverage only applies to your own car. Collision coverage pays for your car’s repair or replacement if it is damaged because of collision with another vehicle or object, regardless of who may be at fault. Comprehensive coverage, also known as “other than collision” coverage, protects your car against damage caused by non-crash occurrences such as robbery, vandalism, fire, etc.
Medical Expenses Coverage
This also focuses on your health well-being. This coverage take care of your medical expenses if you are involve in car accident.
What is no-claims bonus?
A no-claims bonus, also known as a no-claims discount (NCD) is a compensation scheme provided by vehicle insurance companies to customers who do not file any claims within a certain period. The maximum discount level can range from 50% to 70%
Bottom Line
Before your think of insuring your car, think of the risk you are exposed to and the kind of car you own. Is the car worth the insurance? Then ensure to research on the best coverage you are to venture into to cover any necessary loss you might incur as a result of operating the vehicle.
thanks for the update