What is Car Insurance Policy?
The word car insurance is also known as motor insurance or auto insurance. Motor insurance is done to protect your vehicle form any unforeseen risk. Motor insurance basically provides you cover or protection against any losses incurred arising due to some unavoidable instance. The policy taken to protect your vehicle provide you cover against theft, accident. Well the cover letter of the insurance comprises of insured party, the insured vehicle and the third party.
Furthermore the premium of the car insurance policy varies from policy to policy depending upon certain parameters. Some of those parameters are type of coverage, value of vehicle, vehicle classification etc. If you have car insurance then it gives the confidence to the insured person to drive peacefully. At the same time at the time of accident or any loss motor insurance act as savior for the insured person.
Now a days there are so many companies offering car insurance policy and even posses strong market position. Because of which it becomes really difficult to select one car insurance policy which is best for your vehicle. Before buying insurance policy of any company it is very important to thoroughly check the documents carefully. You must compare the policies of different company as when you will compare then you will notice that there is lot is difference in policies of different companies. This difference might vary in terms of price, premium you pay etc.
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Importance of Car Insurance
1. Financial Protection
Insurance is a game of chance in which there might be a case where your car can get damaged and you have taken cover but there is no cover to fix that damage. Now at this point of time you might get frustrated as your car insurance policy is completely of no use. Now this is not a case of fraud as you will get benefits for only those items for which you have actually payed.
Taking an example, if you met with an accident and you were at the fault. Now the insured person will ask for the compensation now if you have insurance policy then its okay. But if in case if you have not availed insurance policy then you will have to pay the compensation amount from your pocket.
2. Not for Mechanical Repair
The car insurance policy will not account any damaged caused due to vandalism, fire, collision etc. Any form of mechanical repair is not included in the policy as it will be accounted under the warranty. Auto insurance is done for protecting your vehicle against any damage not for maintenance.
For example, if you think that you have taken car insurance and you think you can deliberately cause damage to your car and later the car insurance company will pay you. Then let me tell you that this is not the case as the insuring company will never pay you for mechanical repair.
3. Physical Damage
The Motor insurance company will pay the amount for damage to your car depending upon the coverage you have selected for. When it comes to taking coverage of your car it actually becomes very expensive task. If you take physical damage protection then there are several rules in it like what is covered and what not is covered. Under physical damage there are two categories like comprehensive and collision.
The comprehensive coverage includes coverage against fire, deer, theft, storm damage, vandalism. Even if you need to buy collision coverage then you will buy comprehensive first. While collision coverage provides protection against accidents with automobiles, tress, mailboxes, light posts, and any other inanimate object.
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