Car insurance is a contract between you and the insurance company that will protect you against financial loss in the event of an accident or theft, but for that you have to pay a premium, for which the insurance company agrees to pay your losses as outlined in your policy. Policies are priced individually to let you customize coverage amounts to suit your exact needs and budget. Policy terms are usually six- or 12-month timeframes and are renewable. Car insurance premiums vary depending on age, gender, accident, moving violation history and years of driving experience. A lot of companies like prudential insurance offer auto insurance that can help minimize the losses.
Advantages of car insurance:
- Damage or loss of your insured car: If your vehicle gets damaged due to an accident or fire insurance policies cover these. Furthermore, If the car suffers losses due to theft, riots, burglary, strikes or terrorism insurance policies cover these.
- Liability: In the case of car insurance, liability means that you’re involved in a car accident that is your fault as determined by law. There are two types of liabilities in any car accident.
- Bodily-injury liability: If your vehicle is involved in an accident that causes any bodily injury or death to the third party, your car insurance policies will protect you against it.
- Property damage liability: This covers the damage that you might cause to third party’s property as the result of collision. It typically covers cars, but it can also cover other items such as buildings, mailboxes, lamp posts or fences.
- Medical: It offers personal accident cover for a predetermined amount. Personal Accident cover provides protection against permanent total disability, Death due to an accident. Furthermore, this cover can be taken for other passengers or unnamed basis (maximum as per the vehicle’s seating capacity) for a predetermined amount under the car insurance policy.
- No claim bonus(NBC): No claim bonus also called as (no claim discount, no claim bonus rating scheme or safe driver reward) as the name suggests it is a reward from insurer’s for every claim-free year. It is a discount on the premium from 20% to 50% which makes car insurance even more affordable.
Disadvantages of car insurance:
- Coverage isn’t enough: The car insurance coverage is not enough to cover serious accidents. The liability has some low limits. Some experts are recommending having at least $500,000 of liability coverage per accident and $2 million to be fully protected, cheap policies are offering only $10,000 to $30,000 liability coverage per incident.
- Delaying or Denying the cost: Insurances companies are not obligated to treat you fairly. Even if the other driver cooperates with the insurance company, the company can still deny or delay paying your claim.
- High deductibles: Raising the deductible is one of the most common methods used to lower the insurance premiums. Drivers will pay less on their monthly insurance, but if they are required to make a claim, will have to pay a significant amount of money upfront before the insurance kicks
- Increase of crime: It may lead to the crimes in the society as the beneficiaries of the policy may be tempted to commit crimes to receive the insured amount.
Conclusively there are more benefits of getting your car insured as compared to disadvantages. It is important to drive safely to avoid accidents however mishaps can happen and insurance is to get you covered if such a misfortune happens.