Owning a car is not restricted to the rich anymore. Even for people of middle income groups, an automobile is a necessity today. Not only are cheaper cars available, availability of different kinds of vehicle loans makes buying an automobile easy. It is however not enough if one arranges for a car loan and sets aside money in one’s personal budget for payment of loan installments. There are fuel costs, repairs and maintenance expenses to be considered as well as the expense of automobile insurance policies.
Automobile insurance is not a cost which can be ignored or avoided by the car owner. Most countries have made automobile insurance compulsory. Taking automobile insurance saves you from penalties and fines. You are protected from damages caused to others by your car. Insurance also helps you to bear your own medical expenses and vehicle repair charges in case of an accident.
There are different kinds of automobile insurance policies. It goes without saying that the owner of the automobile will have to take which ever policies are required by law. For instance, in many countries, it is compulsory for automobile owners to take third party automobile insurance policies. Lenders of car loans may also insist that the automobile owner take certain policies like third party, collision and comprehensive automobile insurance policies. In addition, you have to consider your insurance requirements and decide which other kinds of coverage you need. Accordingly, you would have to take suitable automobile insurance policies.
These policies are also known as liability insurance policies and generally cover two clauses – bodily injury liability coverage and property damage liability coverage.
This is also known as ‘no fault’ automobile insurance as it compensates you for any injuries caused to you even if the injury was caused when you were not driving. So you may have suffered an accident while crossing the road, your insurance company would still compensate you. If many people have been injured in the accident, each person’s insurance company is responsible to take care of their respective injuries.
This kind of automobile insurance compensates you if you are a victim of a hit and run accident or if another vehicle which is uninsured or not adequately insured hits your car causing damage.
If your car collides with another car whose driver is not at fault, you cannot sue him for the damages caused as it was not his fault. But you still have to repair your car. Your auto insurance company would compensate you for this expense if you have taken a collision insurance policy.
Accidents are not always caused by colliding with another vehicle. A tree may fall on your car, fire may cause damage or it may be vandalized. If you take a comprehensive policy, also known as “other than collision” policy, you will be safeguarded against the losses caused by these incidents.
Before finalizing which of the above you want to take, you would want to know the cost of the different policies. This information can be got online or from your insurance agent.
Automobile insurance policies are a sure safeguard which protect a car owner like you from the huge expense you would have to bear in case of automobile mishaps.