If you have at last bought your dream car and think that all you have to bother about now are the car loan installments, you need to think again. There is the automobile insurance policy to be purchased, selecting from the various types of automobile insurance available. There are also the fuel and maintenance costs to be borne.
There are many risks associated with your car, when you are driving as well as when you think it is safely parked. When you are driving, there may be an accident. Your car may injure others or cause damage to property. If such an incident occurs, the injured party will surely sue you for damages and you may end up paying a large sum of money. Or it may so happen that that you are injured in the accident in which case you have to pay your medical bills. If your car is damaged, you have to shell out money for repairing it. Taking the right types of automobile insurance will protect you as you will be compensated for the loss by your insurance company.
There are different kinds of automobile insurance. Some types of insurance have to be compulsorily taken. Your car loan lender may want you to take some particular insurance coverage. Other than these, you may also feel the need for some specific coverage.
The main types of automobile insurance are:
This insurance is also called as liability insurance. It generally includes the following clauses:
This is also called as ‘no fault’ insurance. The insurance company compensates you for personal injury caused not only when driving but also if you were a pedestrian crossing the road.
This is one of the many types of automobile insurance. If your car is hit by another car injuring you and / or causing damage to your car, you can claim damages from the owner of the other car. But if that car is not insured or is insured but the insurance amount is not sufficient to compensate you, your insurance company will pay you, if you have taken uninsured and underinsured motorist insurance.
If you choose this under the various types of automobile insurance, you will be compensated by your insurance company if your car collides with another vehicle and is damaged.
Your car need not be damaged only in an accident. It may be damaged due to a tree fall or in a storm or due to fire. Vandals may attack the car. Among the various types of automobile insurance, comprehensive insurance is the only one which covers losses caused due to reasons other than collision.
Generally, an automobile insurance policy is a combination of different types of automobile insurance. The premium rates will be based on the insured amount and the types of automobile insurance you opt for.
Finalize on the automobile insurance policy after carefully considering the risks you can and cannot bear, the premium you can afford and so on. It may seem like a waste of money, but the insurance amount will be like a godsend in case of any adverse incident involving your car.