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Car Insurance Explained
By Mansi Gupta, Mon Jan 2nd
Automobiles are quite expensive nowadays. For many people it takes several years of hard work and a lot of savings to purchase a car. So it becomes essential to secure a vehicle by the means of insurance. Automobile insurance is the best way to protect you the automobile and the huge amount invested in it.
Auto insurance is basically an agreement between an insurance company and a vehicle owner. The latter is required to pay premium at a certain fixed tenure while the former agrees to payfor any damage or loss of the vehicle. In many countries it is mandatory to have an auto insurance policy. For this policy doesnot just provide monetary assistance to a vehicle owner, it is also of great help while tracing a vehicle in case of theft andthe like.
Once you make up your mind regarding which car (any other vehicle) to purchase, the foremost thing you ought to do is to decide the amount of liability coverage that you require. For help and further information in this area you can consult yourlocal Department of Motor Vehicles. After you make up your mindabout the liability sum, think about the type of insurance youwant. There are different types of auto insurances policies available that vary according to their coverage. For instance, comprehensive auto insurance covers all cases of accident and theft of your vehicle. Whereas the Third Party, Fire and Theft insurance covers only those situations of accident when the policy holder collides his vehicle with someone else's. The company will not reimburse in case any other automobile hits the insured one. It is at your discretion as to which policy to adopt. The expense of the policy most often varies with its coverage. So the more a policy covers, the higher its cost.
Third, look for an insurance company with agents local to you. For this purpose you can check out the sites of various insurance agencies, acquire online quotes that are totally free of cost, make a survey in your social circle and so forth. However, you should know that in order to determine the contemporary rates, companies use the assistance of statistical history. These rates depend on the money the are required to pay on all claims and company business expenses. The rates of auto insurance policies are also related to the insurance company you choose. This is because each company offers different claim experiences with the number of people they insure. Moreover, the cost of doing business (i.e., the amount of money to be paid to sell and service their policies) and the financial targets to achieve are different for different companies. The companies thus charge accordingly.
Along with these there are several other factors that directly affect your auto insurance rates. These are age, make and model of your vehicle, purpose served by the it, driving record, the manner in which you maintain your car and your credit ratings.