We know, we have so many cars fonds out there. They get crazy with the launch of any new car or excited when they have to buy a new car.
At the same time, one should also pay attention to car insurance as well. Car insurance is something that offers financial protection to your car if any unfortunate incident takes place.
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Car insurance?
Being a car lover is not enough and you must know all the facts and benefits that are covered in car insurance policies. Car damages are not rare. One should avail of car insurance to get compensation from insurance companies if any mishappening took place.
So, car insurance is a kind of insurance scheme that offers monetary security in case of both physical damage and liabilities that are likely to develop from any kind of disturbance in the vehicle.
How does car insurance work?
Before knowing the way car insurance works, we must know some basic concepts and terminologies related to car insurance.
It is an agreement between the owner of the car and the insurance company where the insurance company promises financial protection against certain losses or damages that would be caused to your vehicle, and in return, you need to pay a premium.
What is Policy Coverage?
Policy coverage refers to the coverage you are getting for your car.
Car insurance companies have different types and levels of policy coverage. Users need to select the type and level of coverage they want.
Here are a few common types of coverage:
- Liability Coverage: if you are responsible for harming someone and damaging their property in an accident, it covers costs.
- Collision coverage: no matter whose fault it is, it covers costs for damage to your own vehicle in a collision.
- Comprehensive coverage: it covers damage to your car resulting from non-collision events like theft, destruction, or natural catastrophes.
- Personal Injury Protection: no matter whose fault it is, it covers medical expenses for you and your passengers.
What is a Car Insurance Premium
In order to sustain your insurance coverage, you need to pay a premium, monthly or annually. There are several factors based on which premium price is decided and these factors include history, age, location, the type of car, and the coverage options that you have chosen.
How does the claim process work?
Claim File: To file your claim, you must register a claim with your insurance company if you encounter an accident or your car is damaged.
This claim process includes:
- Reporting about the accident or the damages to your insurer as soon as possible.
- Furnishing all the required documents like pictures of the damages, and police reports.
- Cooperating with the insurance agent to evaluate the damages and decide coverage.
Claim Settlement: Once your claim is sanctioned by the insurance company, your insurer will dispense your compensation amount depending on your policy coverage and the incident.
It involves:
- Repair: Repairing your vehicle
- Replace: Replacing your vehicle if it is damaged.
- Reimburse: Reimburse your medical expenditure or other expenses based on your coverage.
Deductibles: Basically deductibles are associated with insurance policies in which the expenses toward damages need to be paid before the intervention of the insurance claim process. You can take this with a reference as mentioned below:
Suppose you have taken 500 as a deductible amount and the repair cost against the damage is of 2000. In this case, you need to pay 500, and rest 1500 is covered by the insurance company
Car Insurance Policy Renewal: Usually, car-insurance policies are of fixed terms after which the bearer has to renew the same
Final Thoughts
We have mentioned what car insurance is and how the claim process works. The information will be useful for you if you have an existing car or want to buy a new car. Always be attentive to the car insurance policies, premiums, and claim settlement processes.
Still, if you have any queries or concerns, feel free to shoot. We are here to assist. Also, keep browsing the page for more information. Stay happy!
