As a car owner, you must have an auto insurance policy. The reason is that it duly compensates drivers for damages to their vehicles due to accidents or other covered perils such as fire, theft, vandalism, falling objects, etc.
Regardless of the type of car you drive, there is always a chance that you might be involved in an accident. However, having an auto insurance policy in place will protect you from the bills associated with the damages you incur.
To better understand auto insurance and how it works, we have compiled a list of the things you need to know.
Each insurance provider calculates premiums using different methods, although they use similar basic factors. Some of these factors include the make and model of the car, your driving record, how you use the car, etc. Some other factors they consider include:
- Your age, gender, and marital status – Statistics have found that young male drivers are more likely to be involved in auto accidents than older, more experienced drivers. As such, they are more likely to file claims than others.
- Your location – People who live in urban areas with high crime rates are at higher risk of auto accidents, thefts, and vandalism than those in rural areas.
Collision and comprehensive coverage
The difference between these two types of auto insurance coverage can be confusing. As such, not everyone understands what they are buying. It is, however, important that you know the difference as they are a vital part of auto insurance.
- Comprehensive coverage – This coverage protects you from theft and damages caused by non-collision incidents. Examples include fire, theft, flood, vandalism, falling objects, etc.
- Collision coverage – This coverage protects you from damages to your car caused by a collision with another vehicle or object.
The cost of the car doesn’t determine the premium
As mentioned earlier, the make and model of the car are usually considered when determining the premium. The cost of the car is, however, not a determining factor. In fact, if the expensive vehicle has a better claim rate for accidents or thefts than lesser-priced cars, the premium may be less.
Auto insurance applies to the car, not the driver
Auto insurance applies to the car that is involved in an accident rather than the driver. As such, if someone other than you should get into an accident with your car, your insurance will cover the damages. For this reason, always consider the implications of lending your car to others.
Buying auto insurance is similar to making any other purchase. Therefore, you should compare different insurance companies to find the coverage, cost, and service suited to your unique needs. If you would like to know more about auto insurance, contact our experts at Young Insurance. We are here to assist you with all your coverage needs.