With so many choices of auto owners insurance available in the market, before choosing an insurance coverage one must first understand the autonomy of the auto owners insurance.
When an applicant is looking for insurance for his automobile and makes a deal, he automatically enters into an agreement with the insurance company for a monthly payment of premium against his policy. In return, the company agrees to pay for damages caused to the car or property due to the insured car or person but within the limits of the policy and terms of the insurance company.
The insured car owner however has to make a payment for once that is known as a deductible. The deductible is a pre determined fixed amount that needs to be paid towards the expense that might be incurred for fixing of the damaged vehicle. This deductible amount remains standing and does not depend upon what the insurance company agrees to pay for damages that may be forced on the car owner during the accident.
While there are various types of insurance cover available for automobile owners, in the United States a car driver must have a basic insurance coverage before being allowed to drive a car on a public road. Of the different insurance coverage the liability coverage is the most common and popular. This is the legal coverage that all car owners must possess. Under this coverage a pre fixed basic amount will be reimbursed by the insurance company when the car meets with an accident or causes injury to a third party.
Then there is also the comprehensive insurance coverage and the auto collision insurance coverage that covers almost all the needs of a car owner when he is driving a car. This coverage’s secure the financial safety of the insured person if he meets with an accident. The insurance amount is paid to the insured person as reimbursement against the expenses that the car owner faces when meeting with a collision or accident. The amount gets paid to the insured person once the deductible is subtracted from the insurance amount. The pre determined deductible amount stays the same where as the insurance amount paid by the company varies as per the charge incurred in getting a damaged car fixed. Agreeing upon a large deductible amount will allow the insured person to pay fewer premiums but this will also make him bear higher expenses in case the car meets with an accident.
