Revealing all about auto insurance that you need to know


The term motor vehicle insurance refers specifically to the coverage given to motorcycles, cars and trucks. In the event that an accident causes bodily harm as well as damages to livelihood and property, it is this kind of coverage that allows a policyholder to file for a claim.

It is known that owning auto insurance is necessary if you own a vehicle; it is required by the law to have insurance for the vehicle as well. If one does not comply with these rules, heavy fines are imposed or still worse, one can be made to serve time in jail. The minimum requirement is for one to have liability insurance coverage for the third party, in case damages are received by the third party in case of an accident.

The coverage offered by motor vehicle insurance may include loss of life, and damages of property, received by policyholders and third parties as well. Other more specific kinds of coverage against other such damages like fire, theft, vandalism, natural calamities floods, earthquakes and hurricanes are offered by some policies.

Each state has a minium extent of cover that they consider mandatory, failure to adhere to these terms leads to insufficient insurance. Insufficient insurance is also illegal and can land you into a soup in the event of an accident, or even a check on your papers during a routine traffic stop.

The rates for auto insurance differ vastly, and these are dependent on various factors, which can include the driver’s age, gender, income, driving record, marital status, as well as the type of vehicle that is owned. Higher premium rates are usually given to students and teenagers as they are considered high risk drivers. This is owing to the fact that teenagers have little or no driving experience and thus pose a higher threat when out on the road. Seniors who are over the age of 75 years too, have to pay a higher premium rate, but this is mainly because of their physical limitations, they have higher chances of getting into dangerous traffic accidents.

How does gender become a basis of difference in premium rate? Women are usually benefited with lower premium rates than men. Women generally tend to be more cautious and safe drivers and run a much lower risk of getting embroiled in automobile accidents. Men on the other hand tend to be more aggressive at the wheel and are involved in far more road accidents.

Married people attract lower rates than single people, as it proves to the insurance company that the person is ready to accept responsibility. People with sports cars are more likely to end up in an accident too, and this is due to the enormous power put out by their vehicles.

Discounts are offered to people with additional safety features in their car, such as ABS and an anti theft system. Discounts can also be availed on the basis of profession; teachers and army men tend to get discounts at most insurance companies.

Getting the best deal when it comes to insurance is easy, once you learn to strike a balance between cover, extent of cover, and the premium. Deductibles can be increased to lower the premium you attract, however this is only advisable if you have been driving for a few years and have a clean record with no accidents. People who settle for lower extent of cover to save on auto insurance premiums often learn that they have made a grave mistake.