Insurance companies in the U.S have only been going from profit to better profit. The growth in other sectors such as the automobile market has affected the growth rate of the insurance sector. Understandably, the features of the policy have changed with the changing need. The most popular forms of auto insurance in the U.S are currently the liability policy and the comprehensive policy. Both policies cover damages sustained during an accident.
The need for auto insurance
Auto insurance like life insurance, property insurance and health insurance undertakes reimbursement for damages sustained. The likelihood of an accident on the road has increased tremendously. With the amount of traffic and the speed at which some vehicles operate it is a wonder there aren’t more accidents. There are various types of auto insurance policies. Other than the blanket policy that covers general reimbursement, there are several other policies devised by the insurance companies that are designed to fit the specifications of the modern customer. These policies take every little detail into consideration- the features of the car, its retail price, the speed it affords, the gender of the applicant along with several other personal details. These personal details actually indicate the degree to which one can expect an accident.
Reports show that gender, for instance plays a role in predicting road fortunes. The chances of a man meeting with an accident are greater than a woman. Research shows that men are more likely to indulge in fast and rash driving than women are. Then the age matters. Younger drivers are more likely to meet with an accident than older drivers. Again, this may have something to do with the speed at which young drivers drive at.
The type of vehicle and its class is a very important consideration in the process of selecting a vehicle. As far as the insurance company is concerned, the only aspect they are interested in is how prone the applicant is to meeting with an accident. Therefore the features of the car are important to not.
If the vehicle is a high- end model, that is built to be driven at top speeds, the risk represented by it is greater. Similarly, the cost of the vehicle would indicate how easy and expensive it may be to get refit the car or bike when damaged. Then, the class of vehicle is important. By class I mean whether the vehicle is a high or low capacity one. Bikes, for instance fall in the small vehicles category. The chances of a biker crashing his vehicle are high, but the cost of repair is relatively lower than the cost incurred by a damaged car or truck. Trucks are heavy vehicles constantly traveling the highways, where the incidence of negligent and rash driving is rampant. Therefore, the Insurance company checks to see how likely it is that the vehicle in question will crash. The premiums vary accordingly.
Premiums paid on insurance policies are not fixed. In some cases, the price of the premium is decided by the government; at times the insurance company itself fixes the price with the help of government guidelines. The price on policies varies from one type to another. The greater the coverage provided, the more expensive the policy will be to purchase. Auto Insurance also includes coverage in case of collision, personal injury protection (PIP) and medical payment coverage to name a few.