What Affects Car Insurance Rates and Coverage?


What is Auto Insurance?

As with other forms of insurance, it serves as some sort of protection against damages/losses incurred because of traffic-related accidents, as well as indemnity against lawsuits and liabilities which could be incurred in vehicular accidents. This is provided by insurance companies as Vehicle insurance, car insurance or motor insurance.

Who and what is covered by Auto Insurance?

Auto insurance can cover some, if not all of the following: a) Physical damage on the insured vehicle; b) Medical payments for the insured party; c) Personal injury protection, (Also known as No Fault Auto Insurance) which pays for damages which may sustained by the insured vehicle and its passenger/s regardless of liability; d) Third parties like vehicles and people, property damage and bodily injury; e) Third party, fire and theft. 

Insurance policies have specifications defining categories and circumstances which cover all or any of the above. A good example of this is protection from theft, accident damage or fire damage, with each case having a separate insurance. 

Is it necessary for me to get Insurance for my vehicle?

Absolutely.  State laws dictate that at least third party insurance is required to protect third parties against the financial consequences of loss, damage or injury caused by a vehicle. In some countries/states, a driver’s license can only be issued to individuals who can present liability insurance in any form. Many countries and states also require vehicle insurance covering various liabilities for injuries and/or property damage done to other parties. Some States solicit annual fees for each uninsured vehicle as compensation for some sort of state-provided protection against liabilities. Penalties incurred as a result of not having auto insurance usually involve a substantial fine, suspension, revocation of driver’s license or in some cases even incarceration.  

I have a bad driving record. Is auto insurance available to me?

Yes. Most states require auto insurance for all drivers, and provide risk plans to ensure coverage in the event that an individual cannot find an insurance company to protect him. Given a bad driving history, you’re definitely a risk for any Auto insurance provider. You may expect to pay a huge sum.   

Owning a car is a definite priority for many of us, along with having a house, clothes, and ample provisions. As with any of these priorities, certain responsibilities are required of us to ensure continued use, accordance with law and an overall positive experience, at least with regards to driving and owning a vehicle. One such responsibility is making sure that you, your passengers and your car are protected in the unfortunate case of accidents and unfortunate mishaps as of yet unforeseen. Which is why, as mandated by law, you will need to have auto insurance.