Car Insurance 101

Owning a car takes responsibility, not only in being a good citizen and driving by the law, but also taking in consideration all the obligations that one is required to have when owning and using one. In all countries, a car bought, may it be brand new or second – hand type cars, are needed to be registered before an individual can legally use them on the road. To avoid penalties, car owners follow all the requirements there is to accomplish in registering their vehicle or vehicles.

Car Insurance

In countries like Australia, a type of vehicle insurance is mandatory for its residents to avail of, without this, they cannot fully register their vehicles. In other countries it is optional to get a vehicle insurance especially for owners who have second-hand type vehicles, they prefer not to purchase one because the compensation that they may receive in certain transactions in circumstances like accidents, is not that big enough to compare with the amount that their car is valued in the market. For owners with brand new cars, they see to this as an assurance that they will definitely be assisted in financial concerns regarding damage or repairs of their vehicles. A car owner wanting insurance for his vehicle should know the different types of insurances available and what specifics it covers.

 

Comprehensive

The most common vehicular insurance in the market is the Comprehensive Cover Insurance, this insurance will sum up the overhaul price and restoration cost of an individual’s car and physical property that has been affected in an incident that either or neither involves the car owner even when found not at fault or at fault. In addition to this is the services that will be covered like local transportation costs and urgent repairs provoked by the other party involved or the driver of the other vehicle concerned.

 

Third Party Fire and Theft

Another vehicle insurance to know about is the Third Party Fire and Theft Cover Insurance which comprises the compensation a car owner can receive for damages that his car has incurred due to burning or fire related incidents and compensation for his deficit if theft incidents has occurred. This will also cover the compensation that the other party concerned will receive for repairs and damages of their property caused by the car owner if found responsible.

 

Third Party Property

Don’t confuse this insurance with the latter, this insurance is an advantage for the other party involved. The Third Party Property Cover Insurance will only cover the other party’s vehicle and property and not the assets that belongs to the car owner. This usually comprises professional legal fees, minimal repair and damage cost of vehicles that are not insured, alternate transportation cost or temporary replacements, and other wants and services that the other party may claim.

 

CTP or Compulsory Third Party Cover Insurance

This is the type of insurance  also called “green slip” insurance that car owners who are citizens in Australia are mandated to have before the registration of their vehicles will take place. This insurance makes the car owner liable and responsible for the compensations that the other party will receive because of physical injuries gained in an accident, including others that were affected and present in the vicinity during an incident. This will sum up all the total expenses from hospitalization, recovery and maintenance needs of the inflicted. There are specifics for this insurance that not all states in Australia  or other countries follow closely so better inquire about it before purchasing for one.

Policies of Insurance companies will vary depending on their marketing and processing procedures, inquire for any extra coverage that they can offer from which you can benefit from.

 

Terms used in Vehicle Insurance Policies that you need to understand and know about

Excess

This is an amount payable by the car owner during instances that a claim will be asked of. The insurance company will shoulder ¾ of the amount, while the car owner will pay ¼ of the amount of repairs. In cases that the car owner is not at fault and the other party is insured then the car owner can make the reclaim the excess payment.

Voluntary Excess

To lower the payment for your insurance contribution, this is additional payment that you approved and acknowledged with your insurance company to give in instances there will be a claim. This agreement lessens the amount that the insurance company will shoulder.

Age Excess

In the account that the driver that you have encountered is below the age of 25 and vice versa a higher amount of excess fee will be charged.

Making a Claim

Report and keep details of an accident when making a claim. This will be very useful for an accurate assessment for compensations on repair or damages. Inquire properly with your insurer regarding this matter so expectations will not cause frustrations in the long run.

Agreed Value

For Comprehensive Insurance coverage, an agreed value is discussed between the car owner and his insurer, this is a fixed amount that you will receive as compensation.

Market Value

As the term “market” is implied, the equivalent or assessment of the car owner’s vehicle will rely on the present value it has in the selling market with regards to its model, year it was made, and the tenure of the vehicle under his possession, all in all the present condition of the vehicle is what will be assessed.

Purchasing an insurance for your vehicle is not only for compensation sake of repairs and damages, this will also insure the benefits that you and your family may receive in instances of accidents or fatalities. Choose the best, research on companies that you can rely on basically for the days that you are driving or owning a car. Don’t see vehicle insurances as additional expenses but an investment that will be very useful to you and your family, may it be in a present situation or a future one.