When you’re getting a car insurance, you should always compare quotes so that you can be sure you’re getting the best coverage possible. However, with so many different types of car insurances with different factors, it can be hard to decide which ones you need.
Those who own cars that are under five years of age are probably well quite wary of insurance salesmen who accost them to try and sell their insurances. However, you should only pick an insurance policy after you’ve combed through it carefully and have read the fine print even more closely.
In this article, we’ll give you a breakdown of the kind of insurance that you need for your car.
The Different Types of Car Insurance
- Third Party Liability Insurance: This is an extremely important type of car insurance as it involves either accidents that harm or even lead to the death of a third party individual. And it also includes damage to property belonging to a third party. So if you’re even in a car accident that you might be responsible for, this will protect you financially.
- Comprehensive Plan: The Comprehensive Plan, as the name suggests, is comprehensive. It’s the one that most people go for as it includes “own damage” for your own vehicle, and also “personal damage”, which can get you and your co-passengers the necessary treatment should you be in a serious accident. Furthermore, it also covers unforeseen circumstances such as damage caused by natural disasters, fires, or theft.
Once you’ve assessed the type of insurance you need, you should also look at the premium. Below, I’ll list out a couple of factors that generally affect your car insurance premium.
- Vehicular Risks: The premium of your car is determined by the model, design, the fuel capacity, amongst various other things. Vehicles like SUVs generally have a higher premium because there are a larger number of claims made on those vehicles. Furthermore, diesel vehicles also have a higher premium than vehicles that run on petrol. The older a car is, the higher your premium is likely to be. For vehicles that are over 5 years old, they use the current market value of the vehicle as the Insured declared value.
- Locational Risks: The premium also depends on the geographical location of the car. If you’re living in a densely populated urban area, the premium will be higher. And if reported thefts in the area have been higher, you’ll again have to pay a higher premium.
- Driver-Related Risks: The age and the profession of the driver can also alter the premium, and if multiple drivers will be involved that can increase the premium even more.
- Claims: If you’ve filed a claim already, your premium is likely to increase the following year.
Well, so these are all the different types of factors that can affect your car insurance premium. You should ideally go for the Comprehensive plan of car insurance, even if it incurs a higher premium.