It’s your car, so you should be able to insure it the way you want to, right? That’s why we believe that it is essential to make sure that your car is properly insured. Being on the road today is a lot riskier than it once was.
If want to find out more about car insurance, read on, as we will be answering frequently asked questions about vehicle insurance you need to know prior to signing up for a vehicle insurance policy.
What is car insurance?
Car insurance, by definition, is a contract between you and the insurance company. The contract stipulates that as long as you pay the premium, the insurance company agrees to pay for your covered losses if you experience an accident, theft or vandalism, or your car is damaged by certain causes. The amount you receive in compensation is based on several factors, including your deductible and the limit you choose for your policy.
What is the difference between the retail and the marketing value of my car?
Retail value is the likely selling price of the vehicle by a motor dealer to a purchaser. This is the possible value that a motor vehicle ‘retails’ for if you were to buy it from a dealership. The retail price is the closest value to the replacement value or cost of your insured motor vehicle.
Market value when referred to in motor insurance is the average between the likely trade and retail values of a vehicle.
What does car insurance cover?
There are several categories of car insurance each of which covers a different aspect of your risk as a driver. Here is a brief overview of these types of coverage:
- Liability: If you are deemed at fault in a car accident, liability coverage will pay for repairs, medical costs for injuries suffered by others in the vehicle, plus other expenses related to the accident such as legal fees. Your liability limits are set at the time you purchase your policy. There are two parts to liability coverage: Bodily injury liability and property damage liability. The limits are the maximum amount the policy will pay out; anything above that would come out of your pocket unless you have other insurance.
- Collision: If you hit another vehicle or an object (like a guardrail), your collision coverage will pay for damages or repairs to your vehicle after you pay a deductible (up-front amount).
- Comprehensive: Comprehensive coverage, which is also known as “other than collision,” pays for losses to your vehicle if it suffers damage from something other than an accident. For example, if a tree falls on your car or you hit a deer while driving, some portion of that loss will be covered if you have comprehensive coverage. Like collision, comprehensive has a deductible attached to it.
- Medical Expenses: This coverage pays for injuries that you, a family member or anyone else riding your vehicle may suffer in a car accident, regardless of who is at fault. It also pays for injuries you or your family members may incur while riding in other vehicles.
- Uninsured/Underinsured Motorist: This coverage pays for injuries and property damage you suffer in an accident when the driver at fault either is uninsured or does not have enough insurance to cover your injuries and damage. It will also cover you in the event that a hit-and-run driver flees the scene and you cannot file a claim against that driver’s insurance company.
- Roadside Assistance: Many insurance companies offer this optional coverage. If you need a tow or service for a flat tire or dead battery, roadside assistance will provide that service for a nominal premium.
- Rental Reimbursement: If your car is in the shop for several days and you need a vehicle, this coverage will provide that for you for a nominal premium.
Why do I need to take my vehicle for inspection?
Insurance companies inspect most cars before providing insurance cover to make sure that the car exists and to record all current damage.
They need to see if there is any existing damage to the vehicle, obtain the details of any vehicle accessories and sound equipment. If the vehicle has any accessories fitted, these will be noted on the inspection certificate, which in turn speeds up the claim finalisation process.
Does my premium decrease in line with the value of my car?
The annual premium review takes into account the depreciated value of the vehicle. However this is not the only factor which determines the premium. The majority of claims paid are for accidents and not write-offs or stolen vehicles. The cost of repairs and parts constantly increase with inflation. We thus need to increase our premiums as it costs more to repair vehicles.
Who can be included in my car insurance policy?
Car insurance costs are based on your record as a driver, but insurance coverage follows your car. That means that anyone driving your car is technically covered, including friends and family who borrow it.
Family members who live at your address and share your car (such as a spouse, partner or teenage kids) should be explicitly covered by your policy. If they have a bad driving record, it can drive up your costs.
What should I do when I get into a car accident
If you’ve had a vehicle collision, you’ll need to make a claim. You’ll need to get in touch with both the police and your insurance company and inform them as fully as possible as to what happened.
Your insurance company will give you a form to fill out that you should return to them along with any photos you can take of any damage caused.
Do I have to file a police report after an accident?
If you plan on filing a claim with your insurance, you will likely need to file a police report. If more than one driver is involved, it’s always a good idea, so you have proof of exactly what the accident entailed and the scope of any injuries.
Why is insurance more expensive for younger drivers?
Young and newly qualified drivers are considered higher risk customers by providers, and the price of the policies offered will reflect this.
Why is car insurance important?
When you get behind the wheel, you take a risk. You may attempt to be the best possible driver, but you also have to trust that everyone else on the road is driving well and paying attention, too. Car insurance provides a safety net when drivers make mistakes.
In the event of an accident, you are at risk financially. If the accident is not your fault, and the other driver does not have adequate insurance, you have to pay for all damages to your own car plus pay for any medical bills if you are badly injured.
When you are at fault, you are typically liable for damages to the other person’s vehicle as well as the medical costs of injured victims. Additionally, you must cover the repairs to your own vehicle and the costs of legal fees if you are sued. All of your assets are at risk if you are uninsured or underinsured.
How do I get car insurance?
There are a number of ways to get car insurance. It is important to understand that there are well-established insurance companies that offer excellent car insurance coverage, and there are companies that were built solely to sell car insurance and make money. Some auto insurance companies gain customers through advertising and others through word-of-mouth and excellent service.
When you buy insurance through an independent broker, you can eliminate confusion and find the best policy for your budget and insurance needs.
Get a quote today for car insurance with Verve Financial Solutions