Anyone driving a car or motorcycle understands the importance of having car insurance, which is the main financial protection for drivers in case of traffic collision or other accidents, it is also a kind of financial responsibility for the accident. In each region the law and requirements for such insurance are different, but anywhere we are we still need it.
Car insurance type depends on different factors. To understand how car insurance works driver should mind the type of vehicle, his purposes in using it and the amount of money one can pay. To see the different types and packages of coverage driver can learn the offers of car insurance companies.
In most cases car insurance types are:
- Collision – in case of damaging caused by another car
- Liability – a type of coverage in case of accident and body injury. Also includes any property damage of the automobile.
- Comprehensive – this type of insurance includes any loss caused by fire, wind, earthquake or vandalism, it also includes theft.
- Medical – this type of insurance pay for drivers or passengers medical expenses
There are also types of insurance, which can cover other cases depending on the law of the region. The driver can buy one or several types of coverage, combine them and choose any type, depending on needs.
Deductible or excess is one of additional point to think about. Any type of car policy has the part that driver will cover himself and is called deductible. It depends on the amount of money the driver initially pays for the coverage and on the law of the state. For example the deductible is 250$ and the damage of the vehicle is 1500$. So the driver is supposed to pay 250$ for the repair of the vehicle and the company, that is providing car insurance, would cover the rest 1250$.
How car insurance companies work?
The work of car insurance companies is based on constant risks. To protect themselves of too much loss, car insurance companies analyze certain factors that may affect the driver and increase chances of having an accident.
- Driver record
- Vehicle classification
- Driver’s occupation, gender and age
- Behavior- based insurance or driver claims history
There also can be factors such as credit history to determine risk.
How does car insurance work when the driver is found to be fault in an accident?
In such a case driver is supposed to file the claim with the company, and after processing the claim, the company will cover the damages and pay out funds.
Watch this video to get the full idea on how does car insurance work: