Insurance World

Auto insurance as we all know is the insurance consumers purchase for their vehicle be it a car, truck or any other automobile. The purpose of auto insurance is to safeguard the vehicle against accidents, theft and any other loss incurred. Auto insurance can cover, the insured party, the insured vehicle and the third parties. Different policies specify the situations under which each of these items is covered.

Like life insurance, auto insurance too has become the need of the hour. A surge in insecurity of the vehicles has resulted in many big and small companies venturing in this area and trying their luck.

There are different types of auto insurances available. The policies vary with the need and wants of the people purchasing the policy. For example certain types of insurance policies include bodily injury liability, property damage liability, medical payments, and collision and comprehension coverage for physical damage to the insured vehicle.

Broadly speaking an auto insurance policy is divided into five parts.

1.
Declarations- this part of policy contains personal information about the drivers in your house. This includes their name and address, make and model of the vehicle, vehicle identification number, policy number, duration etc. This part also comprises of basic type of coverage that you purchased and your policy limits and deductibles. It is very important to provide correct information in this area; otherwise the insurance claim can be declined at ease.

2.
Coverage Parts- in this option the coverage limits such as liability, medical, collision and comprehensive are discussed. This section primarily outlines what your insurance company guarantees to provide in return for your payment, based on the coverage and coverage limits opted.

3.
Exclusions- this section briefs about what is left uncovered by your policy’s limitations. From here you will get to know that what all will be covered when you make a claim and allows you to make rectifications in the policy.

4.
Conditions- this section is all about legitimacy i.e. the legal bindings on the insurer and the insured. It includes premium payment obligations, steps to filing a claim, and guidance to resolve disputes.

5.
Definitions- also known as fine print, this segment is where terms and the rights of the policyholder and the insurance company are defined.

In several countries it is mandatory to purchase auto insurance before driving on public roads. The least requirement in this area is third party insurance to protect the third parties against the loss, damage or accident by a vehicle. You may or may not get an insurance cover against loss or damage to your own vehicle. While some other countries make the insurance of both the car and the driver compulsory.

Car insurance plans a regular flat charge per-car or per year despite of the extent to which the car is used. There is no adequate statistical basis for the insurers to compare costs used to support price classifications. Other well known methods of differentiation are reasonable estimation, odometer based systems, GPS based system and OBDII-based system.

You left your home too late and are now rushing to get to an appointment. Or perhaps traffic was backed up and now that it’s freeing up a bit, you want to make up for lost time.

But before you put the pedal to the metal, did you know that speeding is one of the most prevalent factors contributing to traffic crashes? There are approximately 6 million police-reported car accidents every year in America-that’s one accident every five seconds. According to the National Highway Traffic Safety Administration, speeding reduces a driver’s ability to steer safely around curves or objects in the roadway, extends the distance necessary to stop a vehicle and increases the distance a vehicle travels while the driver reacts to a dangerous situation.

Do you recognize any of these other seemingly harmless driving behaviors?

• Swerving or missing an exit while talking on a cell phone?

• Applying lipstick or mascara while driving?

• Driving while reading a newspaper or your text messages?

• Encroaching on the bumper of the car in front of you?

Whether you’re 16 or 60, responsible driving should be everyone’s priority. Additionally, safe driving practices may help you save money on your auto insurance because insurance companies base premiums, in part, on driving records. It pays to find out if your insurer will give discounts for being accident-free. A few habits that may help you become a safer driver include:

• Signaling when changing lanes;

• Slowing down and using caution when driving in bad weather;

• Maintaining a two-second rule when following other vehicles;

• Asking someone else to take over the wheel when you’re tired, upset or have consumed alcohol.

Some insurance companies will also give discounts if you’ve taken a defensive driving class or if you are a student and meet certain requirements such as achieving good grades. Others offer rewards for safe driving where discounts can be earned toward the next renewal premium.