Simply put auto insurance is an insurance cover for your vehicles. These can be for cars, trucks, tractors, motorcycles etc. Hence if you want to play safe and have a safeguard for yourself and your vehicle purchase an auto insurance cover. It helps the consumers by shielding the private passengers traveling in that vehicle from monetary losses in case the vehicle is involved in any kind of accident or damage.
Therefore an agreement is reached between the owner of the vehicle as well as the insurance company. This is called an agreement / contract / policy whereby the company agrees to provide cover for any damage that may occur to the vehicle. These damages include damage to property, nay physical injury, medical treatments or death as would be laid out in the auto insurance policy.
In exchange for the cover that is provided by the insurance company, the company collects premiums, which are due on the auto insurance, cover. These premiums are based on a number of factors such as the maker of the auto, whether it’s a new or a used vehicle. the mileage that it has run for, whether its self driven or chauffeur driven etc. all these affect the amount of call premiums that you would be paying for getting the insurance cover. Another fact is that unlike life insurance covers, these auto insurance covers must be renewed each year.
One can simply pay the insurance premiums yearly, monthly etc. another point to note is that you would be reimbursed the amount as is given in the auto insurance cover. Even if you have a claim, which is higher than the cover, you will be reimbursed only the amount as is laid in the cover. Therefore if you have an auto insurance cover for $5,000 and claims work out to be $5500. The amount reimbursed by the company will be $5000 only.
Your premiums will also be dependent upon the deductibles that you have. If there is an accident, and you agree to pay for the damages up to the deductible amount then the insurance company will pay for the costs beyond the deductibles. Thus one should set the deductibles as high as possible so that the insurance premium will be lower.
Insurance premiums would also fluctuate with time but are usually fixed over a six-month period. As stated earlier, if the car is new and expensive, be ready to pay more for the premiums. As you establish a safe driving record, your insurance premium will come down. However the more miles that the car runs, the higher would be the insurance premium.
When getting a quote for an auto insurance cover, one should approach many companies as well as get a quote on line. In this way you can compare the various benefits that the companies are offering before making up your mind to buy the auto insurance cover from a particular company.