Car insurance is a widely debated topic these days. The old timers seem to think car insurance is a waste and unnecessary expenditure but the latest generation knows it is as essential is health insurance. Accidents can happen anytime, they come unannounced and cause massive losses to life and property.
Aimed at giving security against the losses suffered due to traffic accidents and other liabilities, car or auto insurance can be simply defined as an insurance purchased for cars, vans, trucks and other vehicles. Today, car insurance has become one of the most crucial as well as aggressively marketed insurance products, with insurance companies offering customers cheap alternatives such as low cost car insurances or even comparing car insurance quotes by rival companies. Car manufacturers themselves get into the insurance deals, with even new drivers being offered the benefits of extra insurance covers like low-cast window screen and free breakdown cover.
Many jurisdictions have made it compulsory for people to purchase car insurance prior to them owning or driving a vehicle on public roads. Although all jurisdictions believe the insurance of the car as well as the driver to be simultaneously related, the measure of each party varies greatly. While car insurance more often than not covers such concerns such as the insured party,the insured vehicle,third parties like other cars and vehicles, as well injured persons driving the insured vehicle, other concerns may also be addressed separately within this, such as fire, theft or accident damage. Curiously enough then, in consistence with the ‘risk homeostasis’ theory, a Jeremy Jackson and Roger Blackman study in 1994 related an increase in accident costs with a large decline in accident frequencies.
The insurance policy includes an excess payment, called deductible, which is a fixed amount one must pay every time the car is repaired in the course of the insurance policy. Generally, the payment is made straight to the garage while collecting the car after repairs,but if the car is stated as a ‘write off’ or ‘total loss’, which is when the repairs amount to more than the vehicle – the insurance company forgoes the excess as agreed on the policy settlement. The excess can however be reclaimed in case during an accident the other driver was at fault and the third party’s insurer agrees to pay. The minimum excess payment, known as compulsory excess, however, differs according to one’s individual details, the driving record as well as the insurance company.