Car insurance

Things You Might Not Know About Car Insurance

It is already a given that once you decide to buy a car, applying for a car insurance is not far to follow suit. Car insurance is probably one of the most popular insurances known all over the world. However, it seems ironic how only a few people understand the terms and policies of car insurance.

Perhaps it has something to do with the fact that we are now living in an era wherein being busy is already a normal occurrence. Today’s lifestyle demands more time than it has used to before. People tend to forget the importance of little things. Car insurance is one of them.

Car insurance

Photo Source:

In fact, there might be some things you do not know about car insurance. To help you get more acquainted with all the important aspects of this type of insurance, here are some things that you might not know about it.

1. In most countries, car insurance is a requirement.

There are only a few countries that do not require the car owners to apply for car insurance. These countries are mostly developing countries wherein owning a single car can be considered a luxury. However, in most countries, applying for car insurance is part of the post requirement after purchasing a car. Some countries even resort to a strict compliance with this rule. Failure to adhere to this requirement will face a serious proceeding. The purpose of this rule is to minimize the number of uninsured drivers.

2. It covers your car but the things inside are not included.

If ever you brought your laptop, smartphone, and other belongings inside your car, these things are not included in your insurance. Car insurance only covers the car itself. So, when these gadgets are damaged or broken inside your car during unfortunate accidents, car insurance companies will not count these things as part of the compensation. That is why it is best not to carry expensive things and gadgets inside your car.

In certain cases where you want these things to be insured, there is separate insurance that you can apply to ensure these things are insured.

3. Car insurance company checks your credit history.

The moment you pass an application form for car insurance, you have actually given the company a go signal to dig deep into your credit and financial history. Their investigation often includes your job, estimated salary, and the kind of lifestyle you have.

If you want your car insurance application to be approved easily, you better clear any pending credits you have in the past. You have to make sure that your record is clean to avoid any further complications. Aside from your credit history, the insurance company will also look into your remaining credit, miles driven, driving record, place of residence, the type of car you own, and your age.  So, before you even consider of getting car insurance, make sure that your record is clear and you pass in all those other things.

4. Car insurance companies pay the taxes and fees when accidents happen.

In certain places, car insurance offers to pay the taxes and fees of your car if your vehicle is completely wrecked during accidents. However, some insurance company will only give full reimbursement if your car is purchased within a specific time. In other cases, the other party’s insurance company may offer to pay for the tax cost and registration.

The important thing to remember here is to read your car insurance terms and policies to make sure that you have understood what things or situations are covered and what are not.

5. Insurance companies have the right to cancel your membership at any time.

If you violate even at least one rule that you and the company agreed, the insurance company has the right to break ties and cancel the insurance all together.  Some of the violations that could lead to your insurance termination are: (1) when you fail to pay the premium on the deadline set by the company, (2) when they see any discrepancy in your application forms or records.

6. You can save more if you pay your insurance in a lump rather than paying it bit by bit.

Most insurance company would offer you to gradually pay your fees, but what you do not know is that there is already a hidden interest in your fees. Paying your insurance in one lump allows you to save more as compared to before.

The most common payment method of car insurance is through monthly basis. Your payment will be automatically deducted from your salary. This is the latest method in most insurance wherein they request to have your insurance paid though your credit cards.

7. Some car insurance companies cover pet injuries.

Although your belongings are not included in your insurance, the concern about pet injuries may be included. You have to check with your insurance whether your pet’s injuries are also covered by their insurance.

Some insurance companies give an amount of around $1, 000 which is intended for the veterinarian’s fee. If you love to travel with your pets in your car, then it is recommended to get the insurance which includes pet injuries just to be sure.

Car insurance

Photo Source:

8. It does not cover cars that are for hire.

Using your car to earn money like renting it to certain people or using it as transportation in exchange for monetary value is not covered by the insurance. So, whenever your vehicle got into an accident while doing these things, the company will not give any reimbursement. You will be held liable for all the damages and have to pay them yourself.

Some car insurance companies are very particular with their insurance policy. They make sure that they only cover the car when the owner (the one who registers it) is the one driving the car when the accidents or minor damages happen. Be sure to clear this issue with your insurance company first so that there will be no misunderstandings in the future.

9. The premium fee increases yearly.

You may be wondering why your premium payment increases yearly when your car decreases its value. You have to remember that as your car gets a little bit older, the more chances of repairs it needs. This is basically the notion behind the yearly increase of your premium payment. If you want a high-quality service is to be given to your car yearly, you have to accept and pay the yearly increase of the premium fee.

10. Fronting is against car insurance policy.

As mentioned earlier, the driver’s age and driving experience are some of the requirements in getting car insurance. Not only that, it also affects how much premium payment you have to pay. This is when the idea of fronting emerged. “Fronting” refers to the situation wherein an older driver, usually, either of your parents will be listed as the main driver but registers yourself as the named driver. This way, you will be able to get a cheaper premium for your insurance.

However, car insurance made sure that since this method is illegal hence, the company has no responsibility to pay for the damages of the vehicle.

Car insurance can be quite confusing especially if you do not understand its important aspects. Not understanding the car insurance terms and policies can leave your car uninsured. It is better to understand how this thing works so that you can easily tell when something is off about the deal.

Leave a Comment:

Popular posts