When we buy a car or want to buy a vehicle, then it is a must to have car insurance and it is always necessary. Car Insurance is very important to have car insurance to protect the vehicle and all associated repairs as well as replacement. You need to know more about auto insurance with cheap prices and what it includes or not. Here is a prepared comprehensive guide to the car insurance and all the details you need to aware of.
The concept of Motor Insurance
Do you know about motor insurance? The entire concept of motor insurance is based on the tagline “use it or you can lose it” policy. To take advantage of insurance, you have to pay the premium for insurance on a yearly basis. If you are enough lucky that you never meet with any type of accident, then the premium amount you paid on a yearly basis will be lost. On the other side, you are eligible to get a “no Claim Bonus” which is usually 20 per cent to 50 per cent of the amount. This is the reason why it is recommended to not claim for small damages.
The Insured Declared Value of the vehicle will decide the value of the insurance policy. IDV is the maximum value which is insured by the insurer to pay and it is approximately equal to the market value of the vehicle. IDV is calculated as per the listed price of the showroom when you purchase a new car from the showroom. However, the IDV is not stable all the time for the vehicle.
The IDV will decrease when you will renew the policy of car in future as the rate of depreciation increases between the one or two years. IDV is equal to the manufacturing listing price and deducts the cost of depreciation. Accessories are not included in the listed price of manufacturing. On the contrary, it is always recommended that do not quote the fewer prices as compared to the actual market value and the reason behind this is that if you pay the lesser premium, then you can also pay for the damages less. In addition to this, you need to renew the car insurance policy within a limited time to lower the risk of paying a high amount of penalties. This period is normally comprised of 90 days.
What cover under the Motor Insurance cover?
Numbers of factors are needed to be considered that cover under the insurance policy such as loss or damage of vehicle due to natural calamities, loss or damage to the car because of Manmade calamities, Personal accident cover and Third-party legal liability.
On the other side, there are some things that are not covered under car insurance such as when you drive anyone else’s car when someone is driving your car without insurance, damage caused due to alcohol or drugs, mechanical and electrical damage.
All these things are important to be considered when there is a need to purchase car insurance.