Car Insurance

Car insurance, slightly different from auto insurance, refers to the insurance for personal cars. Auto insurance refers to the insurance for various types of vehicles including the vehicles manufactures for official or business use, whereas Car insurance refers to the insurance policy purchased especially for the personal car owner.

How does Car Insurance work?

Insurance based on the car:

The Insurance policy is determined based on the price and brand of the car. If the car belongs to a high-end brand or to a brand which uses high-end materials for bumper, and windshield, the price of the insurance premium will be high. The premium also depends on the model of the car you own and the year you have purchased as the depreciation is supposed to be calculated according to which the terms and conditions for the policy are made.

Credit score:

The terms and conditions of the policy along with the eligibility for the insurance is also checked based on the credit score you have. For this, you have to make sure that you can manage your expenses well and can balance the debt you have to pay for the premium and your daily expenses. This also helps in determining where you lay in the demographic segment and which policy would suit you the most.

Coverage for damage:

The coverage policy is further divided into two-part, Comprehensive and collision. Comprehensive coverage refers to the damage occurred due to natural disaster like earthquake, flood, fire and more. It also includes theft, vandalism and damage occurred due to tree or a rock falling on the car. Whereas, collision coverage refers to the damage occurred due to a collision with another vehicle or a car.

Policy can be cancelled by the insurer:

If the personal vehicle is found being used as a business vehicle or as a cab, the insurer has the right to cancel the policy. While cancelling the insurance policy, some plans include that the premium paid till date will be given back to the owner whereas some indicate that the insurer has the right to keep the money since they were providing benefits to the insured vehicle. Therefore a personal vehicle should not be used as an official vehicle.

These days it is easy to apply for personal car insurance as there are apps where you can just upload all the required details and purchase the insurance at one go, without any hassle. Through this method, many consumers can compare various plans within a couple of minutes and can choose the right insurance policy for themselves.