A car is a major investment in almost anyone’s life; some people spend years saving up to buy one, so they look for different ways to protect such an investment. The first option you will hear if you ask for advice is to get insurance. But do you know how it really works? There are an almost infinite number of options to pick from depending on location, company, type of vehicle, and many other factors, so if you need some help with that, we bring you some important facts you should know about car insurance.
- There are different types of coverage: Depending on what you need and what you can afford, insurance plans offer coverage for different situations. Most insurance contracts include coverage for collisions, natural disasters, vandalism, robbery, accidents of which you are responsible, and others caused by uninsured motorists, medical payments, and personal injuries. Some of these are mandatory coverage, while others are optional, you can choose which you will need.
- What determines prices: Each company has a different method to calculate the price of an insurance rate, but some factors are regularly taken into consideration, such as the area you live in (insurance in big cities is usually pricier), your credit, and driving history, your age and the model of your vehicle, and the deductibles and coverage you choose.
- Pay and renew on time: Missing payments and policy renewals can have very stressful consequences since you can lose your insurance. You will have to go through the insurance process all over again, wasting your time and money. If you’re not planning to drive your car for some time, contact your insurance company to see what can be done, but don’t just skip payments since, in the end, it can cost you a lot more.
- No claim bonus: It’s a discount offered by insurance companies when the owner of the vehicle doesn’t make any claims during the policy’s term. It can help you save up to 20% on your first year, 25% on your second, 35% for three years, and 45% on the fourth year of insurance. To keep this bonus renew your policy on time and pay for minor damages from your own pocket.
- Zero depreciation cover: When filling a claim, your insurance company will take into account the diminished value of the car, so they provide coverage for the depreciated value of the damaged parts instead of the current market value. A zero depreciation cover prevents this from happening, so you get coverage for the full cost of the damage.
Insurance policies offer help for many different situations and do it under different conditions, and with many exceptions, so they can vary a lot depending on many factors. Before getting car insurance, it’s better to take into consideration as many options and scenarios as possible and to understand how policies and rates work so you can make the best out of them and can actually get the protection you and your vehicle need.