The Advantages and Disadvantages of Car Insurance

Automobile insurance is coverage for automobiles, trucks, boats, and any other road-based vehicles. Its main function is to offer financial protection against financial damage or injury resulting from road accidents and from liability which can also arise out of vehicle-related accidents. It is compulsory for every individual, young or old, male or female, to have a minimum level of automobile insurance. It is the legal minimum requirement in many states.

The premiums are calculated according to the risk factors. There are five risk factors, they are age, type of vehicle, driving history, credit history, and such. For instance, if a person is twenty-five years old and he has been driving for just over ten years, then this would be a factor contributing to his high premiums and it might be impossible for him to acquire affordable automobile coverages. Therefore, it is best to choose the coverage that has more dollar limits, since young drivers may not be able to identify the best deals on policies with higher dollar limits.

A major factor affecting the premiums of automobile insurance from this articleis the claims history. If you have been involved in three or more claims within the past two years, your premium will definitely be on the rise. The main reason behind claims history is the failure to maintain proper discipline when it comes to driving. If you have been involved in three or more claims within two years, your insurance company may refuse to consider your application for an automobile policy.

If you are renting a vehicle, you are required to acquire a liability policy. One of the best ways to save on rental agency insurance is to make sure that you purchase a collision damage waiver. It can help you in the event of an accident. However, if you do not have a liability policy, your landlord will be responsible for the repair costs of your rental vehicle. See details here too:

It is a wise idea to purchase a rental agency liability policy in the event of an accident. You are not required to drive the vehicle for two days following the accident. You can get two days coverage through the rental agency and have complete peace of mind. In case of an accident that causes damage to your rental car, you will be responsible for the repair cost. If you have not purchased a liability insurance policy, the rental agency will not pay for the damage to your vehicle.

Hit-and-run insurance pays to repair a vehicle in the event that it is damaged by an accident caused by the driver of another vehicle. When you are driving in an area where hit-and-run accidents are common, it is important that you do not endanger yourself. Insurance coverage pays for repairs to your car or to a property that you hit with a vehicle if you are hit by a motorist who did not have insurance. Car repair shops pay to repair a car that has been damaged by a hit-and-run driver. You may read more here.

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