This may seem funny to you, but you must believe me when I say: My ex-girlfriend dumped me because I didn’t know enough about car insurance.
After I accidentally hit someone on the road, I realized two things the hard way:
Number one, not having proper car insurance can cause very expensive lawsuits.
And number two; expensive lawsuits can often result in breakups.
Well, there’s nothing I can really do about that minor mishap now. Can I? And honestly, some people are better when gone. But, now I realize that even though I failed to save my relationship, I could have saved a lot of money if I would have done a little more research on car insurance before purchasing the insurance policy. But I didn’t have anyone to help me out. And with this world gradually becoming this fast, we take decisions much quicker than we should.
For example, now that I don’t have to go visit the court regularly, with the lawsuit from my little accident finally over (which by the way, has left me a little poorer than I would like to be), sometimes, well honestly, most of the times, I think about my past choices. Maybe I should have slowed down a bit and really thought about the kind of person I was going out with. Or most importantly, in this case, I should have purchased better and more comprehensive car insurance. But the sad truth is, that there is nothing I can do about all that except for learning from my past mistakes and moving on. However, I feel exceptionally generous today (just kidding!) and I just want to share a bit of what I have learned about car insurance over the years so you can save yourself a lot of trouble and a hell lot of money.
So, here’s me, sharing my knowledge of car insurance after having spent years in the insurance market.
Choosing an Insurance policy becomes a lot easier with us being well versed in the policies out there.
Usually we end up with the wrong insurance policies and realize it too late when our claims are rejected. This happens because we choose policies without having thoroughly researched them. And honestly, after having researched so much about which car to buy, I wouldn’t blame you if you buy an insurance policy for your car without doing extensive research.
To make it easier for you, I shall break down to you the various kinds of motorcar insurance policies out there in the market. So that when you have finally bought your dream car, you make an educated choice about the insurance policy which covers your darling ride.
Types of Car Insurance
1. Third-Party Insurance
In simpler terms, a third-party car insurance plan provides coverage against any legal liability arising out of injuries to a third-party when the policyholder is at fault. It covers damages and injuries caused by the insured vehicle, to a third-party person or property.
Let’s take, for example, you while driving, accidentally hit another car, which causes property and physical damage to the other car owner (here, property being the other driver’s car). Now, this insurance policy helps you to cover the damages caused to the other driver by you.
In some places we usually refer to this insurance policy as Collision Insurance. It covers us against any damages we cause to life and property (sometimes accidents result into deaths; you see) with our car while driving it.
With that, one can feel that it’s enough to just have a Third Party Insurance policy and we are ready to hit the road. But hey, what about the damages caused to your own vehicle and self?
That’s where comes in the second Car Insurance Policy.
2. Comprehensive Insurance
A comprehensive car insurance policy covers third-party damages and own damages caused to your car. It pays for damages incurred by unforeseen natural calamities such as cyclones, earthquakes, floods. It also safeguards the insured car from man-made disasters including theft, accident, incursion, burglary, fire, etc.
You can further strengthen the coverage by selecting additional covers, such as engine protector, accessories cover, medical expenses, zero depreciation cover, etc. This cover is widely popular, as it offers full-fledged coverage and it leaves the policyholder stress-free.
A comprehensive car insurance plan includes coverage for fire, theft, natural and man-made catastrophes, such as a tornado, hurricane vandalism, damage caused to your vehicle by animals, falling objects, civil disturbance, such as a riot that causes damages to your car.
One might again feel that this is the best kind of car insurance out there, but we are not done yet. There’s much more you need to consider before choosing car insurance.
3. Zero Dept Insurance
Zero dept insurance cover, also known as Zero Dep policy, is a type of insurance cover which offers complete coverage without subtracting the depreciation value of the vehicle. This means that if your car gets damaged in an accident, you will receive the entire cost which you had to pay when you had bought it, from the insurer. But this coverage is not valid for a long time; it remains applicable for a span of maximum 5 years.
4. RTI (Return to Invoice)
Return to Invoice is an add-on option that covers the gap between the insured declared value and the invoice value of your car along with the registration and other applicable taxes. RTI helps you in claiming the purchase value (on-road price) of the car in case of theft or total loss. RTI is only applicable if your car is damaged extremely and becomes unusable, and the cost of repairing the damages is more than 75% of the IDV. For small damages, RTI is not applicable. RTI also comes in handy in case of theft of the vehicle.
If not your relationships, I hope this information I have gathered for you helps you to save some money. You must always remember that educated choices are better than quick choices.