Car insurance is essential for every car owner. One cannot afford to ignore the car insurance coverage whether it’s mandated by law or a personal decision. The potential accident costs, repairing cost of the car and the medical expenses of the victim are too huge to take the risk of running without auto insurance.
Car insurance policies types
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Third-party liability
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First party/ comprehensive insurance
The first party is the owner of the policy who contracted with the insurer - the second party - for the coverage. The third party is the accident victim or person whose property is damaged by the policy owner. Therefore, the first-party insurance covers damages happened to the policy-owner or his/ her car passengers. The third party liability insurance covers harms done to other person who is attributable to the policy owner.
The third party liability auto insurance policy can further be divided into two – bodily injury and property damage. And this needs to be renewed every year. The insurance premium in all car insurance policy types, however, depends on some factors such as vehicle value, vehicle classification etc. In most of the cases, some amount of third-party liability is entailed by law.
Auto insurance terms or clauses
There are several car insurance terms or clauses that one needs to know. This will help you claim for any repair or damage happened with your insured vehicle due to -
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General wear or aging of the vehicle.
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Any substantial loss or mechanical breakdown.
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Wearing of tires, tubes or any other part.
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Insured vehicle is used for any other purpose that doesn’t mention in the limitations of usage in the agreement.
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Vehicle is used or brought outside of the country.
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Driver doesn’t have a valid license.
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Driver found under the influence of liquor or drugs.
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Loss/damage caused due to mutiny, war or nuclear risk.
Auto insurance policy or coverage provides protection against damage or losses encountered due to any of above mentioned reason.
