It is important to get a motor insurance when you buy any motor vehicle, be it a motorcycle, a car or a lorry. If you want to drive your vehicle on road, you can’t afford to stay uninsured. Motor insurance protects your motor vehicle against thefts and accidents. Here’s what you need to know before you buy a motor insurance.
Types of motor insurance
There are 3 types of motor insurance available:
1. Third party only – This provides you with the minimum coverage required by law. It covers you against third party liability risks which mean that in the event of an accident caused by you, the cost of damages to the other vehicles or injury to other people is covered.
2. Third party fire and theft – In addition to the third party claim, it provides coverage against theft and fire.
3. Comprehensive – Also known as fully comprehensive, this is the widest form of motor insurance cover available. It protects you against fire and theft and pays you for any damage caused to your vehicle regardless of who caused the accident.
Premium cost
Depending on the amount of risk involved, the premium cost varies. It can be determined by the following factors:
• Age – The younger and less experience you are as a driver, there is a greater risk of your getting into an accident and making a claim on your policy. So, higher is your premium.
• Size of engine – The more powerful a car is, the greater is the chance of getting into a high speed accident.
• Car value – The cost of the car, make and model is an important factor. Some cars are cheaper to repair due to easy availability of parts than the others. Premiums are higher for expensive vehicles.
• Driving record – Your driving history determines your risk factor. If you have made too many claims in the past, the insurance company would consider you as a high risk driver and you’ll have to pay excess premiums. If you have any penalty point on your license like speeding ticket or driving under influence, you’ll be charged a much higher premium.
Motor insurance is a legal requirement in most of the states. Make sure that the amount of motor insurance reflects the market value of your vehicle to avoid over-insurance or under-insurance.
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