Every car owner should have car insurance for their vehicle. Although you wish you would never have a need for it, knowing that you have insurance coverage for any eventuality would give you piece of mind and put a lot of worries to rest.
Car insurance can cover not only you and your car, but also any damage to other vehicles or property that might be caused by your vehicle when it is involved in an accident. Car insurance would therefore guard you from expenses that you might otherwise have to pay from your own pocket.
Car insurance is very similar to other kinds of insurance and the primary motive is to reduce financial risk to you. But since a large amount of money is involved, the insurance company would want to guard its interests first. Therefore, every car insurance company would assess its own risk while providing insurance to a particular individual based on the type of vehicle they possess, its age and condition, the driver’s age and health condition, their driving history and a number of other relevant factors. When the financial risk to the insurance company increases, it would cover for the risk by charging a higher premium for providing insurance to the individual.
Certain types of cars possess more financial risk for the insurance company than others. For instance, sports cars which can travel at high speeds are more prone to accidents than family sedans. Fancy cars which are more expensive are also likely to be stolen and would therefore present a greater risk. The age and experience of the driver is another major factor that would influence the rate of insurance. A younger driver with less experience is usually more prone to accidents than an older, and more experienced driver. But even an older driver with experience but with a history of accidents would be a threat to the insurance company. Therefore, the company would charge higher premium rates for such individuals.
Most car insurance policies would require an excess at the time of claim. The excess is the amount that the insurance owner has to pay while filing the claim, and the company would pay the remaining amount to cover damages. Every year that goes by without a claim, the insurance owner will be able to build up a no-claim bonus, which will effectively reduce the premium amount.
Therefore, getting insurance for the vehicle and then maintaining a good accident-free record can help you get lower premium rates and better coverage for you and your vehicle.