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Auto
insurance policy overview and information.
DIFFERENT TYPES OF AUTO INSURANCE
If you own a
car, no doubt you’ll understand when people sit
around complaining about the cost of their car
insurance. But, the fact is that the cost of you
car insurance is going to depend as much on what
type of car insurance you buy as it is on what
insurance company you use to insure your car.
So, what are
the different types of auto car insurance
options available?
Auto
Insurance Policy Types
Fully Comprehensive Auto Insurance
Fully comprehensive auto car insurance
is without doubt the most expensive. However, with so many cars financed by
finance companies, it is also probably the most common type of auto
insurance – as the finance companies make it a requirement that the owner
insure their automobile fully comprehensive.
In short, as its name suggests, fully comprehensive auto car insurance insures
the owner of the car against all manner of events – from an accident to theft of
the car. The upside of this type of insurance is there is no need to show
‘fault’ in order to claim. So, if you have an accident, which is not your fault,
and the owner of the other car, who is at fault, doesn’t give you his insurance
details, or, worse, is uninsured, you can still claim against your insurance
company. Similarly, if your car is stolen, then fully comprehensive insurance
allows you to claim against the insurance company.
However, do read your insurance policy carefully, as most auto car insurance
companies refuse to insure 100% of the value of a car, choosing instead to only
insure 80%, or so, of the value. The auto car insurance companies claim that
doing this prevents fraudulent losses of cars where the owner of the car either
no longer wants the car, or is encountering financial difficulty.
Third Party, Fire & Theft
Third party, fire & theft auto car insurance is a middle of the road car
insurance package popular with those who have already paid off their auto loans,
but who still have a certain level of intrinsic value in their car.
Under this type of auto insurance, most of the pay-out events covered under
fully comprehensive auto insurance are covered – such as fire & theft. However,
in the event of an accident, the insurance company is only required to pay-out
if you are at fault, and you hit another car. So, in the event that you hit a
wall, or only damage your car, the insurance company will not be required to
pay. Likewise, if you are involved in an accident with another car, and are not
at fault, your insurance company will not be required to pay-out, regardless of
whether or not the other person has sufficient insurance to pay for the damage
done to your car.
Third Party Insurance
Third party insurance is the ‘basic’ type of insurance, and only covers
circumstances where you are involved in an accident, are at fault, and hit a
third party. In all other events, the auto car insurance company is not required
to make a payment. As such, it is also the cheapest type of auto car insurance
you can purchase. That said, this type of insurance is usually only purchased by
those car owners who have an old car with little or no value.
Specialized Car Insurance
Finally, strictly speaking any car over 25 years old is considered a ‘classic’.
As such, this type of car should be insured as a classic car – with all of the
benefits and requirements of such. Although ‘classic’ auto car insurance usually
has all of the benefits of fully comprehensive auto car insurance, one
significant disadvantage that classic car insurance has is that you are usually
limited to the number of road miles you can drive in any given year – so check
your policy carefully.
Auto
insurance policy overview and information.
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