Car Insurance Basics

Accidents can do both physical and financial harm. This is why you need car insurance before you get your new car on the road. Car insurance or vehicle insurance is insurance purchased for cars, vans, and other road vehicles that use is to provide protection against loss due to theft or traffic incidents.

It is compulsory to buy car insurance to drive on public roads. When buying car insurance, the customer is protected depending on the type of coverage purchased. The customer will pay premium to the insurance company according the terms and conditions.

Your insurance certificate must contain the your name and address, the vehicle registration number, the start date of cover, and the date of policy expiry. If there are any restrictions or limitations, they will also be included. It will also give you a list of any other vehicle you are allow to drive.

Liability insurance is a part of the general insurance system of risk financing to protect the insured from the risks of liabilities imposed by lawsuits and similar claims. It protects the insured in the event policyholder is sued for claims that come within the coverage of the insurance policy. In another word, liability insurance covers claims against the policyholder. If the address of such drivers or operators is same as that of the policyholder, then they must be specifically covered on the policy. Liability insurance does not protect the policyholder if he drives a car not his own.

Comprehensive insurance is designed to covers replacement or fixing of the policyholder's car in the event of damaged by incidents that are not considered collisions. For example, vandalism, floods, fire, theft, weather, or impacts with animals are classified as comprehensive losses.

Collision coverage is an insurance that promises to pay for the repair the damaged car or payment of the cash value of the vehicle if it is not repairable of the policyholder's car that is involved in an accident.

Gap insurance was created taking into consideration the forever increasing cost of cars, extended term car loans and increase in the number of leased cars. Gap waivers provide protection for customers when a 'gap' is formed between the actual value of the vehicle and the amount of money owed to the bank. It is provide protection to consumers based upon buying and market trends.

Once you have determined what your car insurance needs will be, it is important to ask around to find the right company and agent for you. Price should be a consideration, but you should also check into their reputation for handling claims promptly. The most important is the company you have chosen must be authorized by government.