Fear of loosing something is as naive as human being itself. Humans knowing that they can’t avert the happenings, found a way out. They stumbled upon the idea of mitigating the effects of the losses by Hedging against uncertain losses before hand that was when the concept of “Insurance” got highlighted and brought to rampant use thereafter. Once Automobile revolutionized the way we commuted and the use of automobile on public property increased significantly “Car Insurance” became the norm. Car insurance aimed at briefing up the security of third party against body damage or property damage, against loss in case of theft and cost of treatment and such in case of accidents. In 1895, an English company first issued car insurance liability policy.1898 was the year when the policy was first sold to Truman. J. Martin in the United States. Massachusetts in 1927 became the first state in the states to make car insurance mandatory by law. In United States of America every state has their own rules and regulation for car insurance.
Types of policies:
The extent to which an insured is protected depends on the type of policy he has purchased. The following are the various types which can help one to choose for themselves according to their own needs
This is the basic coverage which covers the insured for body loss or property loss. There is a minimum coverage prescribed by every state but the insured can increase the coverage above the minimum level at additional cost given the condition he does it before the loss takes place. The examples stated below would make it even more clearly for the understanding.
Sam is driving his lovely car and enjoying the ride to the core. A hot chic is passing by and Sam’s flirty eyes tries to catch the glimpse of the sexy chic and in the process rams his car into the stall of the Michael selling hot dogs. Fortunately Michael was at a distance and was unscratched by the accident but his stall was damaged. This will be a case of property damage where Sam becomes liable for the damage to the stall and also for the loss of the business arising due to the accident.
Now suppose Michael was present at the stall when Sam rammed his car into his stall and Michael suffered injuries because of this then Sam would be liable for bodily injury. In some states Michael would have to first consume the coverage for accident benefits through his own insurer assuming Michael has his own policy or he has to be synonymous with the legal definition to claim rights to have the benefits from Sam’s policy.
In the above example Sam is first party and Michael becomes the third party.
Named operators policies:
This is a policy which insures those who don’t own a car and drive some one else’s car. It is also known as Non-owners policies rightly. It is also of great help to those whose license has been suspended and they need a license to reinstate. For example Sam doesn’t own a car and drives car which belongs to Tom then Non-owners policy is the policy that Sam should choose.
It implies that all the losses are paid under a single coverage. It includes loss to property as well as bodily losses. Taking the earlier Example as base Michael gets the insurance for his loss of property that is his stall and also gets compensated for his injuries because of the accident in a single payment under the same coverage.
It implies that property loss and bodily loss is splitted in two different coverage. Taking the earlier example as base Michael will be entitled to the compensation in two different coverage of property loss (Stall) and bodily loss(injuries).Bodily loss will be further be splitted into maximum payment per person and maximum payment per accident. Taking the example further if Michael is entitled for the compensation it would look like the following.40/80/30.Here the figure before first slash represent the maximum payout for a single person in this case Michael would get $40,000 ,the second figure before slash represents maximum payout to a group of people in this case if Michael was along with other people and faced injuries or death due to accident then he would be entitled for $80,000 and the third figure represent the maximum amount for the damage of the property in this case Michael receiving $30,000 as compensation.
Factors influencing the premium of the policy
There are many factors which influences the premium we pay for the insurance. Age is one of the factors which influence the premium of our policies. The people in the age bracket of 18-25 are charged more premium as this age group is considered to be harsh drivers whereas people beyond this age are charged relatively less premium. Car insurance people attach wisdom with numbers strange but true. Marriage is also a deciding factor. People who are married are charged less premium as they are deemed to be responsible drivers whereas people who are single are relatively charged more premium. Now you know why you shouldn’t be single and should have already mingled. Credit history is also an important decider for the premium. Credit points can range between 300 to 850.Here 300 being the lowest and 850 being the highest.600 to 700 is considered decent and above 700 a good track record. Being regular with your payments, avoiding unnecessary credits and having control over your credit is the basic way of getting good credit points thus paying less premium.
The above article tries to unearth few facets of car insurance out of a pool of information. In a nut shell maintaining a healthy driving habit, possessing good traffic sense and having a car insurance can help you zip zap all the worries and drive home safely and smartly.
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