Tuesday, 21 February 2012

Guest Post : How Automotive Insurance works ?

Automotive insurance is very effective and can provide protection in times of unexpected occurrences. It protects the insured from the financial loss associated with an auto accident and, as a result, helps the insured person avoid huge personal expenses. These plans also provide benefits that save drivers money and time, car rentals and lawsuits, as well. Automotive insurance is required in most states for vehicles to be on the road.

How Automotive Insurance Works
Automotive insurance works like life insurance, health insurance and almost all other types of insurance. Automotive insurance companies provide liability coverage to the insured in certain amounts. They also have certain limitations in exchange for a fixed payment called a premium. They cover many different auto owners and gather their premiums into one large fund, which ensures that the insurance company will have money in the general fund to pay for any claims made by one customer

Automotive Insurance Premiums
An insurance premium is the amount of money an insured person pays to his insurance company for active coverage. Premiums can be paid monthly or yearly, though monthly payments are the industry standard. Insurance premiums can vary significantly among insurance companies, depending on criteria such as gender, age, driving record, the car's make and model, geographical location, and coverage amounts. This is why it is advisable to get several quotes before choosing an insurance policy. When you apply for insurance, insurance brokers or agents will take your information and calculate the insurance premium you will charged based on several factors. Several quotes are usually provided to you so that you can make your choice. If you fail to make a premium payment by the due date, the insurance company can decide to cancel the policy entirely.

Types of Automotive Insurance Coverage
All automotive insurance is not the same. There are different types of coverage available. These coverages include comprehensive, collision, liability, uninsured motorists, and medical
* Comprehensive coverage helps pay for all expenses or losses to an insured vehicle, generally up to the limit set in the insurance policy. Comprehensive automotive insurance will cover acts of vandalism, or damage caused by a hit-and-run driver. Other events which are usually covered by comprehensive insurance include earthquakes, fires, floods and other acts of nature. Theft is also covered by comprehensive automotive insurance coverage.
* Collision coverage, on the other hand, doesn't cover nearly as much. Collision coverage will pay for the repair of damages due to a car accident you cause. But if it was the other driver's fault, then their insurance policy will be responsible for the cost of your car repair.
* Liability covers damages an individual causes to another individual's vehicle or body.
* Uninsured motorist pays for damages to your car when an automobile accident is caused by someone who doesn't have liability insurance.
* Medical covers injuries to the people in the insured vehicle that occur due to a covered auto accident. Rental covers the cost of a rental car and towing for a tow truck. You can also add features to cover roadside assistance and car rentals. Many insurance providers will have some differences in their policies, of course, so it is important to do some research to know exactly what is or isn't covered.

Drivers who have automotive insurance plans can use their insurance coverage on rental cars. This will help the drivers save money, instead of paying for the rental car insurance which provides essentially the same coverages. But, before deciding to use your personal automotive policy, you should make sure your plan has enough coverage to pay for damages; you would be liable for all expenses that exceed your coverage limits out of pocket. Also, if you are involved in an auto accident, your policy's premium can be raised as a result.

Ron Belham (www.keyinsurancequotes.com) with over 30 years of experience.


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