What Types of Car Insurance Should You Hire?

Hiring vehicle insurance is not an easy task because there are different types of car insurance. Keep in mind that hiring car insurance is required to be able to circulate, so the user must choose the one that best suits his needs.

What is a policy?

policy is a document in which the terms that regulate the insurance of the car being established all the coverages and assumptions which the insurer company guarantees in case of an accident, in addition to the compensation and personal data or information about the vehicle necessary to fix the car insurance.

Therefore, when it comes to hiring car insurance the question, we must ask ourselves is what kind of insurance does my car need? Not all insured persons have the same needs as there are those who need a minimum coverage because they perceive a very low risk of loss, some choose to fully insure their new vehicle or, on the other hand, the ones that prefer an intermediate coverage whatever their reason is.

Types of Car Insurance

Among the different types of car insurance, we can find the following coverage:

  • Third-Party Car Insurance
  • Extended Third-Party Car Insurance
  • Comprehensive Coverage Risk
  • Comprehensive Coverage Risk with Franchise

Third-Party Car Insurance

The third-party car insurance guarantees the material and personal impairments that the driver perpetrates to a third party. The damages suffered in the insured’s vehicle are not covered.

The third-party car insurance is covered by the Mandatory Liability insurance and supplemented by Voluntary Liability insurance.

Extended Third-Party Car Insurance

The extended third-party car insurance complements the third-party car insurance with other attractive guarantees for the user. As a result, the Extended Third-Party car insurance allows you to contract additional coverages such as theft, fire, or broken windows among others.

Comprehensive Coverage 

Comprehensive car insurance covers all material and personal damage possible both to third parties and occupants own the culprit vehicle of the accident. It is the most extensive and expensive insurance as it has additional advantages such as the replacement vehicle.

Comprehensive Coverage with Franchise

The Comprehensive Coverage with Franchise is shared responsibility insurance, which means, that a certain amount is fixed, called a franchise, that is borne by the insured and to which is applied for the Own Damage coverage. Therefore, the insurer company only has to pay the difference between the damages suffered and the amount of the franchise.

Comprehensive Insurance Risk with Franchise is the most economical, but it is not appropriate for drivers who have minor claims.

Affordable Auto Insurance Can Be Lost

What can go wrong?

The first problem is listening to the wrong advice. If you were to go and ask an insurance agent how much insurance to carry, the answer would give the agent the best possible commission on the deal. In other words, agents are offered cash rewards if they sell you the maximum possible amount of insurance, regardless whether you need it. So, when you are deciding how much insurance to buy, you should always take a practical view of the amount of cover and whether that offers good value for money. Sometimes, the basic minimum is all you need.

Buying the wrong vehicle

Some people buy something they think fits their image without asking how much it will cost to insure. Equally, others forget to ask how much their vehicle costs to repair. With some imported cars, the price of spares is significantly higher than for cars made in local factories. The higher the cost of repairs, the higher the insurance premium. Similarly, the more likely someone will steal your vehicle, the more comprehensive coverage will cost you.

Failing the drive safely

Driving is the one thing more or less under your control. Although you can never guarantee to avoid being hit by someone driving like a lunatic, you can always drive within the speed limit and cut out all the reckless behavior. Do that and avoid claims, your premium rate will remain affordable. Rack up speeding tickets and get into accidents, and your rate will take off like a rocket. It’s your choice.

Not keeping an eye on your credit score

The majority of insurers watch your score. If it falls, your premiums tend to rise. But a recent survey found 80% of credit histories contain mistakes. Many of these result in poor scores. You have a statutory right to free copies of the histories held by the three largest credit referencing agencies. If you find a mistake, you also have a right to have it corrected. Doing so may result in a higher score. If so, the premium will usually fall.

Being prepared to change insurers

You may be surprised, but the vast majority of people renew their policy on auto-pilot. Failing to look for alternate insurers denies you those welcome bonuses. It’s up to you to find what the market has to offer and act rationally, i.e. change insurers when the deal is right.

Conclusion of the Different Types of Car Insurance

It is important to keep in mind that each company establishes its policies according to its criteria, so they will vary depending on the insurer company. When it comes to hiring car insurance it is necessary to consult with it any doubt and to read carefully what it is that is going to be contracted without exceeding the needs of each one.