Car Insurance-Must-Know Facts

1. Car Insurance-Must-Know Facts Car insurance refers to an insurance plan that provides complete protection to you and your vehicle against any loss or damage you may incur because of driving the insured car on a public road. The loss could be due to several reasons like theft, fire, accident, etc. You must know how your car insurance policy works before actually buying it. First, let us understand why you should buy a car insurance policy. Need for Car Insurance In almost every country, the law mandates that you buy an insurance policy for your car. It also stipulates the minimum amount of insurance that you need to have for your car. One of the reasons why you should buy a car insurance policy is that it helps protect other road users against any accident caused by you while driving on a public road. Several motor insurance agents deal with car insurance. Though this gives you a wide range of options, it also makes it difficult for you to find a suitable plan quickly. Car Insurance Coverage Car insurance coverage is of two types- Third-party car insurance and Comprehensive car insurance. Let us understand how this works. a) Third-Party Car Insurance Third-party car insurance refers to coverage against any legal liability that may arise from an accident caused by your insured vehicle. The loss/damage could be to third party property, or the accident could result in injury /death of the third party. In most countries, third party liability coverage is mandated by law. For instance, in India, this comes under the Motor Vehicles Act. You can also get motorcycle insurance online under this Act. b) Comprehensive Car Insurance Plan A Comprehensive car insurance plan is essentially made up of three aspects. Firstly, it provides coverage against any loss or damage to your car. Next, it provides coverage against any third-party liability, and lastly, it provides personal accident coverage to the driver/owner of the car for a minimum sum as stipulated by law. Original source- blogger.com