Many people do not understand the value and importance of automotive insurance until they are involved in an accident. As a result, they continue to drive without insurance, which in many countries is illegal. Car insurance in UAE and many other countries is mandatory. Such countries have mandated a minimal amount of insurance that every car owner must-have. Driving without one is considered a grave offence and can you land in jail along with a hefty fine.
Even if it is not illegal in your area, there are plenty of reasons to get it. For instance, we all know how Dubai is famous for its luxury and exotic cars. Now, imagine driving around with Best Car Insurance Policy and ramming into a limited edition Lamborghini. Surely, not everyone can affair the repairs, right? This is where car insurance comes in.
It offers protection during such accidents. In addition to covering the repairs for the aggrieved party, the insurance provider will also take care of your repairs and medical bills. However, it all depends on the insurance policy that you have taken out. Nevertheless, let’s get back to our topic for today.
In the following paragraphs, we will discuss the top things to know about car insurance. With this newfound information, you will know all there is to know about car insurance.
1. Different Types
There are different types of car insurance. Their names might vary but their essence stays the same. The two most common types are – third-party liability and comprehensive. In the first type, only damages to the third party are covered. In short, any damages to your vehicle or personal injuries will not be covered by this policy. In the second type, as the name indicates, damages to the third party along with yourself are covered. Many providers offer special policies where hospital bills, natural disasters, theft etc. are also covered. To know more about what is covered, you will need to talk with the insurance providers in your area.
2. Prices Vary
Different companies will offer different rates. Insurance is like any other commodity. By asking around and going to different companies, you can get pretty good rates. Never underestimate the importance of inquiring around. In addition to this, continuous interaction with insurance-related people will give you an idea about how insurance works. You will also be able to understand their jargon, which again can help you get a better deal. As insurance is a cutthroat business, many providers offer a variety of discounts to attract customers. You might know about these offers until you ask around.
3. External Factors Determine The Premium
Taxes, the overall insurance market, repair costs, prices of replacement parts, climate and various other external factors also determine the insurance premium. If the government decides to increase the taxes on the insurance industry, the insurance providers would have no choice but to pass on the increase to the customers. This will drive your insurance premium further up. On the other hand, if the government reduces taxes, it will drive the premium low. Likewise, the costs of repair and replacement parts also determine the premium. If your vehicle has costly replacement parts, then the insurance provider would determine the premium while keeping this data in mind.
4. Your Driving Habits Matter A Lot
The way you drive your car along with other driving-related habits will have a considerable impact on the insurance premium. For instance, if you are a frequent driver, the premium will be higher. The reason is simple. A car that stays on the road longer is more likely to be involved in an accident than the one that is not driven so frequently. In addition to this, if you have been involved in an accident previously, it will drive the premium higher. Many insurance companies install telematics products in the car. This gives them an idea of driving miles and your driving speed. They will use this data to determine the premium. Driving at high speeds is associated with higher risk. A risky driver is more prone to accidents.
5. Type Of Car Determines The Premium
Certain cars are more prone to accidents than others. Likewise, several makes and models are quite popular among car thieves. The insurance providers have large amounts of data pertaining to this. Therefore, they know which car is the most likely to be involved in an accident or be stolen. Similarly, they know which car is the safest and least likely to be involved in a claim. In short, the type of car you own will have a big impact on your insurance premium.
6. You Can Get Discounts
Many people believe that there are no discounts available when it comes to insurance. One reason is that many people are afraid to ask for it. If you do not ask for something, you cannot get it. It is that simple. Therefore, while finalizing a policy with an insurance company, ask for discounts. You can also get a no claims discount which means that if you have not filed a claim for the past years or so, you are automatically eligible for a discount. In addition to this, you can get discounts based on your driving history and even the type of car you drive. Make sure to inquire about all the types of discounts to get a better idea.
7. Frauds Are Possible
You can get car insurance online in UAE and numerous other countries. The internet is not without its dangers. Buying anything online increases the risk of fraud. Therefore, make sure that the company you are trying to buy from is licensed. If a policy sounds too good to be true, then it is. Insurance is also a business and the goal of each purpose is to make a profit, right? So, avoid too good to believe types of policies. In addition to this, there are many fake insurance brokers in the market. They might steal your money. Always ask about the broker’s licence before making any deal with them.
M Junaid Lead Writer, Content Marketer at PitStopArabia, A writer by Day and reader by night