Your Guide to Car Insurance

Saturday, September 5, 2009

As per the U.S. laws, Car insurance is mandatory at the time of purchasing the vehicle, whether it is a brand new car or it is a pre-owned car.
Since a lot of insurance companies are available in the U.S. and all of them claiming to be the best in terms of service and premium charges, it becomes a little confusing to decide which Insurance company and which policy to choose.

A careful understanding of factors relating the car insurance can help you save the money in premium and also help to get the best quote and value for your money. Insurance is not an investment, as no returns are fetched. However, you can call it a necessary evil, one that you cannot do without. The utility of the car insurance is completely understood only when an untoward accident occurs, or when the vehicle is damaged.

Car insurance can be classified broadly into four categories.
1. Third party insurance- This is the basic insurance available. The .premium is relatively cheap. This insurance is compulsory in most states in the U.S. In the state of Virginia, the car owner has to pay the state an annual fee of $500 per vehicle, in case the car owner does not avail a third party insurance. Whereas, in New Hampshire, it is not compulsory to buy a third party insurance.
2. Compulsory third party- This is the registration fee required to be paid to get the cover against any physical damage or injury and medical claims to the third party, if you are found guilty in an accident.

3. Third party, fire and theft- This protects you in case you cause damage to some one else's vehicle. It also protects your vehicle against theft and fire.
4. Comprehensive insurance. This is an all inclusive policy. It protects you and your car against all the possible damages-loss, theft, fire, accident of your own car, damage to another person's vehicle or property, damage or death of the driver in the other car,
Buying a comprehensive insurance policy is mandatory in case you opt for a loan to buy your vehicle. The premium is generally high in comprehensive policy as compared to the third party insurance, as the coverage is vast and extensive.


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