If you own a car, you and your friends no doubt very often complain to each other about the astronomical cost of car insurance. Especially if you have never had an accident, you might feel that you are subsidizing bad drivers with your high premiums. Perhaps it is time that you consider the different types of insurance available out there – you might be able to reduce your premiums markedly by switching to a different type of policy. Below is a basic auto insurance comparison.
Fully comprehensive car insurance
This is the most expensive type of car insurance available. If you, like most of us, had to use finance to buy your car the finance company would have required you to take out this type of insurance. It basically covers every type of mishap that can hit you as a car owner. You will be covered if you drive into a brick wall, or if you collide with another car while watching a pretty girl on the sidewalk.
You will also be covered if someone steals your vehicle, or if it inexplicably catches fire. Not only is your losses covered, but claims that other drivers can have against you after an accident will also be provided for.
Many insurance companies refuse to insure the full value of a vehicle though. According to them it encourages people to submit fraudulent claims. You might get tired of your old car for example, and simply drive it into a concrete wall, or set it alight. They often therefore only insure 80% of the value of the vehicle, and you still have to carry the risk for the other 20%.
Third party, fire and theft insurance
This type of insurance falls midway between comprehensive insurance and third party insurance. A very important aspect to remember with this kind of policy is that it only covers you in case you hit another vehicle and you are responsible for the accident. If you are not responsible, the insurance company will not pay out.
You will also be covered if your car is stolen, or if it should burn out. This does not include you setting it on fire though!
Third party vehicle insurance
This is the cheapest type of vehicle insurance. One will very often find that people owning a very old vehicle with little market value choose this option.
It does not cover you in case your car is stolen, or burns out. It does not cover you if someone else drives into your car – you will then have to sue the guilty party. It only covers you if you drive into someone else’s car. You therefore have to be the guilty party, otherwise no payment will ensue.
It does, however, cover you if you drive into the mayor’s Rolls Royce.
Now that you know the different types of vehicle insurance policies available, and you have studied the basic auto insurance comparison above, you should be in a better position to make a decision on how to decrease your monthly insurance cost.