If you already have a car or are thinking of buying one, you should already know how auto insurance works – or at least know that you’ll need one. But do you know what are the different types of insurance on the market?
Knowing the different types of auto insurance and their coverage is an important step in getting the right policy for you. In this article, we will introduce you to the most basic types of car insurance, how they work and what they cover.
What types of auto insurance are there?
Having auto insurance is not just a preventive issue. Driving without insurance is considered a serious offense. Not only will you get a huge fine, it will remove 2 points from your driving license – and it may also imply a temporary driving ban.
With good auto insurance, you can save thousands of euros. This will help you cover the damage of your vehicle in the event of an accident, as well as the damage it can cause if you hit someone. If you do not have insurance, you will have to pay a fine and bear all the costs of the accident. Therefore, prevention is the best strategy.
If you are running an auto workshop , let your customers know the importance of good auto insurance. They will appreciate to know that you are also knowledgeable about this subject and that you care about their safety and well-being.
To better understand your policy, there are several terms you should know:
• Coverage: protection and benefits provided
• Limits: maximum amount of protection for a specific coverage
• Policy: contract between you and your insurer
• Premium: price of your insurance policy
• Deductible: part that you pay out of your own pocket, if you make a complaint
When comparing insurance rates, make sure they are for the same coverage, deductibles and limits.
Before contacting an insurance agency, you should know the types of auto insurance that exist on the market:
1. Civil Liability Insurance
This type of auto insurance is mandatory and includes:
Bodily Injury Liability: covers damages for bodily injury or death resulting from an accident for which you are guilty
Liability for Property Damage: covers damage to someone else’s property resulting from an accident for which you are guilty
In order not to jeopardize your personal assets and all your savings, it is important that your insurance is able to cover a court sentence if you have a more serious accident.
2. Personal Damage Insurance or Insurance Against all Risks
Auto insurance against all risks is much more comprehensive than third-party insurance and covers damage to the vehicle itself, driver treatment expenses and other coverages – most of which are optional. However, it is important to stress that there are no insurance policies that cover 100% of the risks.
In addition to covering bodily and material injuries, this type of insurance generally also includes:
• Coverage of hospital expenses: on medical expenses related to an car accident
• Personal injury protection coverage: It can pay for your medical treatment, lost wages or other accident-related expenses, regardless of who caused the accident
And still:
• Breaking glass
• Travel Assistance
• Replacement Vehicle
• Juridical support
• Malicious acts
• Earthquakes and other natural disasters
In fact, you can add as many coverages as you want to your auto insurance. Talk to an agent and get all your questions answered before moving on.
What is the ideal amount of coverage for my auto insurance?
The right amount of coverage for your auto insurance depends on your needs, budget and legal requirements.
Some questions you can ask yourself before choosing your insurance and coverage are:
• What coverage and limits are required for all drivers?
• Do I need to protect other assets, such as my home?
• How much can I pay (out of my pocket) at any time?
• How much is my vehicle worth now?
We recommend that you check the minimum of an auto insurance and know all the coverage options that exist in order to ensure the right coverage for you.
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