There has been a fantastic increase in the number of automobiles plying on the roads today. While this has resulted in a positive boom for the automobile industry, it has also made the roads a lot riskier than they were before. Consequently, today automobile drivers are at risk from:
- Rash driving of other drivers
- Negligence and jay-walking on the part of pedestrians and
- Mistakes, both avoidable and unavoidable on their part
It thus makes sense for any person opting to drive on the road to ensure they have the requisite for an automobile in place. In fact, almost all states made automobile insurance a mandatory factor for buying a car. Thus, any person not having the same can be prosecuted by law.
Salient Features of an Automobile Insurance
Since it forms an integral part of the ownership of a vehicle, and is also a mandatory annual expense, knowing the nitty-gritty of 0 down auto insurance can result in a good way to save money by way of premiums. Some of the important features which every automobile insurance applicant must know are:
Insurance Types
Generally, all types of automobile insurance can be of two types:
- Comprehensive Insurance
Also known as the package policy, this policy provides precisely what it states, i.e., a comprehensive policy which provides coverage for both third parties as well own damage. But it is necessary to understand that having a policy for own damage is not a mandated by the courts of law and is thus an option which the automobile owner can choose to avail or ignore. But as every auto insurance policy advice, there are many advantages to getting insurance for own damages which, if availed, can ensure driving with a peaceful mind.
- Third Party Insurance
Commonly known as the Liability only insurance policy, this provides coverage for both physical as well as property damages incurred by a third person for any reasons connected to the policy owner’s vehicle. The owner-driver is also additionally provided with a personal accident cover. This cover, however, does not extend to the vehicle involved in the accident. The third-party automobile insurance is mandatory insurance, driving without which is an offense punishable by law.
- Risks Covered
Damages incurred by a vehicle can be a direct result of three factors which are generally recognized by the insurance companies. These risks include:
- Natural disasters like earthquakes, storms, floods, tornadoes, volcanoes, etc.
- Man-made disasters which are a direct consequence of incidents like accidents, fire, thefts, malicious acts, etc.
- Damages incurred while the vehicle is in-transit by either rail, road, elevator or lift.
Insured Value:
The insured value is generally mistaken for the total value of the automobile. But it refers to the manufacturer’s price minus its depreciation due to age. An upper limit is commonly fixed for property damages incurred by a third party, but the coverage is virtually limitless when a third party is either physically injured or mortally harmed by the concerned vehicle.
- Premium
This is the amount which is paid by every owner either on a monthly, quarterly or annual basis to ensure that the insurance policy is kept active. The premium amount for every automobile police is determined based on certain factors like:
- The vehicle type including its capacity, age, model, fuel types, etc.
- City of residence of the applicant along with his age and profession
- Claim history
- Modifications done to the original design of the vehicle
- Accessories, if any, that have been added to the original vehicle.
- Options for Premium Savings
Saving on the premiums can be quite a hefty amount provided the insured vehicles owner knows the basics of the same. Some of the strategies for saving on premiums include:
- A no claim bonus which ensures a discount on the premium to be paid if there is no claim made the previous year
- The no claim bonus gets compounded for every successive year of zero claims
- Automobile association membership
- Installation of safety devices
- Opting for an option of higher deductibles etc.
- Add-ons
Automobile policy add-ons help cover risks which are generally not covered by the automobile policies commonly and popularly availed. These add-ons can help with 20 down payment car insurance, accidental hospitalization, worker’s compensation for the driver, unnamed co-passenger personal accident cover, etc.
- Claims
The advent of technology has enabled even insurance companies offering automobile insurance to offer cashless facilities at garages authorized by them. The age-old practice of getting the automobile repaired at a garage of the owner’s choice and then putting up a claim with the insurance company is also available.
- Exclusions:
Any company, especially for automobiles, has certain exclusions which a vehicle owner needs to know about before opting for an automobile insurance policy. These inclusions generally and commonly include:
- The wear and tear normally suffered by a vehicle in use
- Depreciation in its cost
- Breakdown resulting from electrical or mechanical failure of the automobile
- Deviating from the purpose for which the automobile has been purchased
- Vehicle being driven by a person without license, or under the influence of drugs, alcohol, etc.
Automobiles are prone to a lot of risks on the road, and there is always a possibility of it incurring financial loss. In order to minimize the same, it is important for a vehicle owner with a tight budget to opt for a no down payment car insurance. And keeping the above points in mind enables a person to make the correct choice for the same.
