The Origin & The Different Types Of Auto Insurance?

Auto insurance is recommended for those who may purchase a truck, a car, motorcycle, and any other road vehicles. The principal purpose of this is to provide financial protection against car accidents. Accidents are covered by the auto insurance company, for you and for your passengers, in the event of a vehicular mishap.

Where it came from?

Widespread use of vehicles originated after the first World War, in the metropolitan areas of most countries. In that period, vehicles were quite fast and dangerous. But there were no compulsory form of auto insurance in most regions of the world. During that time, injured victims seldom get any payment in an accident, and drivers often faced substantial costs for the damages to their automobiles and property.

The first compulsory car insurance was introduced in the United Kingdom, with the Road Traffic Act of 1930. This act stated that all drivers and car owners had to be insured, and that they subjected to legal responsibility, if they were culpable for the death or injury to third parties (when their vehicle was being used on a public road). Then in 1939, Germany put a similar law into effect.

What are the types of auto insurance?

There are several types of auto insurance:

  • Third party insurance – This is also known as the Liability insurance, which is the lowest form of insurance offered by an auto insurance company. This is usually the basic insurance for when you are involved in an accident, and if you are liable for such accident. The damages to the other party will be paid by the auto insurance company.

The insurance company usually set the amount of coverage, beforehand; and it is the maximum amount that they will pay you, in the event of an accident. For instance, the insurance agency will agree on a ten thousand dollar coverage (per person) and/or a forty thousand dollar coverage, in bodily injuries and/or ten thousand dollar coverage, in the damage of property.

You should confirm the amount of coverage your insurance company offers, as well as the limits of their insurance coverage. Getting the right insurance can save you a lot of time & money; those who get into a car accident, sometimes end up being overwhelmed by medical bills; and go into default and get contacted by Allied Interstate (a collection agency). So, having the proper auto insurance will make it so that you have one less bill to worry about.

  • Comprehensive coverage and comprehensive insurance – Comprehensive insurance means that if you are responsible for the collision, the company will pay for the repair of the vehicle. But it is not that simple, the insurance company will always have the final word on what amount will be paid. You should ensure that the insurance company is not in control of the market value of the car. Usually some organizations will give a fair market value.

Other types of Auto Insurance:

  • Personal Injury Protection, No fault Coverage and Medical (MedPay) – This type of insurance will insure you and your passengers, with medical expenses in the case of collision. The No Fault Coverage explains that the auto insurance company will pay, regardless of who is at fault. This means that your family and friends are covered. The Persona Injury Protection is often a minimum requirement in some regions.

  • Uninsured Motorists’ coverage – This will provide coverage when the person at fault is not insured or is under insured. You should ask your insurance company what you will be charged , should this situation arise.

  • Rental Reimbursement – This covers if your (rental) car is damaged, then the insurance company will pay for the rental fee. The company may also offer to pay the towing of the car (but this is not always included). To be sure, you should ask the auto insurance company what is included in the offer. Also, be mindful that, if you continually challenged an auto infraction that resulted in a debt that went into arrears, and ended up with stellar recovery collection agency; you can wait for the debt to expire, and have it removed from your credit report.

What are the tips in choosing the right auto insurance company?

To choose the right auto insurance company, you need to take these steps:

  • Consider the type of the coverage you need – if you have a less-than-perfect driving record, you may want to compare insurance fees from the companies specializing in giving the customers a second chance to earn auto insurance discounts. If you have more than one vehicle, you will find that other auto insurance companies will offer you cheap insurance rates.

  • Look for one that gives customers rewards based on a good driving record – an important key to a respectable company for auto insurance, is the flexibility of incentives and coverage selections that promotes responsibly and better driving. Take the time to review the insurance company’s policies on discount rates for those with a safe driving record.

  • Realize that insurance rates vary in different areas – one auto insurance company may be less expensive than the other insurance company. Most will agree that insurance is expensive, so it is important that you compare rates – just to ensure that you are getting what you paid for. Furthermore, a good auto insurance company will offer various competitive auto insurance rates, different types of coverage, as well as, deductibles. It allows temporary payments of medical bills, in case you are involved in a car accident – a huge benefit that can save you from the trouble of dealing with convergent outsourcing collections agency, a debt collector that specializes in collecting medical debt.

In choosing the right auto insurance company that offers the best, simply take the time to shop around and compare insurance companies, before making a final decision.