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Automotive Insurance In A Nutshell

May 10, 2008
Auto insurance or motor insurance, is the insurance that is put on cars, trucks, and other various types of motor vehicles. Its basic use is to save the owner of the vehicle from the cost of damages the vehicle has undertaken, and free the owner from being liable if an accident were to happen.

There are different levels of coverage that can be put on an owner's vehicle. A vehicle can be insured against theft, fire damages, and traffic accidents. The owner of the vehicle can be insured with full coverage of the vehicle, or can be insured to a certain extent. The insurance company can pay for a particular amount of money, which was stipulated in the plan previously purchased. A motor vehicle owner can also purchase a plan that will only pay for the damages of the opposing vehicle in an accident. This is called liability insurance. The insurance company will only pay for the opposing vehicle if the insurance holder was deemed at fault in the accident.

An auto insurance consumer can employ a type of insurance called combined single limit coverage. With this plan there is a limit to the amount of money the company will pay for the opposing driver's damages in an accident. But if the driver is also injured in the accident their medical charges can also be paid for.

Collision coverage can be bought by the vehicle owner that protects against collisions between two vehicles. There is also a plan called comprehension insurance that covers accident that do not involve another vehicle.

When in a situation where your vehicle must be repaired, your auto insurance will pay for the damages but a deductible must be charged. This is normally paid directly to the company that fixed the vehicle. When a vehicle is written off, or when the cost of replacement is less that the cost of repair, company will remove an agreed upon sum of money as the deductible.

There are several factors that can affect the cost of your insurance besides the amount of coverage given to the customer by the insurance company. For instance the sex of the driver can make a difference in the monthly rate of insurance. Studies have shown that women drive less, and have a lower accident rate at all ages than men. Therefore in some cases women are given lower beginning insurance fees.

Age is another deciding factor in the amount of money paid by the owner of the vehicle that is being insured. Teenagers who have little driving experience have higher than drivers that have been on the road for a longer amount of time. Some areas allow educational driving courses to be taken by the teens in order to lower their insurance rates. Elderly citizens can be given discounts on their insurance, because they drive less often and for fewer miles than the average driver.

The distance generally driven by the vehicle owner will affect the premium of the plan. The more you drive the more chances your vehicle has to break down or become involved in an accident. GPS systems have even been placed in some cars in order to keep track of where and how far a vehicle has been driven and in what fashion in order to determine policies.
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