A car is a valuable asset that requires insurance. Car insurance is designed to give you peace of mind and will cover the financial obligations that arise in the event of a natural disaster, theft or damage to your car or a third parties.
Three important rules that should be followed when buying vehicle insurance:
- Know what you’re getting before you sign up for it. Advertisements can be very misleading so don’t simply sign up with a car insurance provider because you ‘liked’ their advert. Always read the fine print and look up any terms used that you do not understand. Pay particular attention to exactly what is insured and what will not be covered by the insurance company.
- You have to hold up your side of the deal if you expect them to hold up theirs. When filling out the paperwork, you should always be completely upfront and honest with the car insurance provider. If you with-hold information you may find that the car insurance provider will not payout when you make a claim once they have reviewed the case.
- You will receive a payout that is deemed sufficient and no more. Car owners should note that it is a car insurance provider’s responsibility to payout an amount of money that sufficiently covers the financial loss suffered when your car is damaged.
The claim amount is determined by many different factors including: the model, condition and market value of your car.
When you make a claim, the car insurance provider will look at the amount requested by you and determine whether or not it is a reasonable amount based on quotes obtained from industry professionals. If the cost of the repairs adds up to more than 70% of the total value of the vehicle insured then the insurance company will consider the vehicle to be a write off and they will pay the car owner an amount derived by considering both the market and retail value of the vehicle.
If the car insurance provider processes an amount equal to the market value of the vehicle then the car owner would have to probably put some of their own money with this if they wish to purchase a car that is the same make and model as their last one.