There are two major kind of insurance Liability Insurance and Comprehensive Insurance. Liability insurance is compulsory by law to be taken by all drivers and vehicles. Liability insurance means if you are involved in any kind of major accident, and it is proved that it is your fault due to which the accident occurred, your insurance company is liable to pay any claims that are made against you.
Car Insurance Pricing Plans
Hence it is most beneficial to take liability insurance of the car. Other optional risk coverage with your own vehicle is comprehensive insurance.
Based on various risk factors involved with your car, insurance company will calculate the price you have to pay for your car insurance. The insurance company will consider two factors to judge the risk involved with your car. One factor is how the car works which they feel major cause of crashing and other factor is the resulting of the crash that cost them to pay on behalf of you. These factors decide the premium price you have to pay for the car.
Premium Assessment
Following are the most common factors to assess the premium of the car:
· The value of the car you are driving
· The safety of the car
· The risk coverage you want for the car
· Will there be any kind of deductibles or limits?
· What are your driving plans?
· What are your driving records?
· How long you have held your license?
· What is your age and sex?
Based on the criteria premiums are calculated by the insurance company. Generally there is flat rate per year which everyone has to pay irrespective of above factors. All these above factors will add your premium to the flat rate. Hence, we can say that if your car is fast or speedy, you premium rate will be increased. If you car is old, your premium rate will increase. If you have undergone any accident in past, premium rate will increase. If you are young and male, premium rate will increase. The more you satisfy these factors, your premium rate will be go up.
Discounts
Many car insurance companies gives discount for "low estimated future mileage" to customers who predicts their car’s mileage will exhibit the stated limit till the next premium period. This is practiced to increase their sales figures. There is no additional charge or no verification involved by the insurance company, if the car is driven more than stated mileage. These random discounts offered by the insurance company promote customer to mistaken that miles are just one of the factor used to raise or lower down the prices from the terrestrial base rate. It is observed that odometer miles that normally insurers do not use is not a factor but a metric - the merely valid basis.
Keeping good driving record, choose consistent car which do not offer unnecessary qualities like speed and power and finding out the best deal are the main factors to save on car insurance.