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Auto Insurance: All You Need To Know

To understand auto insurance, firstly, it is imperative to have knowledge of what insurance entails. To this effect, a definition is needed; thus,  Insurance is a means by which a company or the government guarantee that stipends be paid to the beneficiary in case of loss of whatever commodity or, otherwise, is stated in it. Having known this, auto insurance is simply insurance of a vehicle, be it a car, truck, or a motorcycle.

It provides financial backing in case of damage as a result of an accident, theft of the automobile, or other loss incurred in such a way that is not in contrast with what is agreed upon in the contract. It can also provide financial protection in the event of damage resulting from natural disasters and/or collision with stationary objects. This all depends on the region. It is harder to get protection from effects from natural disasters in Nigeria. In this case, legal regulations guiding insurance in this region come into play.

You’re basically paying for coverage of costs in case of a mishap. That is, you pay money now which will be used to cover the costs of an accident (whether it is your fault or not) “in its eventuality”.  When applying for an insurance, you will be asked certain questions pertaining to your age, marital status, occupation, distance the car will be driven on average in a month, the car you drive, your home address, and other questions which will either drive up the price of the money you will pay to them considerably or help to bring it down.

For example, a 33-year-old married man driving a 2014 Toyota Camry will pay significantly less insurance than a 74-year widower driving a 2018 Range Rover Sport. This is because the man in his youth(and married), is considered less likely to crash his durable Toyota but the senile, mourning male is deemed more prone to collisions or other such vehicle tragedies.

An auto insurance contract can cover a range of things namely:
  1. Damages to other cars
  2. Damages to public property
  3.  Injuries to passengers and other drivers
  4. Lawsuits in case you are sued to court for damages
  5. Theft
  6. Towing Fees
  7. Flat tire changes due to circumstances beyond your control
  8. Explosions, fires, and vandalism as a result of riots
  9. Falling trees/branches and objects were inadvertently thrown by other vehicles
  10. Storms, flood, lightening
  11. Accidents involving animals
  12. Damages to your car from an uninsured road user

Auto insurance, like pretty much every other thing, has types depending on what you really want. If you have the financial prowess though, you can have them all. They are:

1. Personal Injury Protection Insurance
This covers medical expenses for injuries to you and passengers in the car with you during the accident. It can also cover burial costs in cases of a fatality. It stands no matter who is at fault in the accident.

2. Physical Damage Insurance
This covers non-collision (comprehensive coverage) and collision accidents such as vandalism, theft, natural disasters (non-collision) and a case where someone hits your vehicle with theirs or vice versa (collision).

3. Liability Car Insurance
This covers financial damages to others when you are at fault in an accident. It pays for bodily injuries as well as property damage to the other party. This ensures prompt payment of the affected parties to avoid a lawsuit which will lead to more losses.

You and your vehicle are almost literally covered when there is an emergency of “automobile” proportions. People get insured because:

  • Not everybody has the necessary funds to pay for huge costs of repair after the accident so that takes care of that.
  • It is a legal requirement in some countries abroad.
  • Heavy medical expenses are covered by the insurance policy.
  • It gives peace of mind when you know you’re covered financially in the event of an eventuality (don’t take this as an excuse to drink and drive for your life insurance is paid to your next of kin while you float in non-existence!).
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