Car Insurance for Beginners

• Tips/Guides-Tips/Guides

Car insurance covers you financially for property damage and personal liability such as accident damage to your car, personal injury, or damage to a third party.

These are some of the main types of car insurance:

• Comprehensive Insurance – Covers damage caused to your car including theft, vandalism and weather damage.
• Liability Insurance – Also known as third-party insurance, it protects you if you cause damage to someone else’s property or bodily injury. Liability insurance can cover the cost of ambulance transport as well as medical or hospital needs.
• Personal Injury Protection – Whilst it is important to have third party insurance, it is important to have your own personal injury cover. Personal injury protection will cover the financial cost of your injuries as well as your passengers in the event of an accident.
• Collision Insurance – Accident damage to cars and the cost to repair the vehicle can be extremely costly. Collision insurance helps you financially for repairs and car parts to get your car up and running again.

How your Premiums and Coverage is Determined

When applying for car insurance, you will need to provide the insurance company with specific personal information, which is used to determine the level of risk involved, and to calculate your premiums. The higher the risk, the higher the premium.

Several factors are taken into consideration when a premium is determined:

1. Your age
2. The area where you live and work
3. Where your car is usually parked, day and night
4. In some cases, your gender
5. Your driving history
6. The vehicle’s replacement value

For example, older and more experienced drivers, living in a safer neighbourhood, with a good driving record,  present less of a risk, and therefore their premiums will be lower. Also, high-performance luxury cars will drive up premiums because their repairs and replacement parts will be more costly. 

Filing in a Car Insurance Claim

If you’re involved in a car accident – irrespective of who is at fault – you must report the accident to the police. Record information such as a description of the accident and the details of the parties involved. Take photos of the accident scene and the damages. These details will be necessary when submitting a claim to your insurance company.

Who should be Claiming?

• Where both parties are at fault – Claims are filed to both parties’ insurance companies. Each driver’s insurance company may make a payout for damages.
• Where you’re not at fault – If the other party cannot cover your damages or injuries, you’ll need to submit a claim to your own insurance company who will be able to assist in securing the payout.
• Where you are at fault – The other party will file a claim to your car insurance company. The premiums you have been paying allows the said third party to be paid out, without you bearing the full cost of the damages or injuries.

Car insurance can be as basic as liability insurance, or it can be more encompassing like comprehensive Insurance. Though it’s important to be properly covered,  the best way to avoid any financial burdens from accident repairs, losses, and injury, is to be alert, drive safely and defensively, and don’t drink and drive.