Different Types of Car Insurance Policies Compared

A good car insurance policy is a must have with any car, to protect not only your asset but in the unforseen event of an accident, have the other car repaired if you are at fault.

There are many different types of car insurance policies available now days for your vehicle. The cost of these car insurance policies depend on the type of coverage that you want, the type of vehicle you drive, your age and of course your driving record.

With a large number of car insurance companies in the market, you will have a great number of the car insurance polices from which you can chose the best for your lifestyle and vehicle. The car insurance is essential for your vehicle. But before buying car insurance you should decide on the various factors that will determine the cost of your car insurance policy and also the arte of the premium that you will have to pay. All you have to do is to contact the insurance companies either in person, over the phone or with the help of the internet. The internet is the easiest nowdays and will help you get all the information quickly in the comfort of your own home.

Car insurance companies do require you to provide them with information about yourself such as your age, sex, previous traffic offences and about your drinking record and also the kind of the insurance policy in which you are interested. The insurance premium is then determined based on these factors. Some companies do offer various discounts to help reduce your premium, but once again, the internet will help you get many quotes quickly to ensure you do get the best price.

Now, lets look at the different types of insurance policies available in the market - you might be able to reduce your premiums markedly by switching to a different type of policy. Below you will find a list of insurance policies to help you compare.

Fully Comprehensive Car Insurance

The Fully comprehensive insurance policy is the most expensive type of car insurance available. If you, like most of us, had to use finance to buy your car the finance company would have required you to take out this type of insurance. It basically covers every type of mishap that can hit you as a car owner. You will be covered if you drive into a tree, had your car damaged while parked or if you simply collide with another car while.

You will also be covered if your vehicle is stolen or if it catches on fire. Not only is your loss covered, but also protects you from claims that other drivers may have against you after an accident.

Many (not all) insurance companies refuse to insure the full value of a vehicle though. According to them it encourages people to submit fraudulent claims. You might get tired of your old car for example, and simply drive it into a concrete wall, or set it alight. They often therefore only insure 80% of the value of the vehicle, and you still have to carry the risk for the other 20%.

Third Party Fire and Theft Insurance

This form of insurance policy falls midway between comprehensive insurance and third party insurance. It is important to remember that with this kind of policy it only covers you in case you hit another vehicle and you are responsible for the accident. If you are not responsible, the insurance company will not pay out. In simple terms, if you are at fault, the insurance will cover the other vehicle and not yours (imagine the other car was a $150,000 Mercedes and you had no insurance?).

You will also be covered if your car is stolen or if it is destroyed with a fire. This does not include you setting it on fire though!

Third party vehicle insurance

This is the cheapest type of vehicle insurance. One will very often find that people owning a very old vehicle with little market value choose this option.

It does not cover you in case your car is stolen, or burns out. It does not cover you if someone else drives into your car - you will then have to sue the guilty party. It only covers you if you drive into someone else's car. You therefore have to be the guilty party, otherwise no payment will ensue.

It does however cover you if did drive into the mayor's Mercedes Benz.

Now that you know the different types of vehicle insurance policies available, and you have studied the basic auto insurance comparison above, you should be in a better position to make a decision on how to decrease your monthly insurance cost.

As always, good luck & happy driving!