How To Find The Best Car Insurance For You To Buy?

April 06, 2011    No comments allowed for this post.

The principle underlying car insurance is known as 'risk sharing'. A large number of policy holders all share the risk that one (or more) of their fellow policy holders will make a claim. While nearly everybody NEEDS insurance, nobody ever wants to have to use it.


In most countries (though not all) automobile insurance is required by law. South Africa is one of the notable exceptions. Having insurance coverage for your automobile is not legally mandated here although, most would agree, it's still a wise choice. Here's why.


Even if you're the safest driver in the world you're still out on the road among many others who may not be so diligent in their driving technique. Like they say -- accidents happen. An insurance policy 'spreads the risk' of your having an accident between ALL the policy-holders your particular insurance provider has currently underwritten. Not every one of them is going to make a claim (of course), and the policy issuer knows the statistics and the odds of approximately how many WILL be making claims.


Insurance companies are big on statistics and determine how much premium to charge each policyholder based on scientific principles. Comprehensive auto insurance covers the insured against the longest list of potential 'perils' as is typically the most expensive to purchase. This is also the most popular type of coverage sought.


Even though you may not be legally required to carry coverage on your automobile (as in S. Africa) it WILL be mandatory if your car is being financed. Any lending institution wants their interests in a car they've financed to be protected in the event of an accident or theft. They will require you to obtain comprehensive coverage, which also protects against natural events (storms, hurricanes, etc.).


If you're driving a beat up old jalopy that's not being financed (and would be easy to replace) you may not want comprehensive coverage. Other, lesser costing policies exist that don't include coverage for damage done to your own car. They primarily provide you with liability protection in case you hit someone else and they sue you for damages. A serious accident can spell financial disaster for an uninsured motorist.


These days the easiest and most efficient way to find the right auto insurance coverage for your particular needs is to go online and shop around. All the established companies have websites up and running and these can be quite informative. 'Aggregator' sites exist that enable you to enter your personal data just once and they will reply with numerous, competitive price quotes from various companies. The Internet makes comparison shopping quick work.


Of course, as with most things, the lowest priced product isn't necessarily the best deal. Policy terms vary. Some include limitations or exclusions that should be understood before signing on the dotted line. All the info is available and easy to find. It's time to do your homework!

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