Insurance is a contract that minimizes the uncertainty of what may happen in the future. When signing an insurance contract or policy, the insurer or insurance company undertakes, in exchange for charging the insurance price, that is, the premium, to indemnify a loss or contingency covered by the insurance.
There are several parts to insurance:
- Insurer: the insurance company. It will indemnify the insured or beneficiary in the event of an accident in exchange for charging a premium.
- Policyholder: A person who hires and pays for the insurance.
- Insured: person himself or his goods that the insurance protects.
- Beneficiary: Person who receives the compensation established in the insurance policy.
The policyholder, the insured, and the beneficiary can be the same person. In exchange for the coverage provided by the insurance company, the policyholder pays a periodic premium to the insurer.
Some types of insurance are mandatory, such as vehicle insurance or home insurance on a mortgaged home.
The price of your vehicle insurance may vary depending on the model and make of your vehicle and the chosen insurance company.
Why is vehicle insurance mandatory?
To drive your vehicle, the law requires you to take out insurance that maintains and covers the driver’s civil liability, so third-party insurance is the minimum mandatory insurance for your car. The rest of the insurances are optional. The extra coverages are the decision of the insured.
Insurance types and coverage
- Insurance against third parties is a mandatory civil liability and covers material or personal damage caused to other people or vehicles. The coverage ranges from legal defense and damage claims, medical assistance for the driver, and travel assistance.
- Comprehensive insurance guarantees the safety of the third parties involved and that of those present in the car, including the driver. It is one of the insurances with the most outstanding coverage for your vehicle and the insured. The range includes a replacement vehicle, collision with kinetic animals, withdrawal of the license, total loss of the car, or compensation for immobilization.
- All-risk insurance with excess: it focuses on shared responsibility, the insured is the one who defines a bunch, and this determines the coverage of the own damages caused. The insurance company will only pay the difference between the damages and the excess amount.
By understanding what car insurance covers and the main aspects you want to protect, we can decide on the different vehicle policies. In a general sense:
- Vehicle insurance is designed to preserve the investment, personal or family, that the vehicle represents. It offers security in the event of any unexpected event. The protection extends to both the car and the occupants at the time of the accident.
- The policy offers a vehicle civil liability guarantee, covering damage to third-party property involved in accidents, as well as injuries to people or deaths, if they may occur. Coverage is extended to the case of one or more persons.
- The policy’s coverage protects your investment against damages that may occur due to small, medium, or large-scale accidents, whether the vehicle is in circulation or parked. The policy also covers the occurrence of natural events or the action of organized groups that may cause damage to the car.
- The insurer has the support of authorized dealers or first-line workshops that guarantee good repair, the supply of original spare parts, and the presence of specialized labor as part of the guarantee of contracting the policy.
- The policy protects against total or partial loss that may occur due to theft, guaranteeing the replacement of the stolen parts, as well as the vehicle, if a total loss occurs. There is talk of a total loss when the repair of the damage or replacement of stolen parts, plus labor, taxes, and other costs, is equal to or greater than 75% of the vehicle’s value at the time the accident occurs.
- In the case of theft of the vehicle, the total or partial damage suffered by the insured car during the time it was missing is covered if it is recovered before the insurer pays the compensation.
- If hiring a lawyer on behalf of the insured is required, the insurer will indemnify the expenses incurred for the representation.
You don’t have to worry about what type of insurance to choose with a renting contract. The comprehensive insurance for your car is included in the monthly fee.
