Last Updated on Tuesday, October 13, 2020 by ProsCons
Nowadays cars are not a luxury but a necessity for a family. Car enables easy travelling of a family to any events or vacation. With the ever-adding number of vehicles in the congested roads, the safety of cars from accidents and damage has been paramount. Car insurance is one of the effective ways to get protection from financial losses as well as liabilities. There are many insurance companies which sell insurance policies to cover damages and losses on vehicles such as cars. However, car insurance is not filled with benefits only; there are also negative sides of car insurance. We will be discussing the pros and cons of car insurance in this article.
Pros of car insurance
Damage and Loss Coverage
A car is likely to experience damage due to involvement in accidents. Car insurance covers the financial losses due to damage on cars in such occasions. Car insurance company analyzes the extent of damage and decides whether to repair or replace the damaged parts of the car. Similarly, a comprehensive car insurance policy covers the financial losses due to causes other than accidents. These includes damage caused by fire, theft, strikes or terrorism. It further covers loss or damage while in transit by rail, inland waterways, air, road, or lift as per the terms and conditions. A smart choice of insurance is vital to cover all these damages and losses.
Personal medical claim
One of the key advantages of car insurance is that it covers your medical expenses for the treatment of injuries due to car accidents. Moreover, taking a personal accident cover in insurance provides protection against disability and death due to the car accident. The medical claims can be extended for other passengers, travelling in the car for a predetermined insurance premium. Overall, car insurance provides a safety net for the people travelling within a car.
Third party liabilities
The benefits of car insurance extend up to covering third party liabilities. In case there is damage or loss to the property of any third party due to your car accident, the loss is covered under third party insurance. Moreover, the insurance protects you from legal liabilities in case of any bodily injury or death of a third party due to the car accident. This is particularly beneficial to ride cars in city roads filled with other vehicles.
Vehicle insurance is mandatory for owners in many countries of the world. The positive aspect of a car insurance is that you are abiding by the legal requirements. Having car insurance protects you from any legal clause or penalties even if you are not aware about any legal requirement.
No claim bonuses
One of the hidden advantages of car insurance is the no claim bonus (NCB). If you have not claimed for any insurance in a particular year, you can claim the no claim bonus. In general, no claim bonus is distributed as a discount on the premium or gift hampers, which makes car insurance affordable as well as entertaining.
Cons of car insurance
Does not cover entire vehicle
The major disadvantage of car insurance is that the policy is unlikely to cover the entire vehicle. Generally, car insurance covers only the specific parts of the car for damages and losses. Customers should read the clauses and terms of insurance in detail to understand the extent of the insurance coverage, before buying the policy. Moreover, the car insurance that does not cover the costly parts of the cars is next to useless for car owners.
Hidden terms and conditions
Insurance representatives are likely to hide the specific clauses in order to lure customers to take the insurance policy. However, these terms are reflected back at the time of claim settlement. The hidden terms and conditions protect the company from bearing many financial liabilities as promised. Moreover, the company remains in the front seat during negotiation for settlement, based on terms and conditions. You should go thoroughly with the terms and conditions, although it can be a pain-taking activity.
Claim settlement is not an easy and quick process. The insurance company follows long and strict protocols and procedures to determine and verify the insurance claim. This generally takes a long-time frame. The hassle is even more when there is a cash claim for the losses. Dealing with different representatives of the company and waiting for a long time can be really painful while claiming for the insurance coverage.
Strict premium policy
You are expected to pay your insurance premium in strict deadlines. Failure to meet the deadlines in any occasion might result in dismissal of contract. Moreover, you cannot claim for insurance in case you have unpaid premium. The strict premium policy can sometimes leave you without insurance coverage despite insuring your car.
Accidents and losses are unavoidable realities of a life. As we cannot avoid them, the best thing to do is stay protected from them. For time being, car insurance is the best way to protect cars and its passengers from financial losses due to accidents. An informed decision through careful study of terms and conditions can provide long term benefits from car insurance. Moreover, there are different sorts of insurance policies such as comprehensive, third-party and so on available in the market. You should clearly understand the nature of insurance and history of insurance companies before making a final deal.