Auto insurance

The word insurance gives us a feeling of safety in our minds,according to law and economics it is a form of risk management and not risk avoidance.Some people think that assurance can save them from any kind of losses well it is only a risk management form and it doesn't mean that you are all free and safe,you get safety in financial terms only and it cannot make reverse the situation.(especially in case of life insurance).

For example : if a person dies then his heirs will be able to get only monetary benefits as the person cannot be revived back to his life.

WE are here to talk about the auto coverage.

 assuranceCoverage levels

Following are the car assurance coverage levels


The insured party : the person who is insured.
The insured vehicle : vehicle car,auto etc
Third parties (car and people) : Prevents third party cars and people from 

liability insurance

What are deductibles:

Any amount paid in excess of the fixed contribution towards the car assurance is called deductibles it depends on your choice whether you want a full coverage or want to save money , the high deductibles the less you pay premiums.Deductibles are the portion of any claim that is not covered by the assurance provider.

Again these deductibles are further divided into two classes

Compulsory deductibles : It is the minimum or the lowest excess payment your insurer will accept on your protection policy. 

Voluntary deductibles
It is the extra or additional amount of money over and above the compulsory deductibles that you agree to pay in the event of a claim on the policy.

What are the basis on which company can charge you premiums:

Well there are many factors which effect your auto insurance premiums costs 

some of them are discussed below:

Gender :
Well this is a controversial issue and this is all about whether women are good drivers or males,it is found that mens average more miles driven per year than the females do, and have a proportionally higher accident involvement at all ages.But again there was evident which was published in news reports on a recently defeated EC proposal to make it illegal to consider gender in assessing assurance premiums.

Age

Well this affects a lot. Why ? it is a sign of maturity and responsibility simple.You can see that teenage drivers who don't have driving record will have higher car protection premiums.

Distance : the more you drive your auto or car, the more you have to pay for
premiums however many companies don't give regard to this thing a lot.

Reasonable estimation : It means that estimation is done on justifiable grounds, well many of the vehicle protection plans rely on a reasonable estimation of the average annual distance which is expected the car to be driven which is provided by the insured.

Odometer-based systems : This system of vehicle assurance is simply based on the cars Odometer which help to know how much car has travelled.After application of company's risk factors and the insured person has accepted the per-mile rate offered,this comes into play

According to this system customers buy prepaid miles of assurance protection as needed, depending on factors such as buying gallons of gasoline etc. Consumer can easily know when to buy protection.Even though there are possibilities also of cheating the system by odometer tampering.

GPS-based system
During 1998 it was emerged by the Progressive assurance according to this system drivers received a discount on premiums if they install a GPS-based device which is used to track their driving behavior and report is send through cellular phone to the company

OBDII-based system 

This system was again developed by Progressive in 2004 it used a device which was named TripSense device. This device connects to the vehicle's OnBoard Diagnostic(OBD-II) port, which exists in all of the new cars built after 1996.
Insurance of classic vehicle and antique auto

:

There is a wide difference between the Antique car as it is much older than classic cars. Some of the people generally have the love for the antique cars and cars they want to be on safe side because the antiques cars needs more precautions and their parts are irreplaceable so you have to take care about them.This is the reason why an antique car assurance has certain bounded or restrictions. Insurance companies might be sometimes willing fully give you a decent premium if you take certain precautions.

Classic cars is that car which needs to be only 15 years old whereas antique cars have to be at least 25 years old.

Different principles of safeguard

There are about seven characteristics which are described below:

Large no. of homogeneous exposure units.
Definite Loss
Accidental Loss
Large Loss.
Affordable Premium
Calculable Loss
Limited risk of catastrophically large losses
these all characteristics of assuranceare described at wikipedia