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Written by Amine

Car insurance estimate: How much do you need?

Every car buyer goes through a checklist before buying his or her brand new car. The most important aspect of the list is the car insurance and the car insurance estimate. Car insurance acts as protection for your car as a whole. Your insurance agent can offer you a varied range of car insurances depending on the type of vehicle you need, the amount of cover you need and the number of years you wish to have the -protection for them, with payment of an annual amount, known as the insurance premium.

When an accident occurs with the car, the cost of damages to the car is covered by the car insurance you choose for it, this, however, does not include any damage incurred above the general amount of the car insurance. The value of your car insurance estimate is calculated from your vehicle’s IDV or Declared Insured Value; the IDV is the maximum amount that the insurance company will pay for the damages that your car incurs. The amount of IDV approximately equal to the current market price of the car you own or the showroom price of your car. The IDV is therefore not a constant value and keeps changing periodically. On renewing your car insurance after one year, the value of the IDV will decrease due to the amount of depreciation charged on it after one year.

What are the damages covered by car insurance?

Car insurance will not cover all the damages your car faces, during the life of the insurance. Coverage in the United States usually appears in a group of three numbers separated by a dash, for example, 20/50/30 or 100/500/100. The first two numbers usually appear for medical coverage. For 100/500/100 the insurance company policy will pay $100,000 per person up to $500,000 combined for all people. The last number covers damage done to property, ie any vehicle or other property that hits in an accident.

A comprehensive car insurance plan will mainly cover the following types of damages:

  • Liability Coverage:

The coverage also known as casualty insurance, mainly covers bodily injury and property damage, i.e. damage to your car. The amount of insurance, however, will vary from jurisdiction to jurisdiction. The insured is also allowed to increase the amount of insurance cover (before loss), to cover any loss incurred during the accident.

If in an unfortunate circumstance, you hit a telephone pole with your car. In such a case, the liability coverage covers the costs of the damage caused to the pole. However, it does not cover other costs related to the damage that is being caused such as disruption in the services requested by the Telephone company.

Bodily coverage covers the insured from possible injury during the accident as well as covering him or her from any damage to a third party caused by an accident. The coverage covers court costs and damages for which the insured is being sued.

  • Full Coverage

Full coverage covers both collision and comprehensive damages done to your vehicle. Collision coverage covers the vehicle involved in collisions, by paying for the repair of the damage sustained or by paying the cash value of the vehicle in case the vehicle cannot be repaired.

Comprehensive coverage covers the vehicle from damage that would not normally be considered collision damage. Damages covered by this coverage are damage due to theft, vandalism or animal impact. In addition, many insurance companies also include ‘Act of God’ damages which is any damage caused by an event or events caused by factors beyond human control, such as cyclones, tornadoes, tsunamis etc. .

In addition to the main coverage mentioned above, insurance companies in the United States also provide the following coverage:

  • Damage caused by an uninsured/underinsured motorist (UM/UIM)

  • Loss of use

  • GAP covers.

  • Lease/Loan Payment.

  • Roadside Emergency Service Coverage.

  • Mechanical Breakage Coverage

  • Custom Parts and Equipment Cover.

How can you calculate a car insurance estimate?

You can follow these simple steps, to get your car insurance estimate correctly:

  • Before buying an auto, narrow down your options.

  • Determine the amount of coverage you would ideally need. If you are buying a new car, you should go for insurance that also covers collision and comprehensive damages. However, this is not mandatory in case of a used car.

  • Compare insurance quotes for your vehicle. Different companies will have different insurance costs for your vehicle depending on the type and market price of the model. Comparing quotes will help you narrow down the best auto insurance for you.

  • Make the final choice, based on the comparison table.

What should be the ideal estimate of your car insurance?

There are many factors that affect your car insurance estimate. Ideally, you should choose a plan and an amount, which covers most of the possible damage that your auto can sustain during life. The amount of insurance you choose should typically be higher than the actual cost of your overall auto.

The ultimate car insurance quote ultimately depends on your own choices and individual situation. It is always advisable to look at a wide range of options and companies that offer car insurance after calculating the car insurance estimate. Comparing insurance quotes, and what they cover between them will ensure you get the most out of your car insurance.

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