Automobile insurance, also known as motor insurance, is an insurance type that protects you financially if you are involved in an accident, or your vehicle is damaged in some way. It is an agreement between the policyholder (the entity or person getting the insurance) and the insurance firm.
In addition, it also helps businesses save potential losses and liabilities for owning and operating vehicles. However, there are a few types of motor insurance, and you should know the advantages, coverage, and differences of each so you can choose one that suits your needs. Read this guide to learn all these things!
What Are Types Of Automobile Insurance?
There are three types of automobile insurance.
- Car insurance
- Bike insurance
- Commercial vehicle insurance
What Is Car Insurance?
Car insurance applies for all privately owned four-wheelers, and it protects you and your four-wheel vehicle against financial losses. Two major classes of car insurance plans are third-party and comprehensive.
Third-party insurance is the very basic motor insurance type. It covers the harm you cause to other people’s vehicles and belongings in an accident. It is required by law in Pakistan.
Comprehensive insurance provides additional coverage beyond what is required by law; you can take IGI Car Insurance as an example. It can include coverage for the following:
- Damage to your own vehicle
- Medical costs for you and your passengers
- Property damage caused by an accident
- Lost wages if you can not work due to an accident
- Natural disasters
Comprehensive insurance is not required by law in Pakistan, but it is a good idea if you want more protection in case of an accident. It can also be beneficial if you have a more expensive or newer car.
What Is Bike Insurance?
Bike insurance is a form of automobile insurance that applies to privately-owned two-wheelers. It is like an accord between an insurance company and you (the bike owner).
If you buy bike insurance in Pakistan, it aids you if anything unwanted happens to your bike, like an accident. The insurance takes care of the costs of fixing your bike if it gets damaged while you’re riding it. The following are a few of the advantages you get if you buy bike insurance in Pakistan.
- Financial safety in case of a theft or accident
- Coverage for third-party liability
- Peace of mind knowing that you are protected financially
- Lower insurance premiums if you have an excellent driving history
- Easy to purchase and renew online
The cost of bike insurance varies depending on the insurance type, your motorcycle’s value, and your driving history. However, it is generally a relatively affordable mode to shield yourself financially if theft or an accident happens.
What Is Commercial Vehicle Insurance?
Commercial vehicle insurance is a type of insurance coverage specifically for vehicles that are utilised for business objectives. It financially protects individuals or companies against potential losses and liabilities that may arise from operating commercial vehicles.
These vehicles can include trucks, vans, buses, taxis, delivery vehicles, and other vehicles used for business-related activities. Although the exact coverages that are included differ depending on the policy and the insurer, the following are some of the most common coverages.
- Injuries or damage caused by the insured vehicle to others or their property.
- Harm to the insured automobile from accidents, regardless of fault.
- Non-collision damage to the insured vehicle includes vandalism, fire, theft, and natural disasters.
- Medical expenses for the insured vehicle’s driver and passengers, regardless of fault.
How To Choose An Automobile Insurance?
Figure out how much coverage you need.
The law in Pakistan says you need at least 100,000 rupees to cover damage to others as third-party liability. But you might want more coverage, like for accidents and other damages.
Ask for prices from different insurance companies.
You should compare the prices from different companies to hunt the finest deal. You can do this over the phone, online, or with an insurance agent.
Look for discounts.
A few insurance companies offer you discounts if you’re a good driver, have safety stuff in your car, or have anti-theft devices. Make sure to discover if you can get any discounts.
Pick an insurance company people like.
Not all insurance enterprises work similarly. It’s wise to choose one that treats customers well and handles claims nicely.
Read the insurance plan carefully.
Before you decide, read and understand the insurance plan. This way, you won’t be amazed if something occurs, and you must make a claim.