Tips on Buying Auto Insurance

Driver should bear in mind that there are number of details that should be taken into account when applying for motor insurance policy.

Firstly as soon as car purchased the owner must buy an insurance cover. If a used car is purchased, the new owner needs to know that the cover of the previous owner is null and void.

The insured value or sum insured depends on the market value of the vehicle. Under insurance or over insurance occur when this value is not properly mentioned.

Over insurance occurs when sum insured is higher than the market value, maximum compensation is the market value of the vehicle.

Under insurance occurs if sum insured is less than the market values, you are as self-insuring the difference. In the event of a loss, you will only be partially compensated.

Average clause is applied when you suffer damage to your vehicle which is under insured. Your claim will be reduced proportionately by the uninsured portion, e.g. if you have insured your vehicle up to 70% of the market value, the insurance company will only pay 70% of total repair cost.


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