What is carinsurance?

Car insurance, or motor car insurance, is insurance cover for your vehicle to protect it in the event of accidental damage, theft, or other types of loss. You pay a financier a certain amount of money each month or year to pay for that loss. The amount you pay for car insurance depends on the amount of risk you are to the insurance company.

That is, for example, if the car you drive is expensive, the amount the insurer will have to pay in the event of loss is greater, meaning their risk is higher, which results in a more expensive premium. If you’re younger, statistics indicate that you are more likely to be involved in an accident as a result of reckless driving, making you more of an insurance risk to the insurer, and so on.

What does carinsurance cover?

Car insurance traditionally comes in three types of policies: comprehensive, third party, and third party, fire and theft. Comprehensive car insurance covers the car for accidental damage, damage caused to third parties, fire, theft and hijacking and most other insurable perils.

Third party only covers the damage you cause to other people’s property, while third party, fire and theft includes cover for explosion, fire, theft and hijacking (but not damage to your own vehicle).

What affects the price of carinsurance?

While insurers in a competitive environment can offer cheaper insurance, most insurers look at the following factors to determine how much of a risk you are to them. Firstly, your age. The younger you are the more likely you are to drive recklessly. Reckless driving, statistically has a correlation to gender as well, which is often why women pay less for car insurance. The type of car you drive (as this determines the cost to repair it), the amount of your excess (as this is in effect taking more risk on yourself and off of the insurer) and how often you claim, determines how much of a risk you are to your insurer.

How much excess should I pay for carinsurance?

Excess is the initial amount you pay when you submit a claim to the insurer for accidental damage, theft or other insured loss. Insurers ask that insureds pay an excess to limit the number of claims they receive as some damage can be afforded by the excess. The higher your excess, the lower your premiums. But never put your excess higher than what you can afford, otherwise you’re still paying for all the risk yourself.