The idea of insurance has been around for far longer than the car (since 1667). The world’s first vehicle insurance was issued in 1897 by Traveller Insurance Company in the US to a Gilbert Loomis, and it was meant to protect him if his car killed or injured someone or damaged their property.
Cars are a mean of transport and a valued possession and life throws many unexpected things at all of us. Any loss or damage can hurt the person not only physically, but financially too. That's why motor insurance is as important and valuable as the car itself and its premium is affected by many factors which you will know by the end of this article.
Now, why do you really need to ensure your car? And how is the price of your car policy affected?
Having car insurance is a legal requirement and within the level of coverage, your policy provides protection physically and financially in the event of your car being damaged. It will also provide cover for injuries to other drivers, passengers, and their property.
Furthermore, insurance can provide financial support in case your car is stolen, vandalized or destroyed by fire. All of these important coverages depend on the type of insurance you’re getting. For instance, if you want full coverage, you can opt to protect yourself against physical harm, fire, and theft. To not worry about the kind of policy you should have, a broker or agent can help you choose the appropriate policy for both the budget and your own personalized needs.
Your payment, known as your insurance premium, can be paid monthly, quarterly, semi-annually or annually, depending on the type of payment you’ve chosen with the insurance company. You should not always go for the most expensive policy, but many factors affect the price of the insurance, and those include:
- Car value
- Age of the insured (not applicable in most insurance companies in Lebanon)
- Year of manufacturing (older car for a higher rate)
- Car type (sedan, sport, SUV…)
For instance, if you drive a luxurious car, you'll end up paying a larger amount of premium than if you were driving an economy car.
The premium depends on car value multiplied by the rate of the year (the newer the car, the lower the rate of the year).
Also, some companies apply a deductible (excess) on policies. The owner has to pay an amount on each and every claim (franchise anyone?). This amount should be clarified in the contract.
What happens if you have a car accident without insurance?
Driving without insurance (compulsory / Elzami) is illegal and you could face penalties. If you cause an accident without insurance, you will have to pay the whole amount of the damage out of your pocket, without the help of the insurance company, since you’re not insured. You could also be sued by other people for causing them any kind of injury.
How to engage the best company?
For the best advice on how to ensure your vehicle with the best company, investigate and get information from various top-notch companies that provide general auto insurance, rather than searching within a bunch of mediocre companies.
Also, the length of time an insurance company has been in the business world is also important and should be considered as a factor when choosing what’s right for you. The older the company is, the more established it is and the better the service. However, new initiatives backed by well-established companies are also surfacing. Take Doozy for example, they are backed by AROPE insurance, and offer a flexible approach to insurance, instead of on-size-fits-all.
Living within a world where accidents and injuries increase by rate every year, insurance companies and NGOs have to raise awareness for the importance of insurance, for the driver not to be affected financially or suffer any loss after any car accident.
Got any insurance tips to follow or tricks to avoid? Post them in the comments for the benefit of all!