Motor Insurance Reference

Posted by Nehal Preet on November 30th, 2022

I'm not sure about you, but motor insurance is a thought that I still find a bit frustrating. Sure, I pay my monthly premiums, hope for the best and stress when I need to put in a claim, but apart from that I essentially file everything related to insurance cover to the back of my mind and just expect the best.

I think insurance policies, regardless of whether it's motor insurance, home insurance, health insurance, or term life insurance should be issued with a comprehensive guide of all the terms and phrases linked to the specific type of insurance. In that way even the normal individual on the street (that includes you and me!) will have a better understanding of what our insurance coverage plans entail and what we are in actual fact paying for. Learn about Claims Software, Claims Management Systems For Insurance, Life Insurance Software, and much more related to the same. Visit the website for more information.

Let's take a look at a couple of often used keyword phrases in the motor insurance industry:

Named driver versus regular driver. When you purchase a motor insurance policy, you (a policy holder) will most likely be the regular driver of the motor vehicle. This means that most of the times the vehicle is on the streets, you will be the one behind the steering wheel. It is nonetheless also doable to add a named driver to your policy.

Say by way of example your spouse, child or other person will from time to time drive the car, this has to be brought to the insurance firm's attention and this person should be included on your policy as a named driver.

If your vehicle is involved in an accident, and neither a named nor the regular driver was driving, your insurance provider may actually decline your claim. Do not forget that an insurance company will consider your entire risk user profile before determining your monthly premiums, so if your named driver(s) doesn't have a good insurance track record, this will have a negative impact on your insurance policy profile and consequently your insurance premiums.

New for old insurance. In insurance terminology, this means that if an item is lost or destroyed it will be replaced with a completely new item. Normally, this is more relevant to home insurance where you might have to replace a stolen TV. Unfortunately, motor insurance works slightly differently. The value of your car or truck decreases basically as soon as you drive your vehicle off the showroom floor.

Therefore if your motor vehicle is stolen when it's about a year old, the insurance organization will generally calculate what the current market value of your vehicle is, and only compensate you for that amount. If you wish to insure your car at replacement value you will end up with an almost unaffordable monthly premium as the risk to the insurance vendor is simply too high!

Agreed value. As stated in the preceding paragraph, a motor vehicle is usually insured at market value. It is however also possible to insure your automobile at retail value or trade worth. Be sure that you discuss your options with an insurance agent or broker to determine which type of policy would suit your motor vehicle and requirements best.

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Nehal Preet

About the Author

Nehal Preet
Joined: April 21st, 2020
Articles Posted: 62

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