Auto-Insurance and Why You Need It
What is auto insurance? To put it completely simply, they pay for the damages done to your auto-mobile in exchange for you paying a premium and in some cases a deductible. A premium is a sum of money your insurance company charges you for a certain policy and a deductible is the amount of money that you are responsible for paying when the damages occur because of an accident.
Perhaps you know what auto insurance is but you want to know why you need it. You may have had it for a while now but have never had to file a claim and thus it may seem that it’s useless, but bear with me. In 2015 there were about 17,317,600 total registered vehicles in Pakistan and as stated by Dawn news, according to the statistics for the first 4 months of 2016, there were five fatal accidents occurring every two days. When you look at it like that you never know when your car may be next in a line of accidents, even the most careful driver is subject to them, and you may have to end up paying huge sums of money if the accident was somehow your fault.
It doesn’t even have to be an accident; you could have to pay for the repairs for your car in case of theft or any sort of natural disaster. Theft is also a problem in Pakistan, make the mistake of parking your car at the wrong place and you’ll come back to find it either gone or completely decimated. Now that you think about it auto insurance might be a good idea right?
There are different types of insurance like, Bodily Injury Liability, Property Damage Liability, Collision, Comprehensive, Uninsured Motorist Coverage, Underinsured Motorist Coverage and Gap Insurance. Some of these are required while others are optional but that completely depends on your state’s laws or whether you’re auto-mobile is financed.
If it is then you will be required to get collision and comprehensive insurance by your bank or lending institution, also personal insurances only cover the private use of your car and not the use of it for commercial reasons like using it to Uber. Although some auto insurers are now offering supplemental insurance products that extend coverage for vehicle owners providing ride-sharing services but at additional cost.
When it comes to Pakistan the risk of being involved in an auto mobile accident is extremely high due to the lax re-enforcement of traffic laws here. People are constantly speeding and over taking others with no regard for their safety and on roads as dangerous as that, auto-insurance is nothing less than a trump card. Even though it may seem that auto-insurance is useless at teams and does nothing more than absorb your money I hope this has helped you realize that it’s much more than that.