Background Information to Car & Vehicle Insurance
Motor vehicle insurance has been described as a necessary evil – even if you pay cash for a motor vehicle and you are the most cautious of motorists, you are at great financial risk if you drive an uninsured vehicle.
Having a good insurance policy puts your mind at ease as you drive and this in itself is one of the biggest vehicle insurance benefits – peace of mind that should you be in an accident or have your car stolen, you are covered!
Motor vehicle insurance has become an important business and people are getting more curious about how to safe guard their cars and other vehicles against vehicle accidents, damage and theft.
Basics of Vehicle & Car Insurance
Motor vehicle insurance is essentially a contract in which an insurance company assumes financial responsibility for any loss the insured may incur through damage or theft to his/her vehicle. The bottom line is that you must read your policy and the schedule and make sure that you clearly understand the terminology, terms and conditions, and any exclusion clauses.
Golden rules of car insurance are:
- Know the promise you’re buying: When you buy car insurance you buy a promise. For years or even decades you may pay your insurer to say: “In certain circumstances that may never arrive, I will give you certain things.” You need to be sure of what these circumstance are and what you will gain from the cover.
- Keep the promise you are making: When you buy your insurance you give your insurer much personal information such as your habits and the ways you will use the items you are insuring. If the information is wrong, sometimes even a little bit wrong, the insurer’s promise won’t hold up.
- It is the insurer’s job to pay you what you are due and not more.
Why do I need Car/ Vehicle Insurance?
The South African vehicle hijackings and road crash statistics provide more than enough evidence to the importance of vehicle insurance. Over the last couple of years the cost of repairs has increased dramatically and there has been a significant increase in the average cost of a claim. An increase in vehicle theft, accidents and rising repair costs force insurance companies to recalculate the risk and cost of insuring our vehicles.
If you are an uninsured driver, you alone are responsible for covering the costs of repairing your car or even buying a new one if it is seriously damaged. You will also bear the legal costs of trying to claim damages from another uninsured driver without the assistance of an insurer.
I need Car Insurance – what do I need to know?
The Ombudsman for Short-Term Insurance in his annual report emphasized the need to educate the public on insurance matters. The Ombudsman for Short-term Insurance in South Africa recovered a record amount of R83.9 million from insurance companies on behalf of complainants in 2007.
A staggering 67 percent of the complaints received in 2007 related to motor vehicles. A large number of complaints arose from a lack of understanding of insurance or a failure to understand the significance of the information given to an insurer when applying for insurance.
There are many insurance companies out there and it can be quite tough deciding which to opt for. Before getting vehicle insurance, it is necessary for you to get a detailed view of different insurance quotes from more than one insurance company. The car insurance quotes may be different for different companies, so it is your responsibility to carefully look into the insurance quotes and then decide which one is suitable for you and your vehicle.
When you buy a car it’s general that you will buy car insurance, but the tricky part is to buy cheap car insurance. Buying cheap car insurance will be easy if you know how to search and compare insurance policy.
Many car insurance companies offer discounted policy, but getting cheaper insurance policy doesn’t mean you get the best car insurance policy. Don’t buy at the first shot, read carefully the total policy conditions; what the policy covers and what the privileges are and compare your policy with other discounted car insurance policy from different companies.
The car owners who are above 50 years old can be the member of the American Association of Retired People (AARP) and the member has to pay only $12.50 a year who is USA citizens. It seems AARP offers heavily discounted car insurance and older people can easily get free online cheap car insurance quotes.
Car insurance premiums won’t lower or discounted for teenage drivers who don’t have driving record. In some cases insurance companies have cheap car insurance for young drivers. Young drivers who pass the recognized driving test can get cheap car insurance or car insurance companies discount for them. Car insurance companies provide car insurance cheap for the good and skilled drivers.
If car drivers have well driving records without any incident it’s for sure that they are going to get car insurance. But being with the same car insurance company again doesn’t mean car owners will get cheapest car insurance, so check what is the policy your current insurance company offers for renew and what is the policy offering from other companies. Compare as many insurance quotes from different policy and sort out which policy has more discount and cheap then other for you as good driver.
Experiencing having car insurance policy car owners may have edit few coverage, so they should check what coverage they need and what coverage are extra while getting renewed the policy. This simple routine check may reduce the insurance premium and if lucky, they can get cheaper car insurance policy then existing one.
If drivers are women, many car insurance companies have special offer for them such as discount or cheaper. When woman driver is going to buy car insurance online, she should first ask free quotes providing detail information and after getting various insurance rates, she can again provide her basic information such as good driving history, driving license and certificate of immediate taking driving test and describe her present situation with the coverage she need. This process may be providing cheap car insurance.
What car drivers don’t know is that buying car insurance often saves their money if they can go the right way. So follow these tips and you can get some idea how to buy cheap car insurance.
Despite the economic recovery, car insurance is one of the few industries where customers are still seeing rising prices year on year.
In part this is due to the increasing number of young and accident prone drivers on the road, but it’s also because insurance companies are aware that most people will happily auto-renew their premium without checking the details. However, with a few tips and tricks, you can easily get cheaper car insurance.
The first and most important step when your new car insurance policy comes through the post is to immediately pick up the phone and start to negotiate the terms.
The rapid rise of insurance comparison websites means that you can arm yourself with a multitude of other quotes in a matter of minutes.
The person in the call centre will be heavily invested through commission to retain your custom, so simply tell them the cheaper car insurance deals that you’ve found and they’ll usually be able to match it or reduce their price.
You can play the more risky game of threatening to leave and it will depend on the person you’re talking to as to whether they’ll simply let you go or will go find a supervisor to knock some more money off.
Drop The Perks
If you’re finding that your cheap car insurance premiums are rising each year, even when you’ve not had an accident, have a look at what additional perks have been added to your policy. Insurance companies are notorious for scaremongering their clients into having more protection than they could possibly need and each level of protection can be charged for.
Typical perks that boost up your premiums include unnecessary levels of medical and legal fee coverage, road side assistance and a courtesy car till you’re back on the road. Regardless of the fact that you can get these perks for cheaper with a breakdown recovery service like the RAC or Green Flag, you’ll still save money by removing these from the policy.
he salesperson you speak to will try to guilt you into keeping them, so make sure you’re focused on the cheap car insurance that awaits you at the end of the phone call.
Have A Higher Excess
Finally, having a higher excess in the case of an accident is a sure fire way of getting cheap car insurance. As a general rule of thumb, you’ll pay an extra £100 in premiums for each £200 less of excess you choose to pay.
Of course, the amount of excess you choose has to be dictated by how much spare cash you have available in the case of an accident, but if you’re a safe driver or don’t do a huge number of miles each year, you should be safe with an excess of £500 which should save you around £200 a year.
Compare Car Insurance Online
Even though, you can do your utmost to keep your vehicle safe, you cannot avoid damages due to some unavoidable circumstances. Auto insurance or car insurance in India can provide the insurer several benefits and can help keep it up and running. In India, third party motor insurance is mandatory under 1988’s Motor Vehicle Act. Online car insurance or auto insurance plans provide financial support to the insurer in the event of damages because of accidents, fire, explosion and the likes. At GIBL, you can compare car insurance online and choose the best plan available in India for your vehicle with latest tools and techniques available.
What is covered under Car insurance in India?
- Third party liability:This online car insurance policy provides compensation for damages caused to third party vehicle due to your fault.
- Accident coverage policy:The coverage is against all types of accident that cause damage of your insured vehicle.
- Comprehensive coverage policy:This is one of the most profitable types of auto insurance policy. In this online car insurance policy, thefts or accidental damages are compensated. Moreover, the policy also provides coverage for personal accidents.
Why should you compare online car insurance plans?
All auto insurance companies in India provide plenty of benefits at a reasonable price. GIBL’s comparison site brings forth all those renowned insurance providers to facilitate a flawless car insurance comparison experience in car insurance. Here, you can compare car insurance features of various insurance policies and buy the best car insurance online the best possible plan that suits your requirements and budget. As a consumer you can rightfully gather knowledge on various car insurance online policies available in the market and understand what is covered and what’s not. GIBL’s blog posts and articles can help you understand the terms and clauses of online car insurance policies in a better way.
Benefits of choosing Car Insurance policy from GIBL
- Get best quotes of top car insurance in India
- Insurers can avail information about newly added benefits
- Latest information on offers and discounts to assist you save money on annual premium
- Get the best car insurance comparison within few minutes
- Purchase motor insurance plans online instantly
- Free consultation with GIBL’s auto insurance experts to get most comprehensive car insurance policies
- Get the best comparison rates directly from the insurer
- Availability of support and reminder service for renewal of car insurance
Car Insurance Renewal
When the time of your car insurance renewal comes, it is best to reconsider your existing auto insurance company. You should assess if the plan was able to deliver all the promised benefits or not. If you are unsatisfied you can choose not to renew your current auto insurance policy; instead you can search and find better car insurance in India and opt for the one that is worth spending your hard-earned money. You have to renew your car policy as per the expiry date of your policy. GIBL offers unique renewal facility online to facilitate policyholders’ quick renewal just by submitting policy details and making payment. It takes just a few mouse clicks you to renew your motor policy from the comfort of your home. When it comes to car insurance in India, GIBL is your one-stop solution.
[Source : https://www.gibl.in/car-insurance/%5D
If you have bought a new car it is mandatory to buy a motor insurance policy. And for existing motor insurance policyholders it is important to renew it in time. Motor insurance is portable –you can shift to another insurance company without losing any benefit you are eligible for.
Most motor insurance policies that are available in the market are similar hence it becomes difficult to choose the best for oneself. However, you can base your decision on certain factors such as brand, policy coverage, customer service, distribution and access, and price.
Brand: This is one of the most important parameter that distinguishes one insurer from another. One can easily check the past record of an insurance company on various parameters such as claim settlement and time taken for claim settlement on their website.
It is important to choose the right insurance cover that suits your requirement. A standard car insurance, commonly referred to as motor package policy, consists of a third party liability cover and an own damage cover. Third party covers is mandatory by law for every vehicle plying on road and own damage cover is optional. However, it is advisable to buy both the covers.
Customer service: Now many insurance companies have started focusing on Over the Counter (OTC) issuance of policies. Agents are provided with technology to ensure faster delivery of motor insurance policies. Apart from this, some companies have been able to demonstrate significant reduction in turnaround time for other service requests like endorsements for effecting any change in an existing policy and cancellation of policies among others.
To make the claim settlement process fast and stress free for customers, in case a vehicle meets an accident, many insurance companies have tied-up with garages for cashless settlement of claims.
Distribution and access: Sometimes, it is observed that one is not aware of whom to reach out to in case of any difficulty. In such a situation, a wide network and multiple distribution and communication channels have become the need of the hour for insurers.
Price: Premium is also an important criterion to buy a motor insurance policy. But your decision should not solely depend on this factor alone. The premium of a car depends on its Insured Declared Value (IDV) and the rate multiplier which is decided by the insurance company. Generally, the model of the vehicle and geography are the two most important factors which decide the premium rate.
Great news for motorists – the Competition and Markets Authority is going to ban exclusive pricing deals between motor insurers and price comparison websites. Why is that good news? It could cut the cost of a typical policy by £20, experts reckon.
The CMA revealed this morning the results of a three year investigation into the £11bn motor insurance market.
It criticised the cosy pricing deals and warned that they prevented insurers from selling their policies more cheaply elsewhere.
More than half of all new car insurance business goes through price comparison websites, and up to 90 per cent of it is priced according to the restrictive deals.
“There needs to be improvements to the way price comparison websites operate,” said Alasdair Smith, the CMA’s deputy panel chairman. “They certainly help motorists look for the best deal, but we want to see an end to clauses which restrict an insurer’s ability to price its products differently on different online channels.”
It has ordered the agreements to end which is likely to happen by early next year, unless there is an appeal by the industry.
Steve White, chief executive of the British Insurance Brokers’ Association, welcomed the ban. He said: “We are pleased that the CMA is outlawing anti-competitive ‘wide’ most favoured nation (MFN) parity clauses as these are detrimental to customers.”
But the insurance industry criticised the CMA for not introducing price controls on the cost of courtesy cars for drivers involved in accidents, a move that had been widely expected.
James Dalton, head of motor insurance at the Association of British Insurers, said: “The fact that the report fails to do anything to address the excessive costs of replacement vehicles – a problem that the CMA itself identified – will be a bitter pill to swallow for honest motorists.”
Meanwhile Janet Connor, managing director of AA Insurance, said: “While of course we welcome any measures that help to contain consumer costs and improve transparency, there remains much greater scope to reduce costs by continuing to tackle the tide of insurance fraud. For example, attempts to exaggerate or make false whiplash injury claims cost up to £90 per policy. This remains a considerable burden on insurance companies but it was outside the remit of this enquiry.”
If you are self-employed, are an independent contractor or if you use your vehicle for any business purposes beyond commuting to and from work, your auto insurance premium is likely tax deductible. However, if you use your car for both personal and professional reasons, only the portion of expenses associated with business use are tax deductible and must be prorated accordingly.
Tax Deductible Premiums: 3 Scenarios
those who receive non-employee compensation are required to submit a 1099 form to the IRS. If you receive income as a business owner or as an independent contractor, you’re receiving non-employee compensation and may be eligible for a tax deduction on your auto insurance. Likewise, if you are a full-time, salaried employee and use your car for work, you may also be eligible for auto expense-related tax deductions. Let’s look at three different scenarios in which deducting a portion of your insurance premium would be applicable:
Business Owner – You’re the sole proprietor of a home remodeling business. 60% of the total miles you drive are spent traveling to and from clients’ homes and back and forth between materials suppliers. Thus, 60% of your auto insurance premium payments will be tax deductible.
Contractor or Freelancer – You’re a freelance photographer and drive 15,000 miles a year, 7,500 miles of which you spend traveling to and from assignments or scouting locations. In this scenario, 50% of your auto insurance premium is tax deductible.
W-2 Employee or Salaried Employee – You are a full-time, salaried executive assistant and run frequent errands for your employer using Vehicle Insurance for your own car. The errands you run for work comprise 15% of your total miles driven. If your employer does not reimburse you, 15% of your total car expenses is tax deductible, including 15% of your insurance premium.
Standard vs. Itemized Deductions
you can choose to deduct driving-related work expenses by using either the standard per-mile deduction rate (for 2014, the rate was .56 per mile) or you can calculate the total cost of your actual expenses.
The standard rate makes calculating expenses simple for self-employed taxpayers. The typical costs of fuel, insurance, depreciation, repairs, tolls, parking fees, licenses and other vehicle expenses are factored into the calculation of this rate. Many Americans who frequently use their vehicles for business purposes elect to use this standard mileage deduction.
Drivers who use relatively expensive vehicles for business purposes may be better off electing to deduct their actual expenses. For example, if you own a 1-ton diesel pickup truck and use it for business-related winter activities such as snow-plowing, you may determine that the per-mile cost of operating this truck is much more than the average vehicle and therefore more than the standard per-mile rate. However, if you choose to itemize your actual deductions, be sure to keep track of your mileage, as well as comprehensive records of all auto-related expenses.
Use the Most Advantageous Option
The IRS encourages taxpayers to calculate their deductions using both methods. The IRS website says: “If you qualify to use both methods, you may want to figure your deduction both ways to see which gives you a larger deduction.
you can only deduct expenses for which your employer does not already reimburse you. If you have a home office, you can deduct all work travel during the day except your first and last rides to and from home. These trips are considered your “commute,” and expenses related to your regular commute to and from work are not tax deductible.
You may also wonder whether or not the premiums you pay for the medical expense portion of your policy can be used as a medical deduction; they cannot.
Not All Vehicles Qualify
The IRS defines a vehicle for the purposes of work-related driving as a four-wheeled vehicle designed for use on public roads. This eliminates motorbikes, scooters and bicycles. The IRS also specifically excludes certain specialty vehicles like taxis, moving vans and ambulances. Vehicles that weigh over 6,000 pounds are also excluded.
For more detailed information, talk to your local tax specialist and give us a call at (800) 258-5101 to find the auto insurance policy that best fits your personal and professional driving needs. You can also find us on the web at AnswerFinancial.com.