Motor insurance and its type

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Motor insurance and its type

 Motor insurance

There are two main types of auto/insurance coverage.

Civil liability: Civil liability insurance protects the insured against liability towards third parties in the event of an accident such as property damage, bodily injury or death. In Pakistan, the purchase of third party liability insurance is compulsory for all vehicle owners.

Full: This is the broadest form of coverage. You are protected against financial loss resulting from accidental loss of the vehicle, theft and liability claims against third parties following an accident.

Premium rates depend on several factors, which may include:

Motor insurance and  its type

Make and year of vehicle

Purpose of vehicle use, private or commercial

Tracker installed and geographic location where the vehicle will be used

You can lower your premiums by accepting more risk by increasing your deductible. This means that self-insurance increases the deductible.

Tips for buying automobile insurance

Here are some things you should remember. When buying a new or used car, you must take out insurance. Please note that when the vehicle is sold, the previous owner's insurance coverage lapses.The value or insurance coverage relies on the car's market value. The maximum compensation you will receive is equal to the market value of the car.

Reinsurance occurs if the sum insured exceeds the market value of the car.

There is underinsurance if the sum insured is less than the market value; you cover the difference yourself and you will only be partially reimbursed. For example, if you insure your car for up to 70% of market value, the insurance company will only pay 70% of the total repair cost.

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