Automobile Insurance - Basic Information Guide Automobile insurance is an insurance alternative just like life insurance and health insurance. It is meant to protect you from unexpected damage or harm that can occur whilst you are driving your car. I personally agree with this because there are so many things that happen in life without us expecting them. And when these occur when we are broke we can be left really stranded. Insurance of this nature has so many different aspects to it. There is the part that deals with premiums. Premiums are the payments that you pay to an insurance company so as to get protection. So in the event of an accident it is this money that they use to place you in the situation you would have been in had the accident not occurred. In other terms they use your premiums to compensate you for loss or damage. Such premiums are payable every month or every year, annually. Monthly payments are not exactly for the poor but generally they are done by people who cannot afford to pay annual premium as a lump sum. But when it comes to annual payments they become cheaper when you do the mathematics by dividing the overall payment by 12 months. As I might have mentioned earlier there is something referred to as risk. Risk is the possibility of harm; damage or theft occurring. It is this risk that they use to determine how much you must pay in terms of premiums every month. So the higher the risk, the lower the premiums and the reverse is true. The factors that can cause risk to occur are numerous. Not having security or a tracker on your car can lead to you paying a lot because the car can be stolen easily. Another thing is what lifestyle you lead. An example is that a professional F1 driver would be expected to pay more because of the high and dangerous speeds he is used to driving at. When you go to an insurance company to sign a contract you mist take a driver's license as it is one of their requirements. But if the license has been suspended or revoked the company would normally expect you to provide proof at a later stage, perhaps 3-4months later. They will also ask for your vehicle registration and your positive identification. But this is really it apart from the first premium for that month. Generally insurance is simple to understand but not knowing a few things can be your downfall if you are not careful.
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