AUOTMOBILE INSURANCE

Automobile insurance (also known as auto insurance, car insurance, or motor insurance) is insurance purchased for cars, trucks, motorcycles, and other road vehicles. Its primary use is to provide financial protection against physical damage and/or bodily injury resulting from traffic collisions and against liability that could also arise there from. The specific terms of vehicle insurance vary with legal regulations in each region. To a lesser degree vehicle insurance may additionally offer financial protection against theft of the vehicle and possibly damage to the vehicle, sustained from things other than traffic collisions.

HISTORY
Widespread use of the automobile began after the First World War in the cities. Cars were relatively fast and dangerous by that stage, yet there was still no compulsory form of car insurance anywhere in the world. This meant that injured victims could often not get any compensation in an accident, and drivers often faced considerable costs for damage to their car and property. A compulsory car insurance scheme was first introduced in the United Kingdom with the Road Traffic Act 1930. This ensured that all vehicle owners and drivers had to be insured for their liability for injury or death to third parties whilst their vehicle was being used on a public road. Germany enacted similar legislation in 1939.

AUTO INSURANCE IN INDIA

Auto Insurance in India deals with the insurance covers for the loss or damage caused to the automobile or its parts due to natural and man-made calamities. It provides accident cover for individual owners of the vehicle while driving and also for passengers and third party legal liability. There are certain general insurance companies who also offer online insurance service for the vehicle. The top motor insurance companies in India are as follows: ICICI Lombard General Insurance Bajaj Allianz HDFC Ergo IFFCO-Tokio General Insurance Cholamandalam MS General Insurance Oriental Insurance Royal Sundaram Alliance Tata AIG HSBC India The New India Assurance Company United India Insurance Company Ltd.

Auto Insurance in India is a compulsory requirement for all new vehicles used whether for commercial or personal use. The insurance companies have tie-ups with leading automobile manufacturers. They offer their customers instant auto quotes.

Auto premium is determined by a number of factors and the amount of premium increases with the rise in the price of the vehicle. The claims of the Auto Insurance in India can be accidental, theft claims or third party claims. Certain documents are required for claiming Auto Insurance in India, like duly signed claim form, RC copy of the vehicle, Driving license copy, FIR copy, Original estimate and policy copy. There are different types of Auto Insurance in India : Private Car Insurance In the Auto Insurance in India, Private Car Insurance is the fastest growing sector as it is compulsory for all the new cars. The amount of premium depends on the make and value of the car, state where the car is registered and the year of manufacture. Two Wheeler Insurance The Two Wheeler Insurance under the Auto Insurance in India covers accidental insurance for the drivers of the vehicle. The amount of premium depends on the current showroom price multiplied by the depreciation rate fixed by the Tariff Advisory Committee at the time of the beginning of policy period. Commercial Vehicle Insurance Commercial Vehicle Insurance under the Auto Insurance in India provides cover for all the vehicles which are not used for personal purposes, like the Trucks and HMVs. The amount of premium depends on the showroom price of the vehicle at the commencement of the insurance period, make of the vehicle and the place of registration of the vehicle. The auto insurance generally includes: Loss or damage by accident, fire, lightning, self ignition, external explosion, burglary, housebreaking or theft, malicious act. Liability for third party injury/death, third party property and liability to paid driver On payment of appropriate additional premium, loss/damage to electrical/electronic accessories The auto insurance does not include: Consequential loss, depreciation, mechanical and electrical breakdown, failure or breakage When vehicle is used outside the geographical area War or nuclear perils and drunken driving.

COVERAGE LEVELS
Vehicle insurance can cover some or all of the following items: The insured party (medical payments) The insured vehicle (physical damage) Third parties (car and people, property damage and bodily injury) Third party, fire and theft In some jurisdictions coverage for injuries to persons riding in the insured vehicle is available without regard to fault in the auto accident (No Fault Auto Insurance) The cost to rent a vehicle if yours is damaged. The cost to tow your vehicle to a repair facility. Different policies specify the circumstances under which each item is covered. For example, a vehicle can be insured against theft, fire damage, or accident damage independently.

TYPES OF AUTO INSURANCE POLICY

The cost of even a small repair makes car insurance nice to have. When we start adding in the medical expenses that can go with a car accident, insurance becomes downright necessary. In many states, insurance is even a legal requirement before you can drive your car out on the road. But a wide variety of options are available when it comes to insurance there are actually seven different types of car insurance you can choose from in most cases and it can be difficult to decide just what type of auto insurance is the best choice for you, your vehicle and your budget. Here is a list of the seven types and what you need to know about each one. 1. Liability Insurance When your state requires that you carry some sort of insurance for your car, theyre usually looking for liability insurance. In the event that you are in a car accident and the police decide it is your fault, liability insurance covers the cost of repairing any property damaged in the crash (such as cars or buildings), as well as the medical bills from resulting injuries. Most states have a minimum requirement for liability insurance coverage that you absolutely must have. However, it usually makes sense to go beyond that minimum requirement if you can afford the payment. Thats because you are personally responsible for any claims that exceed your coverages upper limit. In the event that you are in an accident, you dont want to run the risk of having to pay a significant amount of money out of your own pocket. How much liability insurance you need depends on whether you have a lot of assets to protect, as it is more important to have higher levels of coverage just in case of a catastrophe.

2. Collision Insurance The biggest problem with carrying only liability insurance is that if there is an accident, you may wind up without the money to repair your own vehicle. A collision insurance policy makes it so that someone else your insurer will pay for the repairs to your car. If your car is totalled in an accident, a collision insurance policy will pay out the value of your car.
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While the payout wont cover for a brand new vehicle, the sum will equal approximately what the car was worth before the accident. Collision insurance isnt a must-have, as far as insurance goes. If your car is older, it may not be worth paying for insurance, especially if you can work on saving up enough to replace the car if necessary. If you have a good-sized emergency fund, you may be safe without collision insurance. If youve chosen a more expensive car or your car is relatively new, however, collision insurance can help you sleep much better at night. 3. Comprehensive Insurance Liability and collision insurance policies exclusively cover car accidents. If something else happens to your car weather damage, theft, an animal collision you wont be able to get your insurance company to address the problem. With a comprehensive insurance policy, however, your insurer will handle just about any situation that comes up. A comprehensive insurance policy is one of those things that are nice to have. However, coverage can be pricey and may not be worthwhile if your car would be relatively easy for you to replace, if you had to. Note though that you can bring down the price of this policy if your vehicle has an anti-theft and tracking devices installed. 4. Uninsured Motorist Protection Just because the law requires everyone to have insurance doesnt actually mean thats the way things work out. Even if a driver has a liability insurance policy, most states have relatively low minimums that may not cover all of the expenses that can go along with an accident. One of the worst things that can happen is that you get stuck with the bills in an accident that wasnt even your fault. The decision to get a policy that covers damage by an uninsured motorist isnt as clear cut as other policies. In theory, even if a driver doesnt have enough insurance to cover damages during an accident, he will still have an obligation to cover the costs out of pocket. Its only when the person at fault doesnt have any money that there can be problems. 5. Medical / Personal-Injury Protection The costs associated with treating injuries after a car accident can be astronomical. In order to cover those costs, medical and personal-injury protection is available. No matter who is at fault, such protection will cover your medical bills along with those of your passengers. If you have a good health insurance plan, however, its far less likely that medical and personal-injury protection will be useful to you. And considering how much more a general health insurance policy covers, it should be your first choice.

6. No-Fault Insurance So far, no-fault insurance is available in twelve states. This option covers injuries and property damage, no matter who is ultimately responsible for a given accident. The decision to choose no-fault insurance really depends on what other insurance options are available to you and at what price. Some no-fault policies can be expensive, making it more cost-effective to choose other options, especially if your car is inexpensive to replace. 7. Gap Insurance If you are still making car payments, gap insurance may be a good choice. Its meant for drivers who still owe money on their cars and need to pay off the vehicle if it is totaled in an accident. Its generally a good choice if you owe more on your car than you could easily pay off on short notice. Gap insurance is especially worthwhile if you owe more on the car than you could get for it if you sold it today, since many insurance policies will only cover the value of the car, rather than the cost to replace it. Some lenders may require you to have gap insurance or something similar until you pay off the vehicle, so you may already have it whether you know it or not.

BASIS OF PREMIUM CHARGES

Depending on the jurisdiction, the insurance premium can be either mandated by the government or determined by the insurance company, in accordance with a framework of regulations set by the government. Often, the insurer will have more freedom to set the price on physical damage coverages than on mandatory liability coverages. When the premium is not mandated by the government, it is usually derived from the calculations of an actuary, based on statistical data. The premium can vary depending on many factors that are believed to have an impact on the expected cost of future claims. Those factors can include the car characteristics, the coverage selected (deductible, limit, covered perils), the profile of the driver (age, gender, driving history) and the usage of the car (commute to work or not, predicted annual distance driven). Gender On 1 March 2011, the European Court of Justice decided insurance companies who used gender as a risk factor when calculating insurance premiums were breaching EU equality laws. The Court ruled that car-insurance companies were discriminating against men. Age Teenage drivers who have no driving record will have higher car insurance premiums. However, young drivers are often offered discounts if they undertake further driver training on recognized courses, such as the Pass Plus scheme in the UK. In the US many insurers offer a good-grade discount to students with a good academic record and resident-student discounts to those who live away from home. Generally insurance premiums tend to become lower at the age of 25. Some insurance companies offer "stand alone" car insurance policies
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specifically for teenagers with lower premiums. By placing restrictions on teenagers' driving (forbidding driving after dark, or giving rides to other teens, for example), these companies effectively reduce their risk. Senior drivers are often eligible for retirement discounts, reflecting the lower average miles driven by this age group. However, rates may increase for senior drivers after age 65, due to increased risk associated with much older drivers. Typically, the increased risk for drivers over 65 years of age is associated with slower reflexes, reaction times, and being more injuryprone. U.S. driving history In most U.S. states, moving violations, including running red lights and speeding, assess points on a driver's driving record. Since more points indicate an increased risk of future violations, insurance companies periodically review drivers' records, and may raise premiums accordingly. Laws vary from state to state, but most insurers allow one moving violation every three to five years before increasing premiums. Accidents affect insurance premiums similarly. Depending on the severity of the accident and the number of points assessed, rates can increase by as much as twenty to thirty percent. Any motoring convictions should be disclosed to insurers, as the driver is assessed by risk from prior experiences while driving on the road. Marital status Statistics show that married drivers average fewer accidents than the rest of the population so policy owners who are married often receive lower premiums than single persons. Vehicle classification Two of the most important factors that go into determining the underwriting risk on motorized vehicles are: performance capability and retail cost. The most commonly available providers of auto insurance have underwriting restrictions against vehicles that are either designed to be capable of higher speeds and performance levels, or vehicles that retail above a certain dollar amount. Vehicles that are commonly considered luxury automobiles usually carry more expensive physical damage premiums because they are more expensive to replace. Vehicles that can be classified as high performance autos will carry higher premiums generally because there is greater opportunity for risky driving behavior. Motorcycle insurance may carry lower property-damage premiums because the risk of damage to other vehicles is minimal, yet have higher liability or personal-injury premiums, because motorcycle riders face different physical risks while on the road. Risk classification on automobiles also takes into account the statistical analysis of reported theft, accidents, and mechanical malfunction on every given year, make, and model of auto. Distance Some car insurance plans do not differentiate in regard to how much the car is used. There are however low-mileage discounts offered by some insurance providers. Other methods of differentiation would include: over-road distance between the ordinary residence of a subject and their ordinary, daily destinations.

Credit ratings Insurance companies have started using credit ratings of their policyholders to determine risk. Drivers with good credit scores get lower insurance premiums, as it is believed that they are more financially stable, more responsible and have the financial means to better maintain their vehicles. Those with lower credit scores can have their premiums raised or insurance canceled outright.[27] It has been shown that good drivers with spotty credit records could be charged higher premiums than bad drivers with good credit records.[28]

GENERAL TYPES OF FRAUDS IN AUTO INSURANCE

PHANTOM VEHICLES A phantom vehicle is one that does not exist. A fake title and registration is created for which an insurance policy is secured. Miraculously the car is reported stolen after the insurance is purchased and a theft claim is made. This fraudulent scheme is usually done with cars that are more expensive as they produce a larger settlement claim for the scammer.

EXPORT FRAUD A new car is purchased by an owner and an insurance policy is bought. The car is immediately reported stolen as soon as the policy becomes effective. In reality, the car is shipped overseas, where it is sold on the black market for a profit. The new car owner receives the proceeds from the fraudulent insurance claim and the profits from the black market sale of the car overseas.

AUTO GLASS SCAMS Often you will see booths set up at various locations advertising complete windshield repair on vehicles for owners who hold full insurance. This scam involves windshield being replaced unnecessarily and scammers billing insurance companies for features never installed. The scammer gets the driver to agree to a windshield replacement then contracts a company to do the job for less than the insurance pays out, and they pocket the difference.

ARSON FRAUD This is an old trick where the scammer sets fire to their car to disguise it and claims it has been stolen in order to collect on the payout.

CONSEQUENCES OF SCAMS/FRAUDS Each of these scams affects not only the insurance companies that pay the claims but all persons insured. The result of these schemes is higher premium rates, particularly for luxury vehicles and those most prone to false theft claims. Reducing common fraudulent insurance claims helps to hold down claims expenses and lower the cost of coverage for all motorists.