Various Insurance Contracts

Car insurance can be of different types depending on the contract.Car Insurance Contract

 

The third party insurance

 

– Ensuring the most basic, called “third party” was made ​​mandatory in the United States. It covers only the damage (physical and material) caused by the insured to third parties. But you will not be compensated if you break your car in an accident where you are responsible. To qualify for coverage (compensation in case of theft or fault accident), there are cheap no deposit car insurance called “all risk” which covers this risk, but are necessarily more expensive.

 

Universal coverage

 

The third party insurance can, in theory, ensure 100% protection of people in case of accident not responsible. Indeed, if a third party causes an accident because liability insurance is mandatory, you will be necessarily compensated.

 

To allow victims of uninsured people to be compensated, there is a mutual fund car warranty that covers these expenses. The operating principle is quite simple:

 

– If you are a victim of uninsured driver, the mutual fund compensates you like any insurance will compensate. After it turns against the driver and gave him the bill he must repay. In some cases, the uninsured driver will repay all his life.

Accidents can cost millions of dollars

 

Namely: Imagine that accident, you make a children of 10 year old paralyzed which requires the presence of a personal assistance 24 hours/24. If we consider that employees helping disabled children are paid the minimum wage, the minimum wage increases of 3% per year and the life expectancy is 80 years, your accident will cost 24 million dollars without counting damages. A little less convenient, money being placed in the bank and capitalized, but you get the idea. An accident can cost a fortune.

 

You will be ruined … Hence the interest to be well insured

 

To return to mutual fund that ask the drivers uninsured pay for their accident. Money they cannot pay is paid by traditional insurance. In your insurance premium, a portion of the premium is paid to the mutual fund to cover this risk.

Originally posted 2013-05-27 16:57:10.