Auto Insurance
Essay Preview: Auto Insurance
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[pic 1] Kingdom of Saudi Arabia Ministry of Higher Education University of Dammam College of Business Administration[pic 2]Auto Insurance [pic 3]Shoug AlMousa 2140007892Njoud AlMaboob 2140008692Weam Moria 2140001573 Aisha AlQahtani 2140004542Muneera Alshaharani 2140000126Section: 36AbstractAuto insurance is known one of the most important and popular types of insurance taken by millions of people around the world to safeguard their vehicles from damages and liabilities. It is more of a necessity then a luxury and provides a safety net for your automobiles. In simple terms. It is an agreement between insured and insurer “insurance company” whereby the insured needs to pay a premium regularly and in case the vehicle gets damaged in the event of any accident, the company will pay all the insured liabilities. The amount of liability depends upon the nature of the coverage plan have been chose.Auto insurance needs the insured to be informed with two terms, the first one is premium, the amount that the insured regularly need to invest with the insurance company, and the second term is deductible, the number of insured is liable to pay in case of any liability on damage of the insured vehicle. The deductible amount is mentioned beforehand in the insurance policy. There is different coverage plans for each insurance companies and the damages that each of these plans cover also differ. Thus, some of the insurance plan covers expenses on accidents and damages and pays repairing cost, legal fees or any kind of medical payments while the others include the liability when the car gets stolen or is somehow vandalized. What is an “Auto Insurance?”An auto insurance is a policy purchased by the vehicle owner to mitigate or minimize the losses and costs associated with getting into an accident. Instead of paying out of your saving pockets for the accidents. people pay annual premiums to an auto insurance company, the company then pays all or most of the costs associated with an auto accident or other vehicle damage.Breaking down “Auto insurance” premiums, or the amount policyholders pay to be insured, it depends on: the type of insurance, the price of the car, age and years of driving experience and other factors. Most states and countries mandate that all vehicle owners purchase a minimum amount of auto insurance, but many people purchase additional insurance to further protect themselves. A poor driving record or the desire for more FULL coverage will lead to higher premiums. However, you can reduce your premiums by agreeing to take on more risk, which means increasing your deductible. (Anon., 2016)
The Beginning of Insurance:It is believed that the history and concept of insurance is as old as humanity itself. Insurance policies can even be traced all the way back to ancient Babylonia when merchandisers had loans they paid lenders an additional sum to provide a guarantee against losses if their goods or commodities were lost or harmed during shipping.Of course, as societies have grown and prospered throughout various industries, insurance has had to adapt to all the changes.After the arrival of cars, and as more and more automobiles started hitting the roads, one thing was bound to happen: more and more accidents occurred. This has led to arguments over who was responsible for injuries and damages to property that were a direct result of these accidents.(Ilumba, 2015)The purpose of Auto InsuranceAutomobiles coverage “insurance” can serve many purposes depends on the persons needs and situations. Mainly, as mentioned before most states require motorists to carry a policy at their required limits to ensure that there is compensation in place if a traffic accident occurs and there are injuries and/or property damage as a result. (Anon., 2016) it can also provide valuable protection to an insureds assets, liabilities, personal injuries, vehicles, and financial hardship.(Anon., 2015)Importance of Auto InsuranceAuto insurance, like any other insurances, is used to protect the individual and cover any financial losses also protects your vehicle against damages that occur in an accident. While insurance can be more painful than its benefits because of the expensive premiums can be, but there’s many reasons that Auto insurance is important: (Streetdirectory, 2016)Legal requirements: The bare minimum every driver of a motorized vehicle is required to purchase is liability coverage. and it is important to have the minimum amount as required by law. Without basic liability coverage, a driver could be given a ticket, have their driver’s license revoked, or possibly even be arrested and may also find yourself being charged heavy fees and fines.Protect you from personal liability: If you are in an accident and you are at fault you can be held personally responsible for the costs if the person is injured or if the person is killed. These costs can ruin family savings. Protect yourself: personal auto insurance can be set up to fit your individual or family needs. This policy is meant to protect your personal assets in the event of an accident. This may include medical expenses or liability charges.It is necessary for all automobile drivers in Saudi Arabia to have vehicle insurance, to protect the liability of the driver and third persons that may be involved in an event referred with a car or the driver. The vehicle insurance, same in the western hemisphere, it is a derivative instrument that only works when the user reports an incident to the insurance company. If the user does not have any event in the fiscal year, there is no reimbursement by the insurance company. The Ministry of Interior (MOI) works together with insurance companies and assigns an MOI account where the user may register his car and the insurance conditions. The registry is available online, and the user can check his status (Life in Saudi Arabia, 2014). All drivers in the Kingdom of Saudi Arabia have an identification number or MOI account and a password.