Auto Car Insurance Policy: how does it work?

An auto insurance policy is a contract between an insured and an insurance company that states that the insurance company will provide financial coverage if the insured vehicle is damaged or involved in an accident.

An auto insurance policy typically covers medical expenses and property damage resulting from a car accident. It can also cover other events, such as theft, fire, and vandalism. The type of coverage varies depending on the policy and the state in which the insured is located.

Auto insurance policies can include different types of coverage, such as liability, which covers damage caused to other people or property in an accident, or collision coverage, which covers damage to the insured vehicle in the event of a crash. Policyholders can customize their policies to suit their needs and budget.

What is the car insurance policy?

The policy is a document that we must understand to make it effective in the event of an accident. According to Nationwide Mutual Insurance Company, it is distinguished by being a contract between the user and the insurance company where the rights and obligations of both are established, with the insurance contracted.

In it you can see the coverage, validity, and data of the car. Since, based on what is described, you will be able to make use of each of the benefits it offers you. Your policy must be made up of:

• General conditions indicate the coverage, exclusions, and basic obligations of the client and the insurer.
• Specific conditions, the coverage considered in your policy, and its limits are specified.

How does an auto insurance policy work?

The insured purchases an auto insurance policy from an insurance company. The price of the policy will depend on the level of coverage the insured chooses, as well as other factors, such as their driving history, the type of vehicle they own, and geographic location.

If the insured is involved in a car accident or experiences some other type of event covered by their policy, they must file a claim with their insurance company. This may involve filling out a claim form and providing evidence, such as photographs of the damage or police reports.

The insurance company reviews the claim and determines whether the event is covered by the insured’s policy. If so, the insurance company will pay covered expenses, such as medical costs and property damage, up to the coverage limit stated in the policy.

In some cases, the insurance company may work directly with service providers, such as auto repair shops or healthcare providers, to pay the insured’s claims.

It is important to note that the details of how an auto insurance policy works can vary depending on the insurance company and the specific policy. Insureds should read their insurance policy carefully to understand their coverage and specific claims procedures.

How do I know my car insurance policy?

If you want to know what type of car insurance policy you have, you can directly access the page of the Mexican Association of Insurance Institutions (AMIS) and just add the serial number or NIV and it will give you all the details of your insurance.

Types of insurance policy

In Mexico, there are various types of insurance policies according to the needs you want to cover and protect. Every time you take out insurance they must give you your policy. Therefore, the ones you can find are:

• Home Policy.
• Life and Savings Policy.
• Auto policy.
• Major Medical Expenses Insurance Policy.
• Policy for companies.
• Fleet policy.
• Pet policy.

Coverage in an Auto Insurance Policy

The most common coverages in auto insurance are:

Broad: they cover you against all eventualities such as unit theft, property damage to your own and others, medical expenses, occupants, and legal support, to name a few.

Limited: it is the same as broad, but the material damage caused to your vehicle is omitted. That is, here you pay the repair costs of your vehicle.

Civil Liability: this is practically the most common, it specifically covers material damage to third parties and medical expenses of the vehicle with which you were hit.

Special: there is a fourth option which is Premium or special coverage, these are the most expensive and offer you unique benefits such as a unit loan, greater monetary coverage for benefits in theft and material damage, etc.

Advantages of having car insurance:

Have support: The policy issued to you by the insurer will cover basic or specific aspects according to the coverage. The insurance company will support you and provide you with all the attention you need, even if it affects third parties.

Protect your assets: By insuring your car you guarantee that in the event of theft or total loss, you will be able to recover a significant percentage of the value of your vehicle. It doesn’t matter if your car is new or used, if you have already paid for it or acquired a loan, there is no doubt that it is an investment that you cannot miss.

Have support for medical expenses: In the event of an accident that causes injuries to you or your companions, medical expenses are covered by the insurance company.

Road assistance included: If you need road assistance due to changing tires, breaking down, passing power, and sending gasoline, you will have emergency towing service and you will not have to pay anything, since it is included in your insurance.

Legal defense and legal advice: By taking out your Auto Insurance you will forget about legal issues; Your insurer will assign you expert support in the event of legal assistance for an accident with your car.

Aspects within your car insurance policy

Insurance policies include coverage such as:

Civil liability: protects the driver from any liability he or she may have in the event of a traffic accident in which he or she is responsible.

Third-Party Damage: Protects the driver from the cost of repairing any damage to another person’s property caused in an accident for which he or she is at fault.

Driver Property Damage: Protects the driver from the cost of repairing any damage to his or her vehicle in the event of an accident in which he or she is at fault.

Personal injuries: covers medical and rehabilitation expenses in the event of injuries sustained in a traffic accident.

Collision: Covers the costs of repairing the driver’s vehicle in the event of a collision, regardless of who is at fault for the accident.

Theft: Covers the cost of replacing the vehicle if it is stolen.

Fire: Covers the cost of replacing the vehicle if it catches fire.

It is important to keep in mind that policies may vary depending on the insurer, so it is advisable to carefully read the terms and conditions of the policy before purchasing it.

Features of an auto insurance policy

Some of the features of an auto insurance policy may include:

Coverage and limits: The policy must include detailed information about the coverage offered and the limits of each of them. Coverages may include liability, collision coverage, third-party damage coverage, and personal injury coverage, among others.

Deductible: The policy may include a deductible, which is an amount that the insured must pay out of pocket before the insurance will cover the rest of the cost of the repair.

Validity period: The policy will include the duration of the coverage period, which is usually annual. It is important to renew the policy before it expires to maintain continuity of coverage.

Premiums: The policy must include the cost of the premium that the insured must pay for the insurance. Premiums can vary depending on several factors, such as the driver’s age, vehicle type, driving history, etc.

Conditions and exclusions: The policy must include the conditions that the insured must meet for the insurance to be effective, as well as the exclusions that apply in certain situations.

Other important factors

Claim procedures: The policy must include the procedures that the insured must follow in the event of filing a claim, as well as the deadlines that must be respected.

Roadside assistance: Some policies may include roadside assistance, such as towing in case of breakdown, tire changing service, etc.

Customer Service: The policy should include contact information for the insurance company so that the insured can contact it if they need assistance or have questions or problems related to their policy.

It is important to carefully read the features of the auto insurance policy before purchasing it to ensure that you understand all the conditions and terms of the policy.

How to take out a car insurance policy?

If you think that taking out insurance is a tedious, bureaucratic process full of documentation, you are living in the past. Thanks to the use of the Internet and the changes in our lives due to the global pandemic, more practical and useful tools have emerged to find and take out an insurance policy, without having to leave home.

Now you can take out insurance from home through an online insurance comparator that allows you to access the information necessary to compare, analyze, select, and contract an insurance policy with a reliable nationwide insurance company.

When it comes to protecting your automotive assets, it’s essential to make a smart decision that gives you peace of mind behind the wheel. That is why by quoting insurance with AXA, Seguro Quálitas, GNP Seguro de Auto, Cotizar Seguro Mapfre, Seguro de Auto Chubb, and other prominent insurers in Mexico, you will be able to access a wide range of options for your auto insurance.

Although you can find a wide variety of insurance companies and products on the Internet, not all of them are reliable. The task of an insurance comparator is to offer you protection and confidence by presenting you with the best insurance options for your safety and economy.

At SeguroInteligente.mx we are an online insurance comparator where you can quote your insurance as follows:

1. Enter the website:  https://segurointeligente.mx/
2. Select the insurance or coverage you are looking for from the menu.
3. Fill out the form specifying your requirements and needs.
4. Wait for one of our specialized advisors to contact you.
5. Ready!

Key concepts of your car insurance policy

When purchasing your insurance you must know the terms of each part of your contract.

Coverage

It is the protection commitment contracted by the user and that the insurer guarantees to the client.

The specific coverage to which extent the insurer will respond, that is, whether the insurance will cover the client in the event of total or partial theft, material damage, accidents, or legal assistance, among others.

Coverage is usually divided into packages and the most common are:  extensive, limited, and basic.

Comprehensive coverage generally includes all types of coverage,  limited is lower than comprehensive because it excludes property damage coverage. And the basic only includes basic coverage, it does not include material damage or vehicle theft.

Although these coverages may vary according to each insurer, they are generally handled that way.

General conditions

In this section you will be able to find out how the insurer’s response will be in the event of an incident, you will also know the limitations.  

This document defines the risks and coverage included in the contract that both the insurer and the client must comply with.

Coinsurance

It is represented by a percentage that defines the sum that the insured must cover for the expenses of each claim. Once covered, the insurer will pay the remaining costs.

Insurers have defined a coinsurance limit with a maximum amount that you must pay for the concept.

Deductible

It is a fixed sum established by the insured for the first covered expenses.  This is applied once a year.

The percentage is established in the insurance contract, it is usually found in the terms of your policy.

An example of deductibles is 5%, in case of property damage. This means that the insured must cover % of the total cost of repairing their vehicle.

Cousin

This is the price of the insurance, for the coverage package that the client wishes to contract.

This risk is determined by the insurer by evaluating factors such as gender, age, address, characteristics of the car, and incidences of previous accidents.

Other key terms

Sum assured

It is the  maximum sum that the insurer undertakes to pay to the insured, this is established in the policy.

Its value can be determined by the commercial value of the car at the time of an incident or repair costs.

Civil Liability

Minimum coverage that the insured can contract, covers damages caused by the insured to third parties to their persons or material property.

Generally, any basic coverage package includes this type of liability in its general conditions.

Risk

It is an unforeseen event for which coverage is contracted;  insurers generally calculate it based on the demographic data of the insured.

Knowing these terms will also help you when purchasing insurance to evaluate the service and coverage so that you know which company is best for you.

Benefits of knowing your car insurance policy :

Knowing your policy allows you to use it as necessary in times of emergency or to cancel it in time. The main benefits of knowing what it consists of:

• Protection of your car in any situation.
• Car maintenance.
• Safety when driving without worries.
• You can make it effective in any problem.
• You know the expiration date for insurance renewal.
• You have advice from agents.

What doesn’t your Auto insurance cover?

These are the exclusions that your car insurance does not cover:

1. Coverage that you have not contracted and that is not specified in your policy.
2. Damage suffered or caused by the car when it is driven by a person who does not have the appropriate driver’s license to drive the vehicle.
3. Loss or damage caused directly or indirectly by war operations or acts of terrorism.
4. Damage suffered or caused by your car due to overloading or excessive traction about its resistance, capacity, or number of occupants.
5. Damage suffered by the occupants that results in civil liability, criminal liability, or professional risks.

What are the general conditions of an Auto Insurance policy?

The general conditions of an auto insurance policy may vary depending on the insurer. However, below are some of the general conditions that are usually included in an auto insurance policy:

Definitions: The policy should include definitions of key terms used in the policy, such as “accident,” “driver,” “insured vehicle,” etc.

Purpose of insurance: The policy must indicate the purpose of insurance, that is, what is covered by the policy.

Coverage: The policy must indicate the coverages included in the insurance, as well as the exclusions and limitations of each coverage.

Premium: The policy must indicate the premium, that is, the cost that the insured must pay for the insurance.

Coverage period: The policy must indicate the coverage period, that is, the time during which the insurance is in force.

Conditions for coverage: The policy must indicate the conditions that must be met for the coverage to be effective, such as the obligation to notify the insurance company in the event of an accident, proper maintenance of the insured vehicle, etc.

Procedures for submitting a claim: The policy must indicate the procedures that must be followed to submit a claim, including the deadlines that must be respected.

Obligations of the insured: The policy must indicate the obligations that the insured has with the insurance, such as the obligation to provide accurate information, the obligation to notify the insurance company in case of changes in relevant information, etc.

It is important to carefully read the general conditions of the auto insurance policy before purchasing it and, if in doubt, consult with the insurance provider.

What determines the price of an auto insurance policy?

The price of an auto insurance policy can vary significantly depending on several factors, including:

Type of Coverage: The type of coverage chosen, such as liability, collision coverage, theft coverage, etc., will affect the price of the policy.

Vehicle value: The value of the insured vehicle is also an important factor in determining the price of the policy. More expensive vehicles typically have higher insurance premiums.

Age of driver: Younger drivers typically pay higher insurance premiums than more experienced drivers, because young drivers have less experience and are therefore more likely to get into traffic accidents.

Driving History: The insured’s driving history, including any traffic violations or previous accidents, also affects the price of the policy. Drivers with clean driving records typically pay lower insurance premiums.

Zip Code: The geographical location of the insured can also affect the price of the policy, as areas with higher rates of auto theft or traffic accidents may have higher insurance premiums.

Use of the vehicle: The use of the vehicle, such as annual mileage and whether it is used for business or personal purposes, also affects the price of the policy.

Additional Coverages: Additional coverages that are chosen, such as glass coverage, personal injury coverage, etc., may also increase the price of the policy.

It is important to compare different insurance options and providers to find the policy that best suits the policyholder’s needs and budget.

What advantages does having Auto Insurance give you?

1. Have a backup: The policy issued to you by the insurer will cover basic or specific aspects according to the coverage. The insurance company will support you and provide you with all the attention you need, even if it affects third parties.

2. Protect your assets: By insuring your car you guarantee that in the event of theft or total loss, you will be able to recover a significant percentage of the value of your vehicle. It doesn’t matter if your car is new or used, if you have already paid for it or acquired a loan, there is no doubt that it is an investment that you cannot miss.

3. Have support for medical expenses: In the event of an accident that causes injuries to you or your companions, medical expenses are covered by the insurance company.

4. Road assistance included: If you need road assistance due to changing tires, breaking down, passing power, and sending gasoline, you will have a tow truck service in emergencies and you will not have to pay anything, since it is included in your insurance.

5. Legal defense and legal advice: By taking out your Auto Insurance you will forget about legal issues; Your insurer will assign you expert support in the event of legal assistance for an accident with your car.

If you are looking for insurance for your car, at  SeguroInteligente.mx we advise you so that you can find a plan tailored to you at the best price.