How is Car Insurance Coverage Calculated?
(Photo Credit: freepik)
If you own a car, you probably know that having insurance is a must.
But have you ever wondered, "How is car insurance coverage calculated?" Or should you go for higher coverage? Let's break it down in a simple way!
What is Car Insurance Coverage?
Car insurance coverage is the maximum amount your insurer will pay if your car is damaged, stolen, or destroyed. The coverage amount depends on the type of insurance you choose. If you want to check your coverage, you can find it in your insurance policy document or e-Policy.
How Does Coverage Affect Your Insurance Premium?
Simply put, the higher your coverage, the higher your premium because the insurer takes on more risk. However, this also means better protection for you!
Other factors affecting your premium include:
- Age of your car
- Usage frequency
- Your driving history and accident records
(Photo Credit: freepik)
How is Car Insurance Coverage Calculated?
Insurance companies usually calculate coverage based on 80% of the market value of your car. Here’s an example:
- Brand-new car price: 1,000,000 THB
- Year 1 coverage: 80% x 1,000,000 = 800,000 THB
- Year 2 coverage: 80% x 800,000 = 640,000 THB
Typically, coverage decreases by 10-20% per year as your car depreciates in value.
How Much Coverage Should You Choose?
You might be wondering, "Should I choose high or low coverage?" Here are the pros and cons:
- High Coverage: Higher premium, but better protection. Ideal for new cars or those who want maximum peace of mind.
- Low Coverage: Lower premium, but less protection. Suitable for older cars or experienced drivers looking to save money.
In the end, there’s no one-size-fits-all answer. Choose the coverage that best fits your budget and driving habits!
Looking for the best car insurance deal? Let Motorist help you find the most suitable and cost-effective policy for your car!
Claim your free car valuation today!
Read More: Car Insurance Policy: 8 Important Things You Must Check!
Looking for a car appraisal? You can contact us for a free car valuation within 24 hours…
