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The Clueless Girl's Guide To Car Insurance

Filed under: Real World Things You Should Know About.

Now that you've pulled the trigger and committed a good deal of your financial resources toward the purchase of a new car, be prepared for its insurance. You will spend at least 2.25% of the fair market value of the car every year for the first three years of ownership of your brand-new car. That's the tariff rate followed by insurance companies for comprehensive insurance coverage. Add a half percent to include Acts of Nature coverage.

You can literally say goodbye to money you pay for insurance. As we all know, insurance is something that you want to have if something untoward happens, but everyone prefers not to be in the situation that would call for filing a claim.

However, should you ever need to file for a claim, you'd have some peace of mind knowing that you wouldn't have to shoulder the entire amount of the repair or replacement of your car. You'd need to pay the deductible amount, though. For most privately owned new-car policies, it's half a percent of the fair market value of the car at the time of the claim or P2,000, whichever is higher. What does that mean? In a nutshell, if the cost of repair is less than P2,000, it's better you take care of the repair yourself. That's the rule of thumb for cars three years old or younger.

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For anything older than three years old, it is different. You need to pay more as you'll be expected to pay part of the cost of the repair according to its depreciated value when new parts are used in the repair.

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* Minor edits have been made by the editors. 

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