All-risk insurance shelters and covers all risks which can cause damage to your home, things, and any other personal property. This is also called an “Open perils contract” which indicates that all your belongings including your property are insured. So when you get all-risk insurance for your automobile it becomes all-risk auto insurance.
An all-risk auto insurance policy is best suited for you because it covers almost every aspect of risks and liabilities your automobile can encounter. This is very different from simple insurance in which risk or perils are labeled and exceptions are not considered in insurance. A named or defined perils insurance policy only covers the listed liabilities on the policy. Whereas all-risk auto insurance covers every risk related to your vehicle.
For example, in a closed or named perils insurance policy if your vehicle is insured for only road accident damage, it only will cover this risk. While all-risk auto insurance covers every possible damage that can happen except the one specifically excluded while making policy. It will cover risks like road accidents, fire damages, breakage, theft, injuries, and all other risks which an automobile can face.
When all-risk auto insurance makes a difference?
Consider you are driving your vehicle and it encounters a roadside accident due to any possible reason. Your vehicle gets damaged badly and you also suffer some injuries. All-risk auto insurance will not only cover the damage that happened to the vehicle but also will pay for your treatment. On the other hand, a named-risks policy that only covers roadside accidents will not pay for your treatment. That is the fundamental aspect where all-risk auto insurance makes a difference.
All-risk auto insurance policies will cost you more than simple or named-risk policies. Prices for these insurances differ depending upon the value of the vehicle which is going to be all-risk auto ensured and in which city you are living. You will be paid for all the damage except the company can find any evidence that the damage is due to the reason which was excluded from the policy.
Key points to remember for All risk Auto insurance
· An all-risk auto insurance policy will cover all the damages except the one omitted while designing the policy.
· The type of policy will define how much a claim will be paid to you if any damages happen.
· You will have to pay extra to include any specific type of risk or peril in the policy which was being excluded before.
All risk auto insurance for commercial vehicle
If your business or organization uses a commercial vehicle, you must get all-risk auto insurance for this vehicle. An all-risk insurance policy will not only pay for the damage to the vehicle but also will pay for any risk that happens to people traveling in it. Whereas, simple auto insurance only will ensure your health or damage to the vehicle depending upon for whom the policy was made.
All-risk auto insurance Vs Total loss
Before getting any type of auto insurance, you need to learn the difference between a total loss and all-risk auto insurance.
Total loss policy means that everything is demolished and destroyed due to an unavoidable event like fire or flood. If your vehicle gets damaged in such a way that there is no way of repairing it except getting a new one, this is known as a total loss.
While all-risk auto insurance works as explained earlier. It is better to get an all-risk insurance policy because chances of getting total loss are very less than getting other damages and risks which can be covered by an all-risk insurance policy.
Who is insured by your all-risk insurance?
The all-risk auto insurance policy covers you and all members of your family. Everyone is ensured whether they are driving the vehicle or sitting beside the driver. All-risk auto insurance not only ensures you and your family members in your vehicle but also ensures them while driving the vehicle of any other person (if they permit it).
This policy also provides insurance to a person who is not listed in the policy but he or she is driving your vehicle with your permission. Your all-risk auto insurance will only cover your driving if you are doing it for your personal needs like going to the office or on a tour with family.
This will not cover any commercial usage of vehicles like you deliver food on it. The use of the vehicle for taxi services will also not be covered in this insurance. Some companies are trying to design an insurance policy for vehicles that can be used as taxis or for services like Uber.
All-risk auto insurance includes
As all types of risk and damages are covered within this type of auto insurance, some of the common are listed below;
· Third-party liability
· Fire and blast
· Theft or stolen
· Any kind of your damage
· Sometimes it also covers total loss
· Injuries happened to people traveling in the vehicle
· Damage caused by hail, storms, or other environmental calamities.
· Insurance for the driver
· Any type of legal costs.
Not commonly included in An All-risk Auto insurance
Though all-risk auto insurance covers every risk and damage to be covered. But most of the times damages and risks listed below are often excluded from all-risk auto insurance;
· Nuclear accidents
· Acts of terrorism
· Motorized breakage
· Unseen or dormant defects