To help customers protect their beloved ride, auto insurance company offers several type of protection. You need to know it first before you move your step to agreement signing. Car insurance usually covers two types of loss, one is called All Risk insurance and another is called Total Loss Only insurance. Now let us split them into each definition. All Risk insurance is an insurance which covers all type of risk like stolen, Third party Liability, stolen rearview mirror, riot, and get hit or lost tires. The coverage depends on each car insurance company for example 5 million for insurance company A and 25 million for insurance company B.
On the other hand, there is insurance which covers Total Loss Only (TLO). This type of insurance covers the total loss, meaning stolen or minimum 75% damage. Basically, the owner can not use the car anymore. This type of insurance usually allows you to pay the premium rate 1% of the car price. And the premium rate paid for Total Loss Only insurance is definitely lower than All Risk insurance as it covers one type of loss. Therefore you need to be wise and careful in choosing the type of car insurance.