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Four Facts You Need To Know About Your Car Insurance Policy

December 1, 2010

Automobile insurance shopping can be a frustrating and confusing task at times. How do you know which coverage is the best for you? What should it cost? Are you paying too much? The following four facts can help you make an informed decision when searching for an automobile insurance policy.

In the Event of an Accident, How Much Compensation Should You Expect?

If you happen to be involved in a major automobile accident and suffer significant damages to your car, you may be surprised by the method your insurance company uses to determine the value of your vehicle, and ultimately how much compensation you will receive. There are many different guides that consumers can use to estimate their vehicle’s worth, but insurance companies don’t always use these references. Instead, they will often compare prices from several similar makes and models on the market at the time that the claim is being processed. Your insurance adjuster will look beyond the make, model and year of the vehicle, and consider factors such as the physical condition, mileage, accident history, and any major repairs that have been done. The value that they assign the vehicle may be a lot less than the figure you have in mind. Your insurance company will likely give you the actual cash value of a vehicle, rather than its full replacement value

Personal Property is Not Covered by Your Auto Insurance Policy

Automobile thefts and burglary rates have risen dramatically in recent years. Most likely as a result of how frequently an array personal electronics are left in our vehicles. GPS units, iPods and MP3 players are often left in cars for extended periods of time. But, if your vehicle is stolen or broken into and your property is damaged or taken from inside, your auto insurance policy won’t cover your loss. Property that is left within your vehicle falls under your homeowner’s insurance, or, if you don’t have homeowner’s insurance, you should consider automobile property insurance. Either way, to receive reimbursement for the damage to your vehicle, and for the loss of your property that was taken, you’ll have to file two claims and pay two deductibles – unless you keep all of your insurance with the same company.

Lending Your Vehicle Can Impact Your Premiums

When you lend your vehicle to a friend, neighbor, or co-worker, you are also lending your insurance coverage. So, you need to keep in mind that if they happen to be involved in a motor vehicle accident while driving your car, your insurance company will be responsible for any claims that are filed. This means that your insurance premiums will be impacted by the accident that occurs and the claims that are filed – even though you weren’t operating the vehicle. No matter who drives your vehicle, as the registered owner, you are responsible for any injuries or property damage sustained during the operation of the vehicle.

Monthly Payments Cost More

Car insurance rates are different for every individual driver, depending on driving record and years experience, age, type of vehicle, and a number of other factors. Some insurance companies require that premiums for the year are paid in advance, while others may allow qualified drivers to pay in monthly installments. However, as with monthly financing plans, the payments will include the fee that your automobile insurance company charges for this convenience, which can be anywhere from 2 – 7%, depending on the company.