I found an article on NASDAQ that gives six good tips to keep in mind when looking for an auto insurance policy. In “You might have less car insurance than you think,” Barbara Marquard says that some of the coverage you carry probably has exclusions and limits of which you are unaware. It’s a good idea to keep these six things in mind not only when shopping for auto insurance quotes, but also check with your current auto insurance company, such as American Commerce, and see if any of these limits apply to your policy. That way you can make changes before it is too late and you have to file a claim. A consumer analyst recommends reading through your car insurance policy cover to cover. While you may have more interesting reading materials in mind, this can save you quite a bit of hassle when filing a claim.
Some insurance companies lower your liability coverage to state minimum levels if a driver who isn’t on your policy uses your car. Many people carry 100/300/50 liability coverage, but state minimums are much less than that coverage. If someone uses your car and gets into an accident, you might be covered for far less than the 100/300/50 that you are paying for in your premiums. Underinsured motorist coverage is important when you get into an accident with someone who is at fault and only carries state minimum coverage. But when it comes time for your underinsured motorist coverage to kick in, car insurance companies deduct anything paid by the underinsured motorist’s coverage from what they owe you. For example, if your medical bills are $50,000 and you were paid $25,000 by the other driver’s insurance, your insurance company will deduct that $25,000 from the $25,000 they owe you. Therefore, you wouldn’t get anything for your underinsured motorist coverage!
The majority of states have a law that allows auto insurance companies not to pay your medical bills if you were under the influence of drugs or alcohol at the time of your car accident. If someone without a driver’s license crashes your car while driving it, some insurance policies will not cover any damage in the case of an accident. A lot of policies do not include coverage when you are using your vehicle for any kind of business. This includes pizza delivery, newspaper delivery and all other types of business. If you are using your vehicle for any kind of business driving, make sure to compare auto insurance policies so that you include coverage while you are working. There are also some restrictions related to car theft. If there is no sign of forced entry, maybe because you didn’t lock your doors, many auto insurance companies will not pay out. Also, if you have added things to your car that are not standard, like a new stereo system, some companies don’t cover those additions.
You may be surprised by some of the exclusions and limits related to your car insurance policy. Check with your insurer and shop for new policies with these six tips in mind.