April 1, 2010

Why Drivers Should Keep Records Of Their Auto Insurance Payments

If you drive a car, there is at least one monthly payment you are inevitably making. No, it’s not for the car itself – many people are now paying out their cars fully at the time of purchase – it’s for auto insurance. No state permits any driver on the road without some sort of auto insurance coverage, or a bond authorized by the state. What this means for consumers is that over time they are will be paying a significant amount of money into a policy that, if they are fortunate, they are never going to use.

That’s the odd thing about auto insurance. Logging online and getting a cheap auto insurance quote is simple, but even cheap’ quotes these days end up having a significant monetary footprint. For those drivers that are careful, considerate and fortunate, their policy will be something they pay for but never use. A safety net in case of trouble, but one lined with their own money, with a host of limits and exceptions. Over time, even a low auto insurance premium builds up, and the total amount paid out by clients to insurance companies is simply staggering. While insurance is an expensive purchase for only a potential use, not having it at the right time can be disastrous, and a great insurance company can make all of the difference in post-accident litigation. Every driver needs good car insurance, but every driver also needs to keep a record of every payment they’ve made.

Why? Two reasons. The first is that even with new laws limiting when and how an auto insurance company can change rates or drop customers, they are still permitted to cancel policies for non-payment. If the insurance company claims not to have received their money, you need to have records of some kind, electronic or paper, to back up your assertions that you have always paid on time. Second, if it appears that you have stopped paying for your coverage for any period of time and your coverage is suspended or cancelled, the company may try to claim that your vehicle was uninsured. When your policy is ‘reinstated,’ your auto insurance price may have jumped significantly. Keeping detailed records of auto insurance payments can help ensure that mistakes, if they occur, can be easily rectified before they have an impact on your insurance or your premiums.

As with any payments you make to an institution, keeping accurate records is key. While companies are typically diligent about keeping up with who is paying what and for how much, a power failure, company merger or other event could cause a loss of data. It is far better to be prepared than face potential insurance issues.