March 31, 2010

The Long Term Costs Of A Bad Auto Insurance Policy

A good auto insurance policy can make all of the difference after a collision. A decent provider will be there when you call, able to provide advice on how to proceed, willing to speak to the other driver’s insurance company, and ready to get a rental car set up for you immediately. As well, a great auto insurance company should have agents that can help put your mind at ease, instead of adding greater stress to an already difficult situation. Regardless of fault, your insurance company should be upfront about what is going to happen, and how long the process will take. If you are entitled to compensation, your company should be able to inform you about their progress. If your company must pay the other driver, they should be able to tell you exactly how much your auto insurance premium will increase.

Sadly, for many consumers, having a good auto insurance policy is far from a reality. Fortunately, finding a good auto insurance quote is easier than ever, and can help consumers avoid some of the serious pitfalls of having a bad auto insurance policy. While a bad auto insurance policy will often come with a very reasonable rate, the long-term effects are often not worth the cost. Here are some of the ways that a poor policy can affect you in the long-term.

First, a poor auto insurance policy will likely take far longer to pay out than a reputable one. This may not seem like a large inconvenience until you are actually in a car accident, and you either need to be paid out or the other driver needs to receive compensation. If the insurance company is slow in paying out, or gives you the run-around, it can mean a significant financial hardship for you if you are injured or your car has been written off. It can also mean potential litigation from the other party if your company refuses to pay them, or takes too long. This can be an extremely expensive prospect.

Additionally, having a bad auto insurance policy can eventually affect your chances to get a better quote in the future. If you have had multiple accidents that have all resulted in litigation, or which you listed as fault due to poor effort on the part of your insurance company, other auto insurance providers will be very leery about insuring you, even if none of the insurance problems were actually your fault. A bad auto insurance policy, despite its often initial low price and small monthly premium, is simply a ticking time bomb. While the explosion may not come initially, it’ll come eventually, leaving you with limited funds, potential litigation, and eventually no way out.