Three Common Exclusions in Auto Insurance Policies

Auto insurance policies are designed to protect vehicle owners from financial loss due to an accident or claim. Without auto insurance, we would be forced to pay out of pocket and would have a hard time recovering costs if someone else was to blame for an accident. Auto insurance can cover just the basic liability coverage, which includes damage to a third party’s vehicle or property and injuries, or it can cover a multitude of additional and optional coverage. Some of these coverages include collision, which covers damage to your vehicle due to a collision or upset; comprehensive, which covers damage to your vehicle from fire, theft, vandalism, and animal collision; or under/uninsured motorist coverage, which covers expenses if you are involved in an accident with a driver who doesn’t carry adequate insurance.

Auto insurance policies also list exclusions; these are events or coverage that they will not pay for in the event of a claim. Following are three common auto insurance exclusions.

Named Driver Exclusion: In many cases, there is more than one driver living in a household. You are required to list every driver on the policy. Not every driver may have a good driving record and this can cause your premiums to skyrocket. One solution is to exclude a driver from your policy. This will help to lower your insurance premiums, but keep in mind that if this excluded driver happens to drive your vehicle and you file a claim, your insurance company may not pay for certain coverage.

Hail Damage: If you add comprehensive coverage to your insurance policy, you are covered for damages to your vehicle caused by events or acts other than a collision. This includes theft or attempted theft, animal collision, fire, or hail. However, if your vehicle sustained hail damage in the past, your insurance company will add this auto insurance exclusion onto your policy. This means that any existing damage will not be covered. If you do get the damage fixed, you can bring the invoice from the repair shop to your agent and they will remove the exclusion.

Glass Coverage: This specifically applies to the windshield. It is usually more beneficial for you to replace your windshield yourself rather than paying the deductible and possible premium increase. This may also be added if your windshield has existing damage to it. Again, if you have it replaced, you can notify your insurance company and they will remove the exclusion.

Always review your auto insurance policy with your insurance agent so that you are aware of all coverage, limitations, amounts, deductibles, and auto insurance exclusions. This way, you will not run into any surprises should you need to file a claim.

Why Is It That The Government Requires Auto Insurance

The U.S. government has very good reasons for requiring that all drivers in the country carry the right amount of auto insurance. Perhaps one of the most fundamental and compelling reasons that auto insurance policies are required is that cars have the potential to kill or maim people and cause significant property damage. Because a vehicle is a piece of machinery, drivers – no matter how good they are behind the wheel – can’t always control how the vehicle will react in certain situations. Although no one sets out in the morning deliberately planning to have an accident, it happens. And it happens for any number of reasons, such as inattention, inexperience or distraction. We haven’t even gotten to the less forgivable reasons like alcohol or road rage. Auto insurance ensures that regardless of the accident’s cause or who is at fault, the damage will be paid for.

If the government didn’t mandate auto insurance, it would be up to the drivers to their losses from an accident. Damages that occur in accidents can be very extensive, and the associated costs can quickly add up. Victims in auto accidents could suffer serious personal injury. They could also be rendered unable to work. Worst, they could suffer permanent and lasting disability. It is unlikely anyone could afford to pay these costs unexpectedly out of pocket. Insurance is the means by which such pain and suffering and loss of earnings is compensated. After all, a fundamental premise of a developed nation’s legal system is to ensure that victims will be made whole for their losses.

When you obtain an auto insurance quote, one of the coverages you are required to purchase through state law is no-fault insurance. No-fault insurance, or personal injury protection as it is sometimes called, makes the reimbursement of medical expenses automatic rather than based upon fault. By doing this, no-fault coverage frees the dockets of a nation’s courts over lawsuits arising from what, in some cases, are minor medical bills

Then a social issue runs beyond the mere legalities of auto insurance coverage. Imagine the inequities that could arise if people of means could inflict damage to others and then aggressively defend lawsuits arising from their wrongs. Or, in the converse, what if the person of means wasn’t actually damaged, but because of their resources, had the power to bring frivolous lawsuits against another driver to coerce a settlement. In that vein, mandated auto insurance is an equalizer.

For these reasons, it becomes clear that there are very sound reasons for making auto insurance mandatory, from a legal standpoint and from a social justice standpoint.

Things To Look Out For When Getting Auto Insurance Quotes Online

Buying auto insurance online is by far the most efficient method for quickly obtaining auto insurance policies. By browsing the Internet, you can gather better results much faster because many websites give you the capacity to compare quotes and packages instantly from different companies. You can easily get an auto insurance quote with just a few clicks of a button. However, there are some important things you must remember when dealing with online auto insurance. The Internet will always have its share of malicious and fraudulent schemes you need to be aware of.

First thing you need to be aware of is that auto insurance websites should not require you to provide any personal and identifiable information, and more importantly should not require any form of payment. Sending information and payment of fees should only be done when you have already agreed to the terms and have signed the policy agreement. The common data that should be obtained from you usually consists of your car model and your zip code information. In some cases they may even inquire about your driving experience and record. This data is essential, as it will aid the companies in putting together an accurate and appropriate insurance coverage quote for your vehicle. Nevertheless, always be extra careful in giving out information to online companies. Be vigilant of Internet frauds and scammers just waiting to fool you for money and use your common sense.

Also, make it a point to only deal with companies that are well known. It is very easy to be drawn to a company that offers a seemingly perfect package but is just too good to be true. Be wary of this especially when the company is requesting for a payment upfront. All online quotes should be free because it is part of their service and marketing strategy to collect customers that way.

The Internet is a very powerful tool. Utilize it to research various insurance companies and to read through their company reviews, forums and testimonials. Are there more successful stories or complaints? Is the feedback mostly positive or negative? Are there customer service issues? Use the information you gather to determine the legitimacy of the company you are dealing with. Additionally, feel free to call the insurance company to validate all the data they have provided you through their website. Any discrepancies in the data can be an indication of a scam.

It may be time consuming to do the research, but after doing so, you will definitely be rewarded by finding a company that is legitimate, one that you feel secure with and one that will offer the best-suited policy for your vehicle.

Insurance Companies Changing Terms of Auto Insurance Policies to Encourage Customers to Go Green

There is a new trend in the auto insurance industry that involves insurance companies offering their clients better rates as an incentive to reduce their carbon footprints. In the car insurance market, the state of California recently approved an initiative permitting insurers to offer their customers auto insurance policies with adjusted rates, using a system known as pay-as-you-drive. This minimizes the driver’s emissions. Many insurance companies are also offering discounts to those who chose to purchase hybrid vehicles, also minimizing a driver’s effect on the environment when driving.

Why are the insurance companies offering these deals? They seem to be part of a new approach that takes into account the long-term and the big picture. Global warming means more problems for insurers. An increase in catastrophic weather events could be crippling for the companies faced with paying claims for damages property and injured individuals. Severe weather also increases the likelihood of car accidents, along with resulting injuries and property damage. Although incentives to encourage environmentally friendly behavior may be costly for a company in the short-term, if these measures actually do have some impact on consumer behavior and the level of greenhouse gases, it is likely that these auto insurance discounts and reimbursements will be a worthwhile investment in years to come.

It is also possible that auto insurers are offering incentives as a way to appeal to customers concerned with the environment. These auto insurance policyholders might be willing to choose one company over another simply because they perceive them as “greener.” Although it may seem cynical for a company to behave in this manner simply as a marketing ploy, the consequences of these policies still have a potential to benefit every one of us.

It is also possible that the benefits of these auto insurance incentives to insurance companies may have little to do with their environmental component. If consumers actually drive less because this behavior lowers their insurance rates, then auto insurers will certainly benefit from this change. Fewer miles driven means a lower incidence of accidents, which in turn means that the insurance companies have to pay less in costly settlements.

Starting in 2010, a new rule implemented by the National Association of Insurance Commissioners will require insurance companies to detail the risks and consequences of climate change as they affect their business. This information will be available to regulators and investors, helping them to make informed decisions about the future of the industry. It is most likely that the information they report will support the conclusions that they have already reached: climate change will be expensive, and any measures that can lessen its impact will be well worth pursuing.

Auto Insurance Being Dropped by US Drivers at a Fast Rate

According to Insurance News Net, more and more Americans are dropping their auto insurance policies and are ignorant of the consequences.

In a 2009 comSource survey, an overwhelming majority of respondents–72%–did not know if their auto insurance rates would increase if they dropped their coverage and attempted to reinstate. A uniformed 15% replied that they thought their rates would not increase. What this data suggests is that misinformation may be an important component in the recent deluge of Americans who have decided to cut back by dropping their auto insurance.

Certainly, drivers from all walks of life can sympathize with those who have dropped their policies due to economic hardship, which is probably the most predominate and direct cause of dropped auto insurance policies. As the unemployment numbers rise and salaries are cut, most Americans have realized they need to save. For many, dropping their auto insurance policies is an obvious answer. If you're a safe driver, you probably haven't used your auto insurance policy recently. Similarly, you may even think you can skate by the legal requirements for minimal coverage because you tend not to be pulled over. And because–as the survey results state–you think you won't have to face increasing rates, it's tempting to let this one bill go.

For just these reasons, the Insurance Research Council has found that one out of every six U.S. drivers will be operating a vehicle without insurance by 2010. But no matter how tempting it sounds, you don't want to be one of them. Why? First, driving without car insurance is illegal and can not only earn you fines, but also a suspended license. Even less than affordable auto insurance is cheaper than the fines in most states. If you drive without insurance and cause an accident, you might be stuck with a bill for thousands of dollars, in addition to the legal fees you'll most certainly have to pay when you file for bankruptcy.

Second, contrary to popular belief, even companies offering affordable auto insurance will increase your rates if you disengage your policy and then attempt to reinstate. You may be faced with the pressure of having low income now, but dropping your car insurance is not worth the price of having to pay more in the long run.

Affordable car insurance rates are out there, and you can get them if you do a little research. With comparable car insurance quotes that can be obtained for free online, discounts that cater to students, the elderly, homeowners, and other special circumstances, and multiple companies to choose from, you can beat the current depression without dropping your essential car insurance.