Three Things You May Not Know About Your Auto Insurance Policy
Auto insurance is often something you buy, then you put it out of your mind. Once you have insurance, everything is fine; you are covered. However, your policy may not cover everything you think it does. The following are a few things that you may not be aware of:
Insurance doesn't always follow the car
It is true that your insurance policy usually follows the car. This means that it will cover a driver other than those named on your policy. However, the exception is that it will not cover anybody who is living with you. The reason for this is to protect the insurance company. You may have a relative living with you who would increase your premiums if they were added to the policy. You might think you can let them drive your car, and they are still covered because the insurance follows the car. This is not true, so if you want to allow someone living with you to drive your car, you need to add them to your insurance policy.
You may be under-insured for liability
Your auto insurance policy will always include a portion for liability and property damage; this is the part that is mandated by law for every driver. However, these minimums are only to comply with the law and are designed to cover damages when the accident is your fault. If the damages are greater than your policy limits, you could be on the hook for the rest. A lawyer can go after your personal assets to give an accident victim all the compensation they are entitled to. If you have significant assets, you need to speak to an auto insurance agent about the coverage that is best suited to your needs.
Your low-cost policy probably doesn't cover uninsured motorist
Although everyone is required by law to be insured when they drive, there are many people who drive without insurance. There are many reasons for this, but you need to be aware of it because you are not likely covered. You may have bought a low-cost policy because you are a good driver, and perhaps your car doesn't have a high dollar value. However, if you are in an accident that is the other driver's fault and the other driver is uninsured, you will be on the hook for the repairs to your car. If your policy doesn't cover an uninsured driver, you should discuss this with an insurance agent.
The items listed above are only a few things that you may not be aware of. Generally speaking, there many drivers who are under-insured because their policies do not cover what they think they cover. You need to review your current policy and discuss anything that may indicate you may be under-insured with an agent.