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Car insurance is a vast topic, and since there are millions of car insurance policyholders, there are so many things that many people do not know, and insurance companies hesitate to tell you.
But as a responsible driver, it is important for you to know all these hidden things. These things will help you save a lot of money and prevent you from getting into legal and financial trouble. Let’s get started.
1. Avoid Dealership Deals
Sometimes it is unbelievable to know how many people do not know about this. If you are planning to buy car insurance policies, be it liability insurance, collision coverage, or personal injury protection plan, do not buy them from the car dealership.
Car dealerships are infamous for overcharging people as they include commissions and sometimes even upsell other car insurance policies or add-ons such as roadside assistance even if the driver does not require one.
Dealerships are infamously called “stealerships” because of the inflated insurance policy rates. The reason why people buy policies is that they are already spending a lot on the car, and they do not want to go through the hassle of looking for different car insurance policies.
If you have just bought a car and are looking for car insurance policies, then find them by searching the internet. There are many great car insurance providers offering great policies at extremely affordable rates. Have a peek here to find some great car insurance policy options.
2. You Can Get More in a Total Loss Settlement
Let’s say that your car was completely destroyed in an accident, or perhaps some natural disaster like floods or earthquakes. If you have the relevant insurance policies (collision coverage or comprehensive coverage), you can claim the policy and get the actual cash value of the car as reimbursement.
But here is something most people do not know. You can ask the insurance company to increase the actual cash value of the car. The actual cash value is decided by the insurance company. This is the amount of money you think your car is worth.
But you are not bound to accept it. If you have any proof that can show the car’s value is more than what the insurance company claims, the reimbursement amount can be increased. Any modifications, upgrades, etc will be counted. So before you accept what the insurance company offers, try to get more value out of your totaled car.
3. Insurance Claims Can Increase Your Rates
No matter how small the car accident was, or whose fault the accident was. If you are claiming any of your car insurance policies, your insurance rates will increase. Many people are not aware of this but something as small as calling your insurance company about a minor fender bender will inflate your insurance rates.
Car insurance companies are very careful in managing risks. The higher the risk, the higher the rates of car insurance policies. They assess the risk by looking at different factors such as age, gender, driving record, and past insurance claims.
So the moment you make an insurance claim, your prices are hiked. This is not applicable for claiming liability insurance for someone else when the accident was not your fault. If the accident was your fault and you claim your insurance policies, your insurance rates increase.
So here’s what you need to know; do not claim your insurance policies if the accident is minor and you can pay for the repairs from your pocket. This practice is completely worth it as it can save you from paying hundreds of dollars more every year extra for car insurance policies.
4. Family Members Need to be Registered Drivers
You have a car that’s registered to your name, and it is also insured. You have all the relevant car insurance policies such as collision coverage, comprehensive coverage, and liability insurance. But what happens when someone else is driving your car and crashes it?
Can you claim your collision coverage for the accident? Yes, you can, unless the car was being driven by your family member. What insurance companies do not tell drivers is that your family members who drive your car either regularly or occasionally need to be added as registered drivers.
If they are not added, car insurance companies can and will reject your claim and even drop you from the policy if they decide to take strict action. So the first thing that you should do if you have family members who drive your car is to add them to your car insurance policy.
This will increase the car insurance premium rates slightly, but it is still less than the cost you’ll have to bear if someone else crashes your car. While it depends on the auto insurance company, your liability insurance can also be claimed if the accident was caused by someone else driving your car.
5. Business Use is Not Allowed
If you have bought general car insurance policies, you are not allowed to use your car for business purposes. By use, we mean that if your car gets in an accident while it is being used for any business purpose, the insurance company will reject your claim.
Here’s what insurance companies do not tell policyholders; even the smallest things can be considered “business” use. If you are going to drop a client somewhere, or on an errand related to your business, and get in a car accident, the insurance company can reject your claim. So be careful about it.
People who drive for companies like Uber or Lyft should get a rideshare insurance policy to switch between personal and business car insurance policies and avoid rejection of claims.