Whether you drive everyday to work, take your kids to soccer practice, or simply enjoy a night out with friends, driving is an essential part of modern life. However, when it comes to auto insurance, that trusty old nine-hole… well let’s be honest; things have changed since you were a young driver with not much responsibility and even less understanding of the world of insurance. Today, there are so many ins and outs in the world of auto insurance that most people find it difficult to understand what they’re getting before they buy. Here are nine things auto insurance companies don’t want you to know.
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Collision coverage is required by most states.
Collision coverage is the part of your auto insurance policy that helps pay for damage caused to another person’s car when you hit it. If you don’t have collision coverage, and you hit someone’s car, the person whose car you hit has the right to sue you for the cost of their repairs. However, the person whose car you hit has no right to sue you for the cost of damages to your car. Whether your state requires it or not, collision coverage is a must-have type of policy.
You must have uninsured/underinsured motorist protection.
A lot of people forget to add uninsured/underinsured motorist coverage to their auto insurance policy. This coverage protects you if you get into a crash with an uninsured or underinsured driver. This driver doesn’t have to be at fault, they could simply be uninsured or underinsured and still cause a crash that results in injury or damage to your car.
You must have rental car insurance.
This is another thing people often forget about. Aaaand it’s important to remember that all rental cars will require auto insurance coverage. If you don’t, you could be held responsible if you cause an accident while driving around in a rental car.
Cash value coverage is a thing. It’s also known as replacement cost coverage.
Most policies will have cash value coverage as an option. This means that, in the event your car is totaled in an accident, the insurance company will pay you the actual cash value of the car. So, if your car is worth $30,000 but your insurance company pays you $20,000, then you will still get to keep the $20,000. There are a few things to keep in mind though. If you recently bought your car, this coverage will likely not apply to it. Also, if you don’t have a trade or profession that involves getting paid for the use of your car, you probably won’t get much.
More advanced coverage such as theft and vandalism are also a thing.
So, you’ve got collision, comprehensive and liability coverage. That’s all good, but you still want to be sure you’re getting the most out of your insurance policy. One thing that many policies do not offer is more advanced coverage. While theft and vandalism aren’t required by every state, they are by most. Theft and vandalism coverage will reimburse you for the cost of buying a new car if someone is determined enough to steal or physically destroy your car.
Even though your own auto insurance does this, it’s important to have underwriting guidelines in place too.
As you can see, there are so many different things you can add to your auto insurance policy to make sure you have the best possible coverage. However, one thing you may have noticed from the start is that all the other things we mentioned don’t actually offer you any coverage. So, why would you want to cover them? Well, it’s important to remember that having these things added to your policy is just as much of a marketing ploy as it is a way to increase your rates. It’s important to remember that, while it’s great to have more options when it comes to selecting the best policy for you, it’s just as important to know what you’re actually getting. With that in mind, let’s dive back into the nine things auto insurance companies don’t want you to know.
Some companies offer gap or no-fault coverage too.
A gap insurance policy will help you if your car is damaged in an accident and the car’s value is less than your deductible. A no-fault insurance policy will help pay for your medical bills if you are in an accident.
If you want bodily injury protection (BIPP), make sure you know the difference between BIPP and medical payments coverage.
BIPP is short for bodily injury protection. This coverage is designed to help pay for your medical expenses if you are in an accident. BIPP coverage is different from medical payments coverage in that the expenses covered are different than the expenses covered in medical payments coverage. Medical payments coverage is for things like transportation and lodging, whereas medical expenses coverage is for things like surgery and medications.
And finally, if you only have medical payments coverage, make sure you know what that means before purchasing a policy too!
It’s important to know what you’re getting before you buy. If you only have medical payments coverage, you will simply be reimbursed for your medical bills if you are in an accident. You will not be fully covered by the policy if you are in an accident. You must have collision coverage, comprehensive, and liability coverage in order to have a valid policy. Auto insurance companies do not have to provide anyone with insurance if they do not have the minimum requirements.