Automobile Insurance Facts You Should Know

Vehicle owners may find themselves unsure about the extent of their coverage in specific situations, or they may hold misconceptions about their level of protection, even after years of buying car insurance policies. It is essential for motorists to communicate with their agents and providers to obtain accurate information about their policies, rather than assuming or believing myths for an extended period. To assist in securing improved protection, selecting the appropriate insurer, and discovering more affordable prices, here are a few lesser-known facts and hidden details about vehicle insurance.

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  1. Auto insurance may offer coverage for pet injuries

These days many people drive with pets and they may have no idea if their pets’ injuries are covered. Some car insurers will pay up to $1,000 for veterinary bills for a family member’s pet, which was in the car during a collision and injured. You should always check for this option if you regularly drive with or have pets because only some automobile insurance companies offer it and it may not be available in some states.

  1. Personal car insurance doesn’t cover business use

If you are using your personal auto for any business activities, you need to discuss this with your insurer or agent. Depending on the activities, you may need business use endorsement, a separate coverage or commercial vehicle insurance.

  1. Belongings left in cars aren’t covered

Did you know that automobile insurance policies don’t include personal belongings in cars? Provided you have Comprehensive coverage, you may be paid for the damaged or stolen auto but the private items within aren’t considered part of the vehicle and not included in its valuation. Normally, home content or renters policies may cover those personal items like cell phones, laptops or other valuable possessions you carry with you.

  1. Car insurance covers taxes and fees, too

When a vehicle is totaled you may need to buy a replacement car and pay taxes and registration fees, which may be covered. Depending on your state and policy terms, the taxes and fees may be paid in advance at the time of claim settlement or they may be reimbursed later. Some states may only require companies to reimburse taxes and fees if a new vehicle is purchased within a certain time after the accident.

  1. Credit score affects insurance rates

It is widely acknowledged that credit scores provide insights into the probability of filing insurance claims, leading most states to permit vehicle insurers to consider credit scores when determining premiums. However, insurers utilize credit history differently compared to banks and lenders, using a credit-based insurance score in conjunction with other factors such as age, gender, driving history, and claims history to assess risk. It’s important to note that each insurance company determines the level of importance they assign to credit scores, which means the impact on rates can vary depending on the company.

  1. Lapse in coverage may increase rates

Letting your coverage lapse can cost you when you want to buy coverage again. Often people think that short lapses doesn’t matter but even short lapses can increase your premium. Car Insurance companies consider drivers without continuous coverage high risk and may charge them higher premiums. Also, you should never drive your vehicle if there is any chance your policy might be lapsed.

  1. Auto insurers cannot cancel policies anytime they like

Policyholders may be worried that their carriers can drop them out of the blue. This isn’t true and vehicle insurance companies can only cancel your policy in mid-term for serious reasons like driver license suspension, fraud or non-payment of the premium. However, they can decide not to renew your policy for far less serious reasons including increased risk profile after accidents and tickets. On the other hand, policyholders can switch to another company any time they like.

  1. You can save on premiums by paying in full

One essential car insurance fact that can help you reduce costs is the potential savings when paying your premium in full instead of opting for installments. Often, companies charge fees for spreading the premium payment over multiple installments, resulting in increased overall costs. Conversely, many insurance providers offer discounts for upfront, full payments. Therefore, it is crucial to examine the total amount you would spend and explore any additional discounts available for paying in full.

  1. If a friend crashes your car your insurance pays

Motorists might mistakenly believe that when they lend their car to someone, the borrower’s insurance will cover any damages that occur. However, this is a misconception. In reality, if you lend your car to a friend and they are involved in an accident, you may have to file a claim on your own insurance policy and be responsible for paying a deductible. Additionally, if your friend is at fault for the accident, your insurance may need to cover third-party injuries and damages, up to the limits of your policy.

  1. You must inform insurers when your details change

Typically vehicle insurance policy includes a duty of disclosure condition, which necessitates policyholders to notify their insurers of any significant changes in details or circumstances. These changes are usually considered material if they would have an impact on the premiums charged and insurability. Car insurance premiums are determined based on various factors, including information about the policyholder, other listed drivers, address, vehicle, traffic convictions, and other pertinent details. Therefore, it is important to inform your insurer whenever there is a change in any of these factors to ensure accurate coverage and premium calculations.

When motorists have questions or concerns regarding a specific risk, it is advisable for them to engage in discussions with their automobile insurers or agents. Inquiring about such matters is always encouraged, as there is no harm in seeking clarification. However, individuals may face undesirable outcomes resulting from misinformation or inadequate coverage if they fail to address their concerns.