Why You Need a Good Auto Insurance Cover – True Story

You really don’t know what could happen on the roads. You may be a great driver and not had a claim for over ten years and one of those days you need your insurer to bail you out. This little story highlights the importance of having a good car insurance cover. Knowing that you have the protection is priceless even you will never ever need it.

The Story Begins: We Bought a Second Car

Recently, we bought a second car for our family. Our dealer offered a five day free automobile insurance coverage when we bought it. So, we could bring it home without the need to buy a policy. It was staying on our driveway for couple of weeks after the purchase. Somehow it was not practical to get it insured. We needed a telematics to be installed on the car within fourteen days according to our policy terms but we wouldn’t be at home in that period to provide access and necessary documentation.

It Is Finally Insured

Pay as you drive insurance was the best option since we had young drivers on the policy. One company was offering full coverage for about $1,000 and all the rest of them were at least over $1,500. That was a pretty good deal and made sense to agree for a little monitoring device to be installed on our auto. This could only help us since the car would sit on our driveway most of the time because our teenager would be away at the college most of the year and we would be driving our main car.

We bought the policy as soon as we returned from the holiday and the company sent someone to install the gadget. All was fine and we had all sorts of restrictions for our teen driver to make sure she would drive safely. You can only do so much and hope for the best.

Now Comes the Crash

minor auto damageUnfortunately, it didn’t take long for me to get the call informing me that our teenager got involved in an accident. My first concern was injuries and thankfully it was just a case of two cars coming together at a car park and nothing more. That was a relief. I realized that it wasn’t even worth mentioning when I had the chance to inspect the cars.

Our car had no damage whatsoever, not even a scratch. The other car had a slight knock on the plastic back bumper that was like a little spot on the face (see picture). Luckily (I thought) the other vehicle belonged to our friends! So, you would think that it is nothing between friends and could be solved quickly. If it were my car I would have it fixed quickly for couple of hundred dollars and it would be the end of it when the bill was settled by the at fault party, right?

The Estimate!

I couldn’t be any wrong. The automobile in question is a 5 year old Mercedes Benz with open market value of $12,000. I have gone onto autotrader and checked the price of similar cars. They have kindly taken it to the main Mercedes Benz dealer in the area and asked it to be repaired to perfection. They said that their car was “so good and must be repaired perfectly”.

To be honest, the dealer made a meal of it and provided them with a quote of $2,000 to fix that little touch. When I saw the quote I couldn’t believe to my eyes. They were proposing to strip the back of the car completely and redo everything including the parking sensors and rest of the bumper components that have not been damaged. You would think that Mercedes Benz dealer would see no sense in changing all the parts that are perfectly fine. But, they would be happy to carry out the instructions and rip everything and rebuild the back of the car. Forget about patching the little damage, they wouldn’t have it. However, the plastic bumper can be taken out and replaced with the same, I thought.

The Discussions

I knew that no insurance company would have this crap and our friends would come back to us complaining about how bad our auto insurers. So, we wanted to settle this amicably between ourselves and hope that everyone would be satisfied with the outcome. Unfortunately, we faced a few problems as outlined below

  1. They refused to get another quote from a reputable body shop with Mercedes Approved engineers. Just to say, you need at least two quotes for repairs before any insurance company will take your claim seriously.
  2. They didn’t accept that the repairs suggested on the estimate they have got were over the top for the damage in question.
  3. They kept insisting that their car was “so good” and must have the best remedy for the problem. They didn’t feel that they were being outrages considering we are friends for over 20 years.

In any case, we wanted to set the record straight. We told them that we cannot pay $2,000 period. And from now they have to deal with our insurance provider directly and don’t come back to us if they don’t get what they want. At least they have agreed to that. So, we decided that we would inform our insurer of the liability claim they are going to make and they would fight their corners.

The Call to Our Insurer

I have had a nice chat with my insurer. Here are several points from that conversation.

  1. First of all, they informed me that I must report every incident to them regardless of the damage, settlement with the third parties or paying out of my pocket. I leave it up to you to make a judgement on that. Let’s say it was your car that sustained such damage and there were no third parties involved. Would you report the incident to your insurer after you get it repaired out of your pocket so that they can increase your premium at renewal?
  2. They told me that they will deal with the third party claim and I don’t need to worry about it. They said that they would offer to carry out the repairs with full guarantees or find a similar solution after inspecting the damages. They told me that they would not have any shenanigans and take any attempts to defraud them seriously.
  3. It will not cost me anything since this is a liabilities claim and I am not making claims for own damages. We will see what happens to my premium at renewal.

Insurance Take Outs from This Incident

This would be a sticky situation to deal on our own even though the damages are not devastating. How can you negotiate with people who don’t listen to any reasoning? Here are a few take outs from this incident I can think off;

  1. Make sure to buy at least liabilities automobile insurance even though you are not driving it. The world is full of funny people and you can end up in one of the freakiest situations. Then, it may be complicated and costly to deal without insurance. In this case, it was a 5 year old car but with our luck it could have been a terribly expensive one.
  2. We have more than $1,000,000 liabilities coverage. I think it is always sensible to buy large enough liability cover. The premium isn’t likely to be a lot higher compared to the state minimum auto insurance requirements.
  3. I could actually run the claim with my insurer hypothetically without giving any names, policy numbers or any other identifiable details. This is a good idea in my opinion that helps you in the process of filing your claim. You could call your agent, broker or the insurer directly and talk about it before registering your claim, if you want.
  4. In my opinion, it is only money and you should count your blessings when there are no injuries. If you have sufficient auto insurance coverage you wouldn’t need to worry much about the money either.
  5. My premium may increase next year but a lot will depend on the telematics reporting and size of the claim, I believe. Luckily, I have an annual policy that I don’t need to worry about it for another year.
  6. Auto insurers don’t just cover the costs of damages and injuries. They deal with liabilities claims, repairs and many other things including awkward friends on your behalf as well. They take away the worries and financial burden. It is not a bad deal after all.

And you can find cheap auto insurance if you shop around and find the best deals, just like I did. Look at your options carefully to ensure making the best decision. Consider increasing your deductibles, paying the premium in full or allowing a telematics device installed onto your vehicle. If these solutions will reduce your premium significantly it may be well worth your consideration.

Generally, people wait for an event like premium increase before looking around and asking questions like why did my vehicle insurance go up? Pay as you go auto insurance policies may actually serve you better following an increased car insurance renewal quote. Besides, you wouldn’t feel the need to remain loyal to your insurer after you see a premium increase for no reason.

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