What You Don't Know About Auto Insurance
Most people understand that they need auto insurance. In fact,it's the law, if you drive a car, it has to be insured and thepenalty for driving without insurance is pretty severe. However,insurance policy wordings are not easy for everyone tounderstand. And what you don't know about auto insurance canhurt you. Here's some clarification of a few things that arecommonly misunderstood about auto insurance.* Personal property in your vehicle is not covered on an autoinsurance policy. Auto insurance policies provide coverage forautomobiles. For instance, items like compact discs, laptopcomputers and cell phones are not covered on an auto insurancepolicy. Items like these can be covered on a property insurancepolicy. What this means is that if the contents of your car,like the items listed above, are damaged in an accident or lostby fire or theft while in your car, you'll need to file a claimfor your contents on your property insurance policy.* If you loan your car, you've also loaned your insurance. Ifyour friend is involved in an accident while driving a carborrowed from you, there's good news and bad news. The good newsis, your insurance company will most likely cover the accident(except in extenuating circumstances like if the driver isn'tlicensed, or was impaired at the time of the accident, thencoverage can be denied or limited). The bad news is, yourinsurance company treats the accident as if you were drivingyour car. This means that the accident your friend had whiledriving your car, is on your insurance record. It's as if youwere driving the car yourself. Best advice, don't loan your carout.* When you change insurance companies, you MUST officiallycancel your old policy. With most insurance companies, you canrequest the cancellation of your policy at any time by notifyingthem in writing stating the date you wish your policy to becancelled. So many people misunderstand this and presume that ifthey decide not to renew a policy, all they have to do is ignorethe bill. DON'T DO THIS! Unfortunately, the insurance companiesmost times will send you another bill and then when the premiumisn't paid, they will register a cancellation due to non-paymentof premiums on your insurance record. Having a non-paymentcancellation on your insurance record is serious stuff andgetting this straightened out after the fact can be a realhassle. What you'll want to do when you change insurancecompanies, is request cancellation of your old policy inwriting. Make sure you watch the dates (the date you'recanceling one policy and starting another policy) so that youhave continuous coverage while making the change betweeninsurance companies. You don't want to be without auto insurancefor a day or so while you make arrangements for new insurance.The best advice on any of these things if you're not sure is tocontact your broker and ask for their advice. Doing this willensure that you have the coverage you need when you need it themost and it could save you a head ache or two down the road.
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