“Do you know what your car insurance covers?” isn’t the same question as “Have you read and understood your insurance policy?” People assuming they know the policy often make assumptions about items outside the declarations page. A failure to thoroughly understand an auto insurance policy might lead to a disastrous situation when the time comes to make a claim. Compelling reasons exist why you should read the policy from beginning to end.
Adequate Coverage
What happens if you are sued for $175,000 in damages but only maintain $100,000 in liability coverage? The insurance company will only pay up to the $100,000 mark. The rest is on you. And if you don’t carry comprehensive coverage and owe money on an auto loan, you’re stuck for the balance if someone steals the car. An insurance provider probably would sell you the coverage if you asked. Believing you possess adequate coverage isn’t enough. The coverage must appear written in the policy. Look over your assets. See if the policy covers those assets in full. Also, be sure you aren’t missing any vital categories of coverage. Often, people willfully accept inadequate coverage because it is cheaper. Paying less and receiving less leads to taking a significant financial risk. The risks won’t pay off if you suffer financial damage.
Knowing What to Expect in Event of Emergencies
It’s important to know what kind of coverage you have, from bodily injury coverage to roadside assistance. Insurance policies spell such things out for the insured and uninsured. The policies may even explain how legal statutes relate to coverage. States may have laws that prevent accident victims from double-dipping when it comes to receiving compensation for damage and injury from insurance and the legal system. The policy would likely define what reasonable outcomes to expect when seeking compensation for damages.
Know All the Exclusions
Insurance policies don’t cover everything. Standard auto insurance policies often exclude the commercial use of a vehicle. Do you want to make money with ridesharing or food delivery? Read and reread your policy to make sure you are covered. If not, inquire about a rider or a commercial policy. Driving around with inadequate coverage means you aren’t covered at all.
Do you want to be on the proverbial hook for a six-figure lawsuit? Always review the exclusions, and don’t automatically assume you are covered. Take the necessary steps to learn what your auto insurance policy provides. Doing so could save you from troubles down the road.
To make sure you’re completely covered if you get into a car accident, get a free quote for comprehensive and collision insurance today!
LEGAL DISCLAIMER
Views expressed here do not constitute legal advice. The information contained herein is for general guidance of matter only and not for the purpose of providing legal advice. Discussion of insurance policy language is descriptive only. Every policy has different policy language. Coverage afforded under any insurance policy issued is subject to individual policy terms and conditions. Please refer to your policy for the actual language.
