Are you covered under car insurance? You may think ‘Yes’, but actually you are ‘NOT’!
Car insurance is one of the most important aspects which we set and forget. You complete the paperwork, automate the monthly payments, file the documents and assume that you are covered in case if insurance required. But such assumptions may be wrong. Car insurance policies change with time, and after accident many people find that their plan will not cover them as they assumed.
Right from liability caps to fine print exclusions, even a ‘full coverage’ plan may leave you uncovered in real-time situations. Let’s understand why basic coverage is not enough, common policy gaps, and how your car insurance can actually protect you.
Why basic coverage might not be enough
Each country and state have its own protocols for auto insurance, usually emphasizing on third-party liability coverage- implies your auto insurance policy will cover the expenses of other people injuries or damages in case of your fault.
For instance, your basic coverage may cover around $25,000 in property damage. But what if your entire SUV or multiple vehicles are involved? Suddenly, you will find that you are the one liable for all the expenses above that.
Many basic plans don’t cover you if your vehicle is at fault. That means you need to pay for the entire repair or replacement unless you have taken a comprehensive coverage.
Common Gaps in Auto Insurance Policies
Insurance jargons may confuse you, and this may create gap which drivers may not understand until it’s too late.
- Personal Injury Protection (PIP): This will cover medical expenses of yours and passengers irrespective of who is at fault. Some policies may not cover this or offer it with low limits.
- Uninsured/Underinsured motorist coverage: Many drivers don’t follow rules if your car is hit by someone with no insurance, then this coverage can be the difference between getting compensated or footing the bill yourself.
- Roadside Assistance and Towing: If you are locked outside your car, or got stuck on the highway side, your insurance provider won’t help you unless you have taken roadside assistance in your package.
- Rental Care Reimbursement: If your damaged car is at the mechanic shop after accident, you will remain without any car for days or even weeks. If you haven’t taken any rental reimbursement plan, you will pay the expenses from your pocket.
- Glass, Theft, or Vandalism: Stolen electronics, windshield replacement or vandalism are only covered under comprehensive plans- and this may not be covered under standard liability packages.
Full Coverage? Not Always What It Sounds Like
The most misleading term in insurance policy is ‘Full coverage insurance’. It may sound like complete protection, but it’s not. Consider it as a bunch of common coverages- not a promise of complete protection.
Things included in full coverage:
- Liability i.e. property damage and body injury
- Collision i.e. damages to your vehicle in an accident.
What is left?
- Roadside assistance
- Rental car coverage
- Custom equipment or aftermarket upgrades
- Gap insurance
Misleading Marketing Terms Explained
Your insurance provider may claim ‘full coverage’ without talking about deductions or low policy limits. Hence, you must dig deeper to know the details and understand the condition for which you are covered.
How to Review Your Current Policy
It is important to understand your current policy completely to know the aspects for which you are covered.
Check the below car insurance terms:
- Limits: The maximum amount your insurer will pay
- Deductibles: What you should pay from your pocket before coverage uncovers you.
- Exclusions: Situations don’t come under coverage.
Ask the Right Questions
- What happens if I give my car to someone and it met with an accident?
- Will the insurance company covers disaster or theft?
- Do I need any special coverage for specific vehicle or lifestyle?
If you have tried to compare any international plans- like car insurances in Spain– you will find the packages of various providers and their coverage limit. The same scenario is with the local policy: details matter. Some Spanish insurance company may include roadside assistance as standard, while others may leave it as optional. The conclusion? Don’t guess-verify.
When Should You Switch Insurance Providers?
With time your insurance needs will change. The policy that worked last year, may not be the best match today.
Signs It’s Time to Reevaluate
- It’s your new car and your old plan doesn’t provide proper protection.
- You moved, got married and had children- all of which can impact coverage and premiums.
- Your premium doesn’t provide any additional advantages
- Other insurance companies are providing better coverage.
FAQs: What Drivers Usually Overlook
Q: What is the difference between collision and comprehensive coverage?
A: Collision covers damage irrespective of fault. Comprehensive includes only non-collision events like vandalism, theft or natural disaster.
Q: Are aftermarket parts covered in case of a claim?
A: No. You need to buy additional coverage for this.
Q: Is my policy valid if someone else drives my car?
A: Yes, if the driver has your permission- but coverage amount may vary.
Q: Can I negotiate my insurance rate?
A: Not directly, you may request for some discounts or adjustments in deductible to lower premiums.
Final Takeaway
Don’t wait for an accident to happen to know that you are an underinsured driver. Take time to know about your policy and what it covers. Your car insurance coverage must give you peace of mind not surprises.
