You might be surprised to learn what your policy covers, and doesn’t cover.
By Chad Fisher, Contributor
Many car insurance policies offer coverage that you may not know about. There are also things that are not covered by standard insurance policies. It is important that you understand what your rights are before you are involved in an accident and need to file a claim. The following five facts are not widely known by most individuals who purchase auto insurance.
1. Your Car is Covered, but Your Belongings Are Not
Did you know that all the personal possessions you carry in your vehicle are not covered under your car insurance policy? That’s right, even the most comprehensive car insurance policy will not reimburse you for items that are stolen or damaged while in your car. You will be compensated for any damage that is done to your vehicle, but your possessions are not considered part of the vehicle’s value. The best idea is to refrain from carrying extremely valuable items with you when you are driving.
However, if you are like most people in today’s age, your cell phone, laptop, and GPS unit are considered essentials. The trauma of losing these items is bad enough. In today’s economy, chances are the average person does not have the money on hand to run out and purchase new ones. Therefore, it is important to make sure you have your items insured. In order to insure the items you carry with you, it is necessary to purchase a rider on your home insurance policy. Always keep receipts and make sure you have photos or video of your items to prove their condition before they were damaged or stolen.
2. You May be Eligible for a Diminished Value Claim
When you purchase a vehicle today, it has become standard to receive a car history report. That’s great for the buyer, but not so great for the seller if your vehicle was in an accident and you never received compensation for the diminished value of your vehicle. When you go to trade your vehicle in you will not receive as much for it. Even if your car was repaired by a good quality auto body shop, the resale value will be reduced simply because it was in a collision. Most buyers will not purchase a vehicle that has been in an accident unless they receive a discounted price. Your insurance company must reimburse you for your damages. They will not automatically send you a check for your diminished value. You must file this claim in addition to your regular claim and prove your vehicle has received a loss in value due to the accident.
This is a lot easier to do on a newer car but not impossible to do on an older car. Diminished value claims are generally offered to the person who received damage from the insurance company of the person who is found at fault in the accident. Insurance companies rarely offer diminished value payments when they are reimbursing the primary driver insured on the policy.
3. Coverage for Your Pet’s Injuries
Everyone understands that their car insurance covers medical bills for the driver and passengers involved in a car accident. If you are driving with a pet in the car, you should check with your insurance company about whether or not your pet’s injuries are covered, too. Some insurance companies will pay up to $1,000 for veterinarian bills for you injured pet or the pet of a family member that lives with you. The coverage is not available in all states or through all insurance companies so make sure to perform a thorough auto insurance comparison up front if you have family pets. If you travel with your pets often, it is a good idea to find out if your policy will provide reimbursement for an animal’s injuries.
4. Save Money by Paying a Lump Sum
Most insurance companies offer discounts to customers who are willing to pay for their policies in one or two lump sums over a year. Spreading your payments out month to month may seem less expensive than spending hundreds of dollars once a year, but the policy price is generally higher when it is spread out over twelve months. Even paying for your policy every six months is less expensive than paying for it every single month. Talk to your agent about the fees that are attached with a monthly payment so that you will be aware of the savings involved in paying annually or semi-annually.
5. Taxes and Fees Covered by Your Car Insurance
The tax and registration fees on your vehicle may be covered by your insurance company if your vehicle is declared a total loss. In some states, the car insurance company must pay for the taxes and fees up front and in other states, the insurance company provides reimbursement after the settlement. Some states only require the insurance company to reimburse you for the tax and registration if a new vehicle is purchased within a specific amount of time after an accident. If you are being reimbursed by the other party’s insurance company, they might not be required to pay you for the cost of tax and registration.
The bottom line is that you should read your car insurance policy thoroughly so that you are aware of the things that are covered and the things that are not. Many minor details can make a huge difference when you need to file a claim after a collision. For example, if you loan your car to a friend and he or she is involved in an accident, your car insurance will pay for the damages regardless of your friend’s insurance situation. Little things like that can increase your insurance costs, which means you should be aware of them when you purchase a new policy.
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Auto and Motorcycle Accidents
Automobile and motorcycle accidents are the leading cause of personal injury and death in the U.S., with almost three million injuries and over 40,000 deaths each year. If you or a loved one has been involved in a motor vehicle accident because of the negligence of others, you may be entitled to payments for personal injury or wrongful death. We may be able to help you to recover payments for medical and funeral expenses, lost wages, physical pain and emotional suffering, disability, and future losses.