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Unfortunately, Not All Auto Insurance Policies are Created Equal

You probably have seen the commercials about saving hundreds of dollars on auto insurance or the option to “Name Your Own Price”. And the ones that ask you to “Save Big” by getting online insurance. The idea behind these ads is to make you believe that every car insurance plan is the same and they all give you the same coverage. But unfortunately, that is not the case.

Like many other things, buying a cheaper auto insurance could prove very expensive when you file a car insurance claim. The problem is, many policies have grey areas or gaps where they lack coverage. It happens when customers fail to take the time and read their policies thoroughly. The reality struck them when they go to file the claim.

This often cost claimants thousands of dollars, which is way more than the premium savings on the cut-rate insurance plans. Typically, Insurance companies create these plans to target different types of customers, so they can dupe them into a game that is played by their rules. Here are the examples of these gaps and grey areas in auto insurance policies that can help you outsmart pesky insurance agents.

  • Many cut-rate policies do not cover adult children or undisclosed household residents using your vehicle unless they are added to the policy.
  • Some policies do not provide coverage for business use of an auto. It means if you are using your personal vehicle for business or work, your claim is likely to be rejected.
  • By the same token, any type of delivery is excluded. So if junior delivers pizzas after colleges to make some extra cash, the auto policy may not cover it.
  • Many consumers buy higher liability limits to protect themselves from litigations which occur as a result of a car accident. Yet, they aren’t protected in the same way when they let their friend borrow their car. Mind you, in case of permissive users you only get minimum limits.
  • In case of theft, you will be covered only if there is an evidence of forced entry. However, if you left your keys in the car and it was stolen, the insurance may not cover your loss.
  • There are some policies that do not even cover sales tax under loss settlement. Meaning, if your car is stolen, you have to come up with additional cash to replace your vehicle.
  • If you get a major speeding ticket or a DUI owing to an accident, some policies may not provide you any coverage for this.
  • If you get critically injured in a car accident, the policy may not cover the vehicle that transports you to the hospital.
  • Most standard policies do not offer coverage for street racing inside facilities designed for racing.
  • Non-owned autos are also excluded from most insurance policies.

In brief, avoid throwing away your cash if you didn’t spend a few extra minutes finding yourself the best insurance plans.

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