There aren’t many people who would say that buying auto insurance is a fun thing to do. However, it is an important task to carry out if you want to be insured properly. Imagine how disappointed you would be if you were told that your policy doesn’t cover your damages or not enough to pay claims against you. There is not much you could do about it at that time. Here are a few points to consider in order to make sure you purchase sufficient cover.
Basic Liabilities Coverage
Liabilities vehicle insurance covers the claims against you as a result of an accident you caused. You don’t receive direct compensation from insurers but you don’t have to face the claimants on your own. Your insurer deals with them and pays if they have a legitimate claim. You may think that you just want to buy the minimum coverage required to be able to drive a car legally since this part of the cover is only going to pay third parties.
This could be a colossal mistake that may lead to your bankruptcy. When you insure your automobile you know the maximum amount you may lose which is the market value of your car. However, you have no idea what would the value of other cars you may be involved in an accident with. You may actually cause an accident on the highway that may end up as a pile-up with multiple cars damaged and many people injured.
What do you think will happen in such situation when you don’t have sufficient coverage? Your insurer will pay up to the limit of your coverage. Do you think the third parties will just walk away after that? Of course not as their insurer will initially pay their damages and come after you. It is no joke because they will require you to sell everything you own and pay their losses.
We may have exaggerated the scenario a bit above but many motorists don’t buy sufficient liabilities coverage. If you have less than a million dollar liabilities coverage you should consider increasing it. The additional premium you are required to pay is likely to be negligible amount. But you will have total peace of mind.
No Coverage for Your Car
You are not legally required to insure your vehicle. If you have distrust towards insurance industry you may just want to pay as little as possible to insurers. That is why plenty motorists concentrate on the minimum coverage they have to buy and ignore the rest. This would mean cheaper premiums but your auto will not be insured for possible damages and thefts.
Actually, many people don’t even realize that they only bought the basic liabilities coverage. They didn’t ask what is covered or enquire about different types of covers. When you make it clear that you only want to buy policies just in case you may be stopped by police the agents and brokers will sell you liabilities only policies. Then, who is going to pay for your own damages?
Reasons for Inadequate Policies
There are a few reasons why people fail to buy sufficient auto insurance. You may not have realized but below attitudes, misconceptions and circumstances may prevent you from arranging a decent policy.
- Wrong Attitudes towards Insurance: Most people know how important insurance products are to safeguard their possessions. But a few people may think that nothing will happen to their cars and the premium will be wasted. Furthermore, they may believe that insurance companies are cheats and liars. However, the most important question to ask yourself isn’t how you feel about the whole system but can you afford to pay for damages and losses on your own should something happen.
- Money: Nobody likes to pay a dollar more than they should. However, auto insurance is something you have to buy anyway. So, why not pay a little more and make sure you purchase sufficient protection? Trying to save few dollars may cost you more than you can imagine.
- Knowledge: Not knowing is not something you should be ashamed of but not learning is. Failing to insure your automobile properly because you didn’t find out about your policy is a sad position to be in. We live in a world of information overload. There are many ways you can find out about how to insure vehicles properly. You can also ask your broker.
- Ignorance: There are some things you really shouldn’t ignore for your own sake. Take a few minutes to figure out the level of protection you need, shop around to find the best quotes and set everything up nicely. You will be very glad you bought the right policy if you ever need to make a claim.
- Being Too Smart for Your Own Good: A few people may think that they are smart and insurance companies will never find out. They may bend the truth and try to mislead the insurers so that they can get lower premiums. However, all those premiums you have been paying may be wasted if the insurer finds out you have been lying to them and refuse to pay your claim. One of the common mistakes made is to give a suburban address when you are actually living in the centre of the city.