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What You Don't Know About Auto Insurance
Most people understand that they need auto insurance. In fact,
it's the law, if you drive a car, it has to be insured and the
penalty for driving without insurance is pretty severe. However,
insurance policy wordings are not easy for everyone to
understand. And what you don't know about auto insurance can
hurt you. Here's some clarification of a few things that are
commonly misunderstood about auto insurance.
* Personal property in your vehicle is not covered on an auto
insurance policy. Auto insurance policies provide coverage for
automobiles. For instance, items like compact discs, laptop
computers and cell phones are not covered on an auto insurance
policy. Items like these can be covered on a property insurance
policy. What this means is that if the contents of your car,
like the items listed above, are damaged in an accident or lost
by fire or theft while in your car, you'll need to file a claim
for your contents on your property insurance policy.
* If you loan your car, you've also loaned your insurance. If
your friend is involved in an accident while driving a car
borrowed from you, there's good news and bad news. The good news
is, your insurance company will most likely cover the accident
(except in extenuating circumstances like if the driver isn't
licensed, or was impaired at the time of the accident, then
coverage can be denied or limited). The bad news is, your
insurance company treats the accident as if you were driving
your car. This means that the accident your friend had while
driving your car, is on your insurance record. It's as if you
were driving the car yourself. Best advice, don't loan your car
out.
* When you change insurance companies, you MUST officially
cancel your old policy. With most insurance companies, you can
request the cancellation of your policy at any time by notifying
them in writing stating the date you wish your policy to be
cancelled. So many people misunderstand this and presume that if
they decide not to renew a policy, all they have to do is ignore
the bill. DON'T DO THIS! Unfortunately, the insurance companies
most times will send you another bill and then when the premium
isn't paid, they will register a cancellation due to non-payment
of premiums on your insurance record. Having a non-payment
cancellation on your insurance record is serious stuff and
getting this straightened out after the fact can be a real
hassle. What you'll want to do when you change insurance
companies, is request cancellation of your old policy in
writing. Make sure you watch the dates (the date you're
canceling one policy and starting another policy) so that you
have continuous coverage while making the change between
insurance companies. You don't want to be without auto insurance
for a day or so while you make arrangements for new insurance.
The best advice on any of these things if you're not sure is to
contact your broker and ask for their advice. Doing this will
ensure that you have the coverage you need when you need it the
most and it could save you a head ache or two down the road.
About the author:
Liane Wood is a chartered insurance professional and registered
insurance broker specializing in personal and small business
insurance. Visit her website at: www.insurance-rates.ca.
Liane Wood CIP
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