It is easy for people to fall into the trap of thinking they know everything about their auto insurance. After all, it is a routine type of insurance that they have had since they started driving and the average consumer is likely to know at least the basics of how it works and may even have made a claim before. However, there are some little-known aspects of many policies which could potentially carry huge benefits for the policy owners in certain sets of circumstances. Being unaware of these benefits could prove very costly. What follows are the top 6 things you probably didn’t know about your auto insurance policy.
You Likely Have Some Protection From Lawsuits
It is no secret that we live in a very litigious society. Some studies have indicated that during any given year the average American has about a 10% chance of being sued and that the lifetime likelihood of being sued is about 33%. These statistics are very alarming to many people who are terrified of the prospect of facing a lawsuit and would be concerned about the cost of affording a lawyer.
The good news is that if you are sued for something that is covered in your auto insurance policy, such as an accident, your insurance company is likely to provide you with a lawyer. Additionally you lose the lawsuit and damages are awarded to the other party, you are likely to be covered up to the liability amount specified in your policy.
Your Pet’s Medical Bills May Be Covered
Pets are a common feature of the average American family, and for the family that cares for one, the pet is likely to be considered a cherished family member. Many people get chills just thinking about how awful it would be if their pet were in the vehicle with them when they are in an auto accident. After all, most pets don’t have the same protection from seatbelts, restraints, and airbags that the human occupants of the car do. That means that even a relatively minor accident could seriously hurt a pet riding the car.
What many people don’t realize is that their auto insurance may cover a pet’s veterinary bills in the event of a cover accident. The laws vary from state to state and policy to policy, but it is definitely worth checking out if you find yourself in this unpleasant predicament. Call your insurance agent for more details.
Your Comprehensive Coverage May Include Damage From Terrorism
Fear of terrorism is unfortunately a daily reality for many Americans, especially those living in major cities or near airports, harbors, or other strategic locations. The first fear is always for personal safety. However, many people also worry about what would happen if their home or car got destroyed in a terrorist attack.
The good news is that a comprehensive auto policy truly is comprehensive and in most cases will even cover your car in an event like this. However, if you have only basic, liability coverage, then you will not be covered for terrorists attacks. It is important to understand the terms of your policy and you should review them with your insurance agent if you have questions or want to look into adding this coverage.
Your Credit Score Could Affect Your Rates
People understand the importance of a good credit score when it comes to things like securing a home mortgage, getting attractive credit card rates, or taking out a personal loan. Many people also realize that if they apply for a new job there’s a chance their potential employer will pull their credit report. However, what a lot of people do not realize is that their credit scores could also affect the rates they pay on their insurance.
The reason a good credit score could lower your rates, or why a bad one cause your rates to spike, is because there is a correlation between good FICO scores and lower risk for the insurance company. That means that many insurers rewarded financially responsible people with lower rates. However, some states prohibit insurers from taking credit scores into consideration, so you need to understand the laws and regulations in your state. Regardless of what you will pay in auto insurance premiums, however, maintaining a good credit history and checking your credit report annually to catch errors, will reap many rewards.
Your Car Is Still Covered If You Lend It To Someone
If you’re like millions of Americans who occasionally lend their cars to friends, coworkers, or other people in their lives, there’s a good chance you’ve had at least the passing thought of, “What would happen if they get in an accident while driving my car? Would I have to pay out of pocket?” That concern is enough to make people worry about lending their cars to even someone who is a good, responsible driver.
Fortunately, your car is covered even if you are not the one driving it. That means that if your reckless roommate rearends someone the cost of repairs won’t come directly out of your pocket. However, too many claims on your policy could result in higher premiums and if you only have basic coverage you will probably be left with any remaining expenses. That means that it’s a good idea to take your overall insurance situation into consideration before you pass off those keys.
You May Be Protected From Deadbeat Drivers
Hit-and-run drivers are almost universally scorned. There is simply no excuse for shirking your responsibility and driving away if you have been in an accident. Almost as bad is the driver who gets behind the wheel without insurance or without adequate insurance, thereby putting themselves and everyone else at risk.
Most insurance policies do offer some type of protection from deadbeat drivers, however. That would be covered by uninsured and underinsured motorist provisions in your policy. Typically your coverage will be the same as your standard liability coverage. However, if you are concerned that this will not be enough you can usually add higher coverage for a small increase in your premiums.
The best auto insurance of course, is the kind you never need to use because you aren’t the victim of accidents and misfortunes. If something does happen though, fully understanding your coverage and protection will help you save money and enable you to make smart, informed decisions. Remember that your insurance agent is there to help guide you through these unfamiliar waters.