Sometimes, seemingly insignificant clauses and caveats found in auto insurance policies can make the difference between good and poor policies. Before signing an auto owner insurance contract, ask your agent these questions. Make sure you have the exact same answers in the policy.
Do you want to be considered a “family policy”?
Family policies provide protection for all drivers at home, and any other drivers they loan their vehicles to. Named-insured policies only cover the drivers named on the policy. Family policies are usually 10% to 15% more expensive (or higher, depending on many factors such as the driving records or other drivers), but they will be the best choice if any other person ever drives the automobile. Many auto owners don’t know they have named-insured policies. They also lend their cars to family members and friends unaware of the possibility of not being covered in an accident.
What rights do I have to choose my own repair facility and the original equipment manufacturer (OEM), parts?
Geico, Nationwide, and Progressive have all rewritten some of their auto insurance contracts to restrict automobile owners’ repair options after an accident. The warranty could be void if you use aftermarket parts, which are parts that are not manufactured by the manufacturer of the vehicle. For example, a car accident may require that your radiator be replaced. A year later, your engine seizes up. Your warranty will likely be voided by the dealer due to the aftermarket radiator.
Is there an appraisal clause on this insurance policy?
In the event that your insurance provider offers you less than what the policyholder considers the vehicle to be worth, this clause gives the right for the policyholder’s permission to ask for an appraisal. Also, ask: Does the appraisal clause allow for the appointment a third party by a court of jurisdiction? This method allows for an alternative to the traditional approach. If the appraisers of the insurance company and the policyholder cannot agree on the umpire they want, one appraiser can ask the court of jurisdiction to appoint an umpire to break the deadlock. Warning: If you get a no to either question, be aware. If your insurance company claims that your car’s value is less than its Kelley Blue Book (National Automobile Dealers Association), Guide value, you may not be able to prove your case.
Do you see the phrase “as determined by us” in the “Limits of Liability” section of the contract?
This section of your car insurance policy establishes limits on how much an insurer will pay. It could state that the insurer will not pay more than the “prevailing per-hour labor rate in the region” or a “competitive estimate of repair cost.”
Some insurance companies have been adding the phrase “as described by us” at the end of certain limitation clauses to their contracts. This allows them to charge repair rates below market. Their policyholders can either take their car to an “approved” repair shop that is willing to repair the vehicle at the low-ball rate or take the car to a more reputable shop and pay the difference up front.
Where to Find The Best Insurer
Some insurance companies do a good job of looking after their customers’ best interests. Others mainly focus on their bottom lines. It is possible to discern which companies are which by using savvy methods.
Check the number of customer complaints. Contact your state’s insurance department to find out which insurers have the lowest customer complaints.
