Insurance Surprises – Make Sure Your Provider Gives You a Fair Deal

A number of insurers guarantee cheap auto insurance rates even though you have bad credit or have several tickets for speeding. You may wonder how they can do this. Answers can be found in the fine print of the insurance policies. This seemingly good deal could be hiding a series of limits and exclusions which reduce the likelihood of being able to file a claim.

It is impossible to tell exclusively by the fee they charge. Shopping for affordable car insurance isn’t similar to shopping for low-priced gasoline. One of the quotes of the insurance company can leave out coverage that another may contain at an identical price. Comparing prices is alright, but when seeing the prices, you also must learn what is covered and what is not, to ensure you are comparing apples to apples.

Hidden Gotchas

Standard or preferred auto insurance policies are for drivers with good credit ratings and moderately clean driving records. The nonstandard type of policy is intended for risky drivers who do not meet the criteria for preferred or standard rates. Minor companies specializing in catering to risky drivers or the owners of classic cars previously dominated the nonstandard market, but major characters are starting to offer nonstandard policies too.

However, no insurance company can take on extra risk without offsetting it. This is done either by higher rates, or reducing coverage, or both. There are seven surprises that can be hiding in cheap auto insurance nonstandard policies:

• Reduced Coverage – Normally a standard policy covers the driver, listed family members, or friends who borrow the vehicle. If a risky teenage driver is residing with you, a nonstandard policy can require you to eliminate them from coverage. A few nonstandard policies also prohibit coverage for people that have your permission to use your car occasionally. They can prohibit coverage for drivers age 25 or under.
• Additional Checks of Driving Records – the frequency with which your driving record gets checked increases from every 12 to every 6 months
• No Unique Benefits – Do not depend on receiving extra goodies advertised on television by major insurers for their valued customers. Normally a nonstandard policy arrives without the perks of the standard policy there are no vanishing deductibles or accident forgiveness.
• No Punitive Damages Coverage – When sued for causing an accident, many nonstandard policies leave out coverage for disciplinary or exemplary damages. This means you are on the hook and have to pay those damages when a court rules in favor of the other driver.
• Reduction of Repair Coverage – With comprehensive or collision coverage, a standard policy pays for the full price of repairs unless the car is totaled, then the policy pays the depreciated worth, which is market value before damage. Some nonstandard policies account for depreciation for repairs, based on the auto’s depreciation.
• Less Mileage Allowed – Many policies made for specialty autos have low mileage caps. Ensure the policy includes mileage enough to cover it.
• No “Pizza Delivery” Coverage – Several nonstandard policies eliminate physical and liability damage coverage when the vehicle is used for business purposes. Ask the agent or the agents where cheap auto insurance quotes are compared online, if you are in the nonstandard category. Make it clear how the vehicle will be used and who will be driving the car. Always read the entire policy to find out what is covered and what is not.