The following is a guest post from Confused.com.
Securing the right type of insurance is always a tricky problem. Getting the cheapest deal for you and your family from a financial point of view is another problem entirely.
Most people don’t even look at their policies before they sign, instead, they simply look at the price and the broad level of coverage. Unfortunately, this can lead to a number of misconceptions about exactly what you’re insured for. I mean have you actually ever looked at what your car insurance covers?
Renewal could cost you more
Automatic renewals are fairly common nowadays, but just because you stick with your existing provider doesn’t mean that you’re necessarily getting the best deal. Renewing your policy with the same insurer could end costing you more, as most companies do not provide a discounted loyalty rate for staying with your current policy. Your best bet is to shop around, and if you find a better deal, approach your current insurer and see if they are prepared to match it.
You’re not covered to drive any car
Some policy holders wrongly believe that they are covered to drive any car: This simply is not true. Most of these co-called ‘drive any car policies’ have strict restrictions, such as only being able to drive cars with certain engine sizes, or having to provide your insurers with the details of the car you intend to drive. Your policy may include special dispensations on driving any car depending upon certain emergencies, but in most types of these cases you will still need to alert your insurer or double check your policy.
Different shakes for different states
In the US car insurance is strictly a state-level concern – meaning that different states often have varying restrictions when it comes to pay-outs or coverage. State minimum liability pay-outs can vary significantly; the difference between a pay-out for property damage in Mississippi is only $5,000 compared to $25,000 in Maine. Fortunately, most policies have an ‘out of state’ coverage policy, but it’s always worth checking your policy before you leave.
Most states require you to hold a policy with the state that car is registered in. This means that if you travel a lot, you’re a student, or you have two homes, then the only real option is to register and insure your car in the same state.
You may not be covered for stolen items
Although you may think that you’re covered by third party, fire and theft, you may actually find that you’re not completely covered if your car gets broken into and some of your personal effects go missing. Some policies insist that certain items must be left locked in glove compartments, the trunk or out of sight in order to make a claim. Some policies also insist that the car must be locked and some form of alarm must be installed and operational if you’re to make a claim on any missing or stolen items.
Remember all policies vary, and if you’re ever in doubt about a certain element of your policy then make sure you contact you insurer.
This article was written by John T on behalf of the car insurance comparison site Confused.com