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Auto Insurance Warnings

Some things to think about before buying auto insurance through an agency either online or offline.

• Only deal with a reputable auto insurance company. Call your local body shop and ask who does not pay. Check their Department of Insurance complaints ratios and Better Business Bureau rating before purchasing insurance.
• Do not use a relative or friend's parking address because the rates are lower there. This happens when you live in a high risk area, like the inner city, and want country or suburban rates. If fraud is proven, the company could refund all of the premiums you paid, and cancel the policy back to the date you purchased it. Doesn't sound bad until you have to pay for an accident out of pocket, or pay off a totaled car to avoid prosecution.
• Make sure you are not over or under insured. Don't lower your liability coverage limits or declining injury protection just to save money, unless you cannot afford otherwise. Most people don’t carry enough liability coverage. Remember, if you’re liable for seriously injuring someone, medical bills can reach thousands. Can pay that out of pocket? Can you afford to be sued and have your wages garnished or your assets (including your home) seized and sold?
• Never put a friend's car into your name because his license is suspended or revoked, even temporarily. A very bad idea. There is a very good reason why the state does not want him on the roads. And your policy will be canceled if the company ever finds out.
• Only exclude a driver from your policy if your insurance company demands it or you are sure he will never drive your vehicle. If the excluded driver gets into an accident, you will have no coverage and will be responsible for paying for your own repairs and any liability to others. You will also could be canceled by your insurer.
• Don’t lie to either your insurance agent or insurance application. Insurance companies check your accidents, tickets, credit and other information on national databases and reporting bureaus. If you lie to your insurance company or omit to tell them about something that affects the rate (a young driver in your household, for example), this could be considered a “material misrepresentation", and any claim you make may be denied.
• Never drive without insurance. Driving without insurance is illegal in almost all jurisdictions, and the fines and increased insurance costs can be staggering. If you get into an accident while uninsured you will have to pay out of pocket for any injuries or property damage you are responsible for.

Written by Craig J. Casey

Financial Writer helping people with their insurance problems on the net since 1998.

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