Important Things You May Not Know About Auto Insurance
By Teresa Ambord
Most of us are always hoping for a better price on those pesky necessities like insurance. Suppose you find a better deal on auto insurance and decide to go with the new insurer when your current policy lapses.
You know that if you are slightly late mailing a premium, you’re sure to get a threat of cancellation, right? So you may assume that all you have to do is not pay the next bill, and you’re done. That may be a mistake. Just because they threaten you, they may not cancel your coverage right away. And rest-assured, you will get a bill. If you don’t pay it, your credit report can get dinged. And if you do pay it, you end up paying two carriers for the same insurance. Do yourself a favor and just send them a message ahead of time, stating that you are canceling your insurance and the effective date. If time is short, call them with the information. They may send you a cancellation form, or just ask you to put your request in writing. Whether they ask for a written confirmation or not, send one and keep a copy.
Another problem with allowing your policy to be cancelled… that may label you as high-risk by future insurers, and high-risk means high premiums.
If you are changing insurers and still driving your car, be sure to coordinate the stop and start dates so you don’t end up uncovered even for a short time.
Sure, it’s a pain in the neck, but just take care of business and you’ll save money and protect your credit and ability to get insurance in the future.
If you’re buying, and especially if you’re leasing a car… you should have gap insurance. It’s no myth that your car loses value immediately. If you finance it and then have the misfortune to have an accident that totals your car, you will owe the full value of your loan, even though your insurance will probably only cover the fair market value. You could be out several thousand dollars… or, you could spend a little extra to buy gap insurance, and let it be your insurance company’s headache.
If you buy the minimum required limits for bodily injury liability and you cause an accident, you’d better hope the dollar cost of the injuries and/or damage you cause are covered by your policy. If not, the injured party can come after your personal assets, such as your home and any savings you have. Rather than save money on the minimum insurance, see what a high deductible will do for you.