If someone hits your car, you probably won’t have a very high opinion of that person. If that person then adds insult to injury by not having enough insurance to cover the damages, your opinion will probably sink even lower. And if you don’t have enough insurance to cover the damage that happens to your own car? Well, then you might end up kicking yourself.
But the truth is that anyone can make a mistake, and bad coverage can happen to good people. It might even happen to you if you’re not careful.
Bad Car Insurance Scenario #1: Low Limits
States set minimums for how much auto insurance people need to carry. While this amount is enough to satisfy the state’s legal requirements, it may not be enough to cover the property damage or injuries that you cause in an accident.
When drivers are underinsured, everyone can suffer. The person who’s been hit can have a hard time getting compensation. The person who caused the crash may lose their personal assets in a lawsuit.
When deciding on liability limits, think about more than just your state’s minimum requirements. Also consider how much coverage you need to make sure you can cover any damages you cause – without putting your assets in jeopardy.
Bad Car Insurance Scenario #2: Dangerous Exclusions
Insurance policies typically come with various exclusions. This isn’t necessarily a problem – unless your policy excludes something you need covered.
For example, let’s say you use your car for work purposes, like driving supplies to your worksite or making deliveries. You might also be a ride-share driver or other gig worker. Although it’s increasingly common for people to use personal vehicles for commercial purposes, this can lead to major insurance gaps because most personal auto insurance policies exclude commercial purposes. If you get into a crash while on the job, you might not have coverage. Don’t let this happen. Make sure your policy covers you.
Another type of exclusion is the named driver exclusion. Normally, every driver in your household will be on your policy, but you can choose to have a driver excluded. This can save you money if the excluded driver is a high-risk individual who increases the rates of everyone in the household. But if an excluded driver causes a crash, the policy won’t provide coverage. Think twice before excluded a driver on your policy.
Bad Car Insurance Scenario #3: Limited Coverage Types
The type of auto insurance you’re legally required to have will depend on where you live. In many states, drivers only have to carry property damage liability and bodily injury liability coverage. This covers damage that you cause to third parties, but it doesn’t cover damage that you may experience yourself. For that type of protection, you need additional insurance coverage.
Here are some insurance types to consider:
- Collision and comprehensive insurance cover many different types of damage that could befall your car – like if you hit a deer, get pummeled by a massive hailstorm or lose your car to a thief.
- Uninsured and underinsured motorist car insurance covers you if you’re hit by a driver with no or inadequate insurance.
Bad Car Insurance Scenario #4: Lapsed Coverage
Even though coverage is required under state laws, people let their auto insurance coverage lapse for a lot of reasons. They might forget to make the payment. They might not have money for the payment. Or maybe the insurer cancelled coverage, and they haven’t bothered to look for a new policy with a different insurer.
Whatever the cause, lapsed coverage is always a mistake. Failing to meet your state’s insurance requirements can lead to big consequences, including fines and license suspension. And that’s assuming you don’t get into a wreck.
Bad Car Insurance Scenario #5: Overpriced Coverage
You need insurance – but you don’t need to pay too much for it.
Are you a good student? A safe driver? Does your car have anti-theft equipment? You may qualify for insurance discounts these reasons as well as others.
But what if you can’t get a discount? If your insurance rates are high because of your driving history, you may be able to take a class to improve your rates. In the meantime, practice good driving skills. Your driving record will improve with time, and when it does, you’ll be eligible for better rates.
Need to get good car insurance fast? That’s where Jupiter shines. Get an online insurance quote now and get on with the good life!