Inspiration By Experience

Archive for the ‘Car Insurance’ Category

You always hope for the best whatever you do. Let’s face it, setting off expecting the worst often becomes a self-fulfilling prophesy. So when you learn to drive, you first hope you will never have an accident. Then you hope you will only have a small accident. The idea of a total loss is not something you want to think about. Yet it’s surprising how often you find the insurer wants to total your vehicle; and then there are the times when your pride and joy disappears off the face of the Earth. That’s a really sad moment. So what are the rules when the unthinkable happens? In this, don’t forget the minimum liability policy is no help. For repair of your own vehicle, you need a collision policy. To recover value should your vehicle be stolen, you need a comprehensive policy.

Let’s start with an accident in which your vehicle is damaged. Your first instinct is to repair. The insurer gets estimates. If it’s going to cost more than the market value of your vehicle, the insurer will offer you a check. Now comes the really sad part. The check is for less than you expect. This is not the price you paid. This is not the price you think the vehicle would command if you advertised it for sale. This is the price the insurer thinks you will have to pay to buy a similar replacement. So you may have showered love on this vehicle. Its paint may gleam in the morning sun and it has been perfectly maintained. You look at the check and see it will only buy an unloved wreck. But there’s worse to come. Suppose your vehicle was bought using an auto loan and the amount of the check will only pay off a part of the money outstanding on the loan. To cover this gap, there’s a separate insurance policy you can buy. That way, there will always be enough to pay off whatever is owing to the bank or finance company. Read the rest of this entry »

One of the things we’re all supposed to do is read the policy before we part with our money. That way, we see the limits of what we’re buying. So, for example, if you live in a flood plain and there’s an exclusion for water damage to your vehicle, you can make the right decision. In most of the cases, it’s going to be clear where the problems are. With this understanding, you either accept and work round the problem, or you look for an alternate policy. More generally, you might run into ambiguous terms. If you do find one, here’s a note of reassurance. Courts tend to favor you as the consumer. So, if there are several ways of reading a policy, the judge will pick the one most favorable to you.

One of the more common terms where this applies is the work exclusion clause. Let’s take the obvious extremes. If you run your own business and need to drive a vehicle, you should buy a commercial policy. If you work in an office and only use your vehicle to drive to and from work, a personal policy works fine. But there’s a big grey area in the middle where your employer might ask you to drive your own vehicle. The general rule would be that, if this only happens once in a blue moon, the personal policy will be sufficient. But if this is a regular part of your job, a commercial policy will be needed. In the best cases, your employer will provide a vehicle and insure it for you. But life’s not always so convenient. In a recent case decided in Minnesota, a man was working as an independent contractor, picking up work wherever he could. At the time of the accident, he was paid to deliver library books and used his own car. There was a work exclusion term in his policy. Read the rest of this entry »

The fad for electric and hybrid drive is still on the rise these days, with more models being introduced by car makers and new incentives offered for purchasing such environmental-friendly vehicles. You see more of these vehicles on the road and it may look like a good bargain to buy one. But what’s the situation when you actually try to insure such cars? Are they on par with their carbon-footprint peers or there are some peculiarities when it comes to covering such vehicles?

While electric motor vehicles haven’t been around for long enough to speak about any lengthy claims history, hybrid cars have been on the market for almost a decade and insurance providers have all the statistics they need to determine adequate insurance rates for such vehicles. And to much surprise, owning a hybrid vehicle doesn’t automatically mean that you’ll get better insurance rates. Read the rest of this entry »