The Basics Of Why Car Insurance Is Important And Why It Matters

Having car insurance is the best protection in case of an accident. It will provide for repairs for the other person’s vehicle if you are at fault and also pay for repairs on your car after you pay your physical damage deductible.

The idea behind any insurance is to make whole. What the insurance company is supposed to do is restore the vehicle or vehicles involved in an accident to the condition they were before the accident. However, what the insurance company considers the same condition as before the accident and what you think it should be can be quite different.

The best example is the insurance company does not necessarily think that they have to use the manufacturer’s parts to fix your vehicle once it has been in an accident. They consider after market parts acceptable even if the quality is not the same. If you insist on the manufacturer’s parts and not the after market parts you may end up having to pay the difference out of your pocket. Discuss this with your adjuster before any work is started on your vehicle. This will save you any surprises along the way.

If you are in a serious accident and the insurance company decides to total your vehicle and you still have a loan on that vehicle; what they may want to pay you for your totaled vehicle may not necessarily pay off your loan. However, you do not have to accept the first offer they make. Do your research and find out what vehicles of the same make, model, year, accessories, and mileage are selling for in your area. If what the insurance company is offering you is less than what your research indicates, push back and ask for more money. If what the insurance company offers you is reasonable, but won’t pay off your loan…you are responsible to pay off the balance of the loan. You borrowed the money, you have to pay it back.

The upside to having insurance is it can very well save you from being sued if you didn’t have it. And if you are sued by the driver of the other vehicle, your insurance company will pay for your defense, most of the time. The adjuster is walking a fine line. They are being paid by the company. In the best of circumstances they are to investigate and reasonably pay for losses. On the worst of circumstances they will low ball you and try to save the insurance company money.

Do your research before you buy auto insurance. If you work with an independent agent they will be able to get quotes for you from several different companies. Again, in the best case scenario the agent is looking out for your best interests. But they are also trying to make a living. If one of the companies the independent agent represents is offering incentives or a higher commission than the other companies he/she represents, they may encourage you to go with the company providing the better incentives.

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