Car accidents are a pain, there’s a lot to keep in mind when they happen and sometimes even the most prepared person can overlook something. Most people misinterpret their auto insurance policies at least a little. They believe, in some cases understandably, that once their car is "covered" everything will be fine in the event of an accident.
Unfortunately, without taking the necessary time to read their policy, these drivers are often caught unprepared for expenses they didn't know they would be expected to pay. Some refer to these misunderstandings as "gotchas," but most of the time they are merely oversights on the part of policyholders who, either through inexperience or lack of time, don't make an effort to understand their policies fully.
Here are some hidden pitfalls to consider.
Deductible
This is one of those provisions in the insurance industry that non-insiders might not understand. A deductible is an amount the policyholder is responsible for in the event of an accident. It includes the first dollar of any claim up to the deductible amount. This does two things. First, it reduces the insurer's liability. Second, it prevents minimal amounts from being claimed. Every policyholder should be aware of their deductibles and the fact they may be different from claim to claim.
Cargo
While you may have comprehensive and collision coverage on your vehicle, you should know that anything your vehicle is carrying that is not physically attached to the car is likely not to be covered by your policy. This is also true if you are hauling something in your trunk or if you are driving a pickup.
No-Fault Claims
If you have coverage, you should be reassured you won't have to pay for the damage in an accident. But even if the accident isn't your fault, you can still find your rates increasing if you file a claim. Some states have different laws than others on this matter. According to personal injury lawyers, there are many types of factors that go into a car accident, such as drunk or drugged drivers, mechanical and part failure, road hazards, and installation and inspection errors. But regardless of all these different types of accidents or your part in it, some states are no-fault, and you’re going to want to prepare accordingly.
Your Family
Make certain your family members are each individually listed on your car insurance policy, like teens for example. Otherwise, you may find they are not covered if they are injured in an accident. While you should also have health and emergency medical insurance, your auto policy will sometimes be first in line for coverage. This is one of the most critical audits you can perform on your policy.
It never hurts to speak with an accident attorney or even a business attorney about the different kinds of coverage, the financial terms, the jargon and the possible gaps you can face in a boilerplate auto policy. Ask your insurer about your coverage and make them explain it to you until you're satisfied you won't be suffering an accident with a defective policy.