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10 shocking decisions that can ruin your car insurance

 10 shocking decisions that can ruin your car insurance

10 shocking decisions that can ruin your car insurance

Many people forget that your car insurance policy is, in fact, a contract. Insurance companies are not required to ensure you and your behavior affects the coverage you can buy.


You must pay the insurance premiums on time and follow the rules of your auto insurance company to keep your policy intact and lower your auto insurance rates.


But how do you stick to the rules when you don't even know them? Policies are long and exact terms and conditions may confuse you. Don't worry, we support you.


Here are 10 common scenarios Insure.com readers often ask our experts (we also have other frequently asked questions at the end of the article). If any of these things are familiar, now is the time to fix the problem before getting into trouble.


Read Also: How to compare car insurance rates

 

You have let your car insurance policy expire


Having been in a global pandemic for the better part of the year, people are learning to live with the modified lifestyles they are accustomed to.

 

Children attend school remotely, stores challenge shoppers and an unprecedented number of employees work from home. All of this - and more - adds to less income and fewer vehicle trips.

 

You might also be looking for ways to save. Auto insurance is one of the first places people tend to look for. If you don't drive as hard, you don't need your insurance, do you? wrong.

 

If you cancel your insurance and return it after three months, the insurance companies consider it a coverage mistake. CarInsurance.com managing editor Michelle Megna said that insurers view people with interruptions in coverage as high risk.

 

Insurance companies usually group people with slow coverage with those who did not pay their bills or were canceled due to high-risk driving.

 

This is why it is essential not to let your insurance expire. 

 

Upon cancellation, the following occurs:

 

Since the vehicle is registered in your name, your state's DMV assumes that you drive it. So, you usually have to hand in plates and de-enroll - or face fines. So, there are a lot of loops that you can jump through if you plan to start driving again fairly soon that you will have to record it again.

 

You will also lose any auto insurance discounts, such as multi-car, collection, driver safe, and loyalty.

 

When you return coverage, you will pay, on average, 9% more.

 

This is because, like bad credit, insurance companies say their research shows that drivers who experience a slowdown in coverage are at higher risk, which means they file more claims, which means that insurance coverage is more expensive.

 

You don't care about your credit score


An auto insurance policy is like having a line of credit. The insurance company trusts that the insured takes utmost caution while driving and pays his bill on time.

 

It is a leap in faith and the decision to trust all in one. One of the tools that insurance companies use to determine insurance and lower risk factors is your credit score.

 

So, if you decide to forego another loan payment in installments, remember that it could affect your car insurance in the future. Is it really worth defaults on this furniture loan when you know you might not be able to drive when you need to?

 

You have not added a newly licensed teen to your car insurance policy


Can my son drive my car if he is not insured?


Nobody wants to raise their hand and pay more to secure the car. But insurance companies are permitted to consider all residents of the home when pricing a policy, including a licensed teen. Withholding information about your teen driver from your insurance company is unacceptable.

 

And don't think auto insurance companies will know a thing about your teen - they have ways to find out. The auto insurance company can pull reports identifying "hidden" family members.

 

One such report from LexisNexis looks for newly licensed "undiscovered" young drivers between the ages of 15 and 25. If the insurance company finds out about your teenager licensed in this way, they can review your premiums to include the young driver or decide they don't want to work anymore.

 


If your insurance company doesn't find out about your teen until an accident, you may still be covering the accident. This might be a lucky outcome, but you'll likely owe a refundable premium depending on when your teen driver was licensed - so you might have to pay an insurance company a lot at once just to cover the accident and your teenager's insurance.

 

Or, your auto insurance company may say it does not cover the teen and abandon your policy because you did not inform the company. They call this misrepresentation and it can be considered insurance fraud.

 

Adding a driver to auto insurance is quick and easy and shouldn't be delayed.

 

You allowed your adult child to take your car with her when you moved to another state


Sure, it's easy to put off a call with your agent and let your child drive away with a family vehicle, but this is not recommended.

 

When your vehicle is driven and parked in a garage in a new area, the risks you pose as a customer will change. Auto insurers expect to be informed of these changes.

 

If your daughter has had an accident, your insurance company may say that you concealed vital information about the vehicle’s location, rejected your claim and canceled the policy.

 

Add the child's name to the car's address. After that, your child can insure a car in his name using his new address. This will also allow your child to register the vehicle in its brand new condition, which most states require.

 

You sold your car to your son but still has insurance


Can I insure a car that is not in my name?


In general, you cannot afford to be insured on a vehicle for which you do not have an "insurance interest".

 

Typically, the insurable stakeholders are the car owner, the franchisees, and the co-signers - this means those who would be affected financially if something happened to the car.

 

Since you are no longer the owner of the car and you no longer have an insurable interest, it is time for the new car owner - your child - to purchase car insurance for the car. 


f he is still a minor, you may have to follow the policy with him. Minors usually have to have a parent or guardian in the car insurance contract.

 

You may have problems filing a claim if you fail to tell your insurance company a change of ownership. Or worse, your auto insurance company could say that you concealed the change as a scheme to get lower auto insurance rates, which would be seen as insurance fraud and a reason for rejecting claims and canceling the policy.

 

You want to finance and insure a car for a relative who lives outside the country



Auto finance companies want proof that the car loan has the same name as the insurance policy. Since you are not the primary driver of the car, nor the car at your place of residence, it is difficult, if not impossible, to have the car insured.

 

You should contact the finance company to find out if they will allow your relative to be the "insured" on the policy. If she agrees, your relative faces a hurdle in finding an insurance company in her state that allows her to insure a car that she does not own.

 

If it does find such a company, it should still list you and the financing company in the insurance as the vehicle owner and franchise holder, respectively.

 

If you carry car insurance without letting your insurance company know about the situation and your relative smashes the car, it is very likely that the accident will not be covered. The car insurance company may call you to misrepresent who was driving the car and where it exists and abolish the policy and cancel the policy.

 

Also, remember that each state has its own auto insurance laws, so if you do insurance in your state while driving and parking the car in another state, the insurance policy will not match the rules of the state in which it is located - another problem the insurance company might have if they think about covering any type of accident. .

 

You loan your car to a friend for a few months and don't notify the insurance company


Your car insurance policy usually covers a friend who drives your car occasionally, but it is different when you loan your car for a long time. The car is now somewhere other than where you live, and someone else is the primary driver of the car. You want your auto insurance company to know about these conditions.

 

If your insurance company's rules Allow, you might be allowed to add your friend as a drive to your insurance policy. However, most auto insurance companies do not want to add a person from outside the home. If so, your friend should consider car insurance.

 

Some insurance companies allow a person to insure a car that they do not own, as long as the car owner is included in the policy.

 

If your friend breaks down your car without the insurance company knowing and agreeing to the friend’s insurance, they can reject the claims because you withheld relevant information about the "real" location of the driver and vehicle. It can leave you and your friend in trouble because of the damage you cause.

 

You serve pizza with your personal car - or drive for Uber


Most auto insurance policies exclude coverage if you use the car to deliver items, be it pizza, newspapers, parcels, or medical supplies. Insurance companies see risks in delivery drivers because they are always on the road.

 

If you wish to be paid for delivery of the items, you must change to Commercial use or a commercial auto insurance policy. If you don't and are arrested while driving the delivery, you are on your own to compensate others for their damage - and damage to your vehicle.


If you go from pizza delivery to driving people for money, make sure the insurance company knows you have the right coverage. Car insurance companies exclude coverage for drivers who do business, whether it's for pizza delivery or people to a destination.


But as trip sharing has become a big business, many car insurance providers now offer policies or approvals that drivers can purchase to add to their regular policy that will cover them for at least the first period at least.

 

The first period is when the driver is available to hire but has not yet accepted the bid. If you don't have this special coverage and have had an accident, don't look for your insurance company to cover any accident claims that happen during your cruise sharing adventures.

 

You are supposed to have your own document as the basic document for certain periods and because of that, it may not cover any accident costs.

 

Also, if your insurance company detects that you are a co-driver in your personal car and fails to inform it, expect your policy to be canceled.

 

You bought a new car weeks ago and didn't tell your insurance company


If you are trading a car, your car insurance policy will likely extend the exact same coverage to your new car for a limited time

 

The deadline for reporting a new vehicle to your insurance company varies depending on the insurance company but is usually 14-30 days.

 

Here's more on extending coverage to new cars

 

The bottom line is: Don't bet on an automatic coverage. Some auto insurance companies don't give you anything.

 

And if you are adding a vehicle rather than replacing one, you must purchase coverage for it before taking it off the site.

 

The insurance company will not help you if you are outside of the insurance company's automatic coverage period or if there is no extended coverage for your new car.

 

You have not told your insurance company that your resident girlfriend is driving your car


Insurance companies hate it when they "forget" to tell them about a driver who lives with you or uses your vehicle regularly. Insurance companies cannot properly collect fees from you if you are not aware of all authorized family members, including a girlfriend or spouse.

 

If you recently married or moved in with someone, let your insurance company know right away and add them to your policy as a driver. If you fail to do so, don't be surprised if claims are rejected if you cause an accident or if you are required to pay insurance premiums based on the extra driver.

 

If your insurance company thinks you are intentionally hiding the driver - say your girlfriend has a poor driving record - it might say you committed a fraud by faking it. This means that your car insurance company can cancel your policy.



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