Some Little Known Auto Insurance Issues

Some Little Known Auto Insurance Issues

September 13, 2016
auto insurance issues
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Most of us never think about filing an auto insurance claim. We convince ourselves that we’re great drivers, that accidents can’t happen to us. But they can, whether we want it or not, whether we like it or not. And, when this happens, when you finally have to file that claim, that’s when you encounter a few auto insurance issues that will leave you speechless.

These issues are the things that you misunderstand or overlook. They can be little things, but they can cost you a lot of money. That’s why you need to be aware of them.

A few letters can cost you hundreds of dollars

Have you ever heard of uninsured motorist protection? How about underinsured motorist protection? At first glance, these two words almost look the same. They can also sound the same if you’re not really paying attention when speaking to your insurer. But they are very different.

Uninsured motorist protection pays for treatment, property damage, and other costs associated with an auto accident, if the at-fault driver does not have any auto insurance. Meanwhile, underinsured motorist protection applies to drivers who cause accidents, have auto insurance, but their policy isn’t big enough to cover all the damages.

“Uninsured” and “underinsured” might look and sound the same, but those three letters can cost you hundreds of dollars if you’re not paying attention. Make sure that you fully understand this auto insurance lingo before signing anything!

Auto insurance doesn’t really work the way you think it does

Most people believe that, if you get insurance for your brand new car and are afterwards involved in an accident, your insurer will cover the entire cost of your vehicle. This is not true.

The value of your car drops the minute you exit the lot. And it continues to drop with each passing year. If you’re involved in an accident just a little over a year after buying your car, you’ll be surprised to see that your insurer won’t pay you the money you need to cover the entire cost of the vehicle. In fact, the amount of money will probably be pretty low in comparison to what you paid for the car. Fortunately, that’s where gap insurance comes into play. Few insurers will tell you about it, but this may just be one of the most important types of auto insurance you can get, especially when buying a brand new car.

Although your auto insurance will only cover a portion of your auto loan, your gap insurance will take care of the rest.

Make sure you get the parts that you want

Many people don’t know that insurers can dictate what kind of parts you get with your repairs. Replacement parts from the manufacturer are referred to as OEM parts, while parts from third parties are known as aftermarket parts. Knowing the difference between these is crucial as it can make your car a lot safer.


Thomas Hookton is a finance journalist, history buff and science fiction connoisseur. Hit him up via email.

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