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understanding car insurance

Understanding Car Insurance | Don’t Forget To Read The Fine Print

Understanding car insurance can be a tricky thing for some. There are an overwhelming number of options and you’re usually just on the phone with someone who’s rambling all of these off without any real explanation.

You’re forced to quickly decide what kind of sounds like the best option for a price you can afford and then when your bill arrives, the sense of confusion continues.

During the process of setting up a new car insurance policy, you probably didn’t ask questions about the fine print and you probably just focused on the cost and the main coverage (liability, comprehensive, collision etc). We bet that you skipped over some small (but important) details and it’s likely that the agent on the phone didn’t offer this information either. 

Do you know what factors play a role in the cost of your insurance? Have you taken the time to read and understand the really fine print on your policy? Do you fully understand what you are paying for and covered for?

Here are a few commonly misunderstood things about car insurance. 

The Basics That Affect Your Policy

Car insurance policies are not the same for everyone. Which company you choose plays a small role in the final cost, but there are a ton of other factors that will determine your coverage and what you’ll pay out of pocket each month.

If you’ve never set up an auto insurance policy, be prepared for a lot of questions.

So what do they look at when they are setting up your policy?

  • Make, model & year of the vehicle
  • Colour
  • # of doors
  • Where it’s parked
  • What city you live in
  • Past driving record
  • Age of the driver
  • Gender
  • How far you drive each year
  • What the vehicle is used for
  • Marital status
  • Past insurance history
  • Years of experience driving

These are just some of the basic factors that will determine your rates. Each insurance company is different so it’s important to ask questions on anything you feel unsure about.

The Policy Covers The Car, Not The Driver

So a friend is in town and needs to borrow your vehicle. The insurance that you have on your vehicle covers the vehicle and your friend’s insurance policy will play no factor in the event of an accident.

If someone other than yourself or the other drivers listed on your policy are driving your car and they get into an accident, your insurance company will cover the cost of repair.

If the person driving your vehicle is not driving the vehicle legally (no license, stolen, driving illegally) then the insurance claim will likely be voided. 

Be aware that in this event, even though it was not you driving the car, after an accident your insurance premiums will most likely go up. Again, this is because the policy is on the car and not on the driver. 

Accident Benefits Are Mandatory – And You Have Them

Understanding car insurance means knowing everything that you are entitled to in the event of an accident.

Most people just assume that your coverage is for the repair or replacement of the vehicle and maybe your policy entitles you to a rental car in the event that your car is in the shop for an extended period of time. 

But what about YOU?

If you have been injured in your vehicle you are entitled to benefits that cover possible time off work and medical expenses such as treatments for the injury. Whether you hit/were hit by another vehicle or drove off the road and hit a sign, you’re still entitled to the same coverage. 

Immediately after an accident, you need to report your injury to the insurance company at the same time you are reporting the damage to the vehicle. They will walk you through the steps needed to claim that coverage.

Oftentimes your injury heals quickly and you may not actually need to claim anything from your car insurance, but you can also end up needing treatments for weeks or months and that’s when it’s important to know you are covered.

Your insurance company will typically get in touch with the office providing treatment (physio for example). The Dr will send them reports to keep them updated on your condition and you are able to continue getting treatment without paying out of pocket.

You could be covered for treatments for as much as $50,000 (or more) so be sure to check the fine print on your policy to find out exactly how much you’re entitled to.

They Will Replace Car Seats

Did you know that even a small fender-bender means any car seats in your vehicle should legally be replaced?

This still counts as a collision and any infant/child seat that is involved in an accident needs to be replaced.

When you contact your insurance company to report the accident, be sure you tell them how many car seats you had in your vehicle at the time and they will cover the cost to replace them. 

Other Coverage You Might Not Know About

While there are car insurance minimum requirements, there are options you can add to your policy that you might not know are available.

Be sure to ask about the following options:

Gap Insurance: In the event your vehicle becomes a “write off” gap insurance will help cover the difference between the car’s value and what you still owe on your auto loan. If your car is totalled, and valued at $18,000 but you still owe $23,000 you would still owe $5000 on your loan. Gap insurance covers you in this event. 

Roadside Coverage: Don’t get stuck with a tow truck bill on the side of the road. With this added to your insurance you’ll be entitled to roadside assistance, some basic repairs, batteries etc. 

Uninsured Motorist Coverage: If you are hit by a motorist that does not have their own coverage, this addition to your policy will cover you. 

As a driver, understanding car insurance is extremely important. You spend a large amount of money each year to ensure you’re taken care of in the event of an accident, so why not take some time to fully understand what you’re paying for and what coverage you have. 

If you’ve recently been in a collision, be sure to exchange details with the other driver first and then contact your insurance company.

If your vehicle needs repairs, they may offer a list of shops to contact, but remember it is your right to choose whichever shop you feel most comfortable with.

Understand your policy, understand the process and understand what you’re entitled to. If you have any questions about your insurance coverage and the repair process, the pros at CSN JD Collision are always happy to help answer your questions.