Auto Insurance Tricks and Tips

I think that during times like these, when the economy is down and companies are struggling, it is especially important for consumers to make sure that they are fully covered. Or at least, consumers should understand how their coverage will pay for an accident so they do not lose their transportation if they do have an accident that requires an insurance claim.

Auto Book Value Settlements

I think that this one catches a lot of us who drive an older car. Just when times are tight, and we try to do the right thing and keep our older car repaired because we are hesitant to take out a new car loan, we can be especially vulnerable to having our car’s totaled.

I have certainly had this problem. I drove an older van, but it had a great engine and I had been careful about keeping up with scheduled repairs. While driving in a parking lot, another driver backed into my sliding door. As the van was a few years old, the insurance company decided that replacing the sliding door with a new one, and painting everything to match (since the car had faded) would cost more than the book value of the vehicle.

How Much Is A Car Worth?

However, the car was worth far more than the book value to me! I knew that it would be practically impossible to replace that van, which was still in great shape except for the wrecked door, with another reliable van with the money that the insurer would offer me to fix it. The insurer’s judgment seemed very unfair, but this is the way the industry usually works.

I settled with them for cash, rather than just having them pay a repair bill (which they would not do anyway). I took this cash to some independent body shops and asked them if they could help. I found an owner who said he could find a used door, paint it to match (but not paint the whole car), and have my van in safe and working order for just about the money I settled for. He even offered to lend me a car to drive, for free, while he repaired my van!

It would not be the perfect job one expects when collecting on an insurance claim, but it seemed like a reasonable compromise. When things don’t work out perfectly, sometimes we just have to fall back on settling for a solution that gets us back on the road.

The shiny red door did stand out against the dull and faded color of the rest of the van, but I still had a safe and functional vehicle. The body shop may have liked to make more profit from doing a more complete job, but they settled for making some money off of my business. The higher end body shop that would not compromise did not get my business. I did argue with the insurer and got a bit more money than they wanted to settle for at first, but it was not as much as a full repair job.

It Is Time To Assess Your Auto Coverage

If you try to save money by keeping your old reliable vehicle running a bit longer, be aware that you run the risk of having insurers try to settle claims with you for less than the cost of repairs. Of course, this can also hurt a new car owner too. Many people drive cars off the lot only to have them depreciate by 20% or more in the first few months. This means that new car owners usually owe more on their vehicle than the vehicle is worth! That is why auto gap insurance, a product that covers the difference between the car book value and the loan amount, has become popular. You need to understand what insurers will pay, and what amount you will need to pay if you do have an accident!

Make sure you find the best auto insurance for your unique driving situation. We make it easy with our online auto insurance quote forms!

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