What To Check Before You Sign An Auto Insurance Policy

We can't emphasize enough the importance of reading and rereading an auto insurance policy before you sign it. You don't want to discover after the fact that the coverage you expected does not exist. Never assume.

Before signing, be sure you specifically understand what car insurance protection you're receiving.

 

What to Check Before Signing Your Auto Insurance Policy

Don't rush when it comes to signing your car insurance policy. Take your time, and don't hesitate to ask a question about anything you don't understand; have the insurance company or insurance agent explain it to you in simple terms.

When reviewing your policy:

• Do not sign any contract with an empty space. Have the insurance agent draw a line through it if no additional information is required.

• Don't sign if the contract denies you the right to sue the insurance company. Otherwise, you'll lose the right to take the provider to court should you have a disagreement over coverage. Without this option, the insurance company may be more apt to take advantage of you, playing hardball with your accident claims.

• Think twice about signing if the policy contract states "aftermarket parts may be used for any needed car repairs." If your vehicle is new, you don't want it being repaired with "aftermarket parts."

• Make sure the insurance amounts meet your state's car insurance requirements.

• Make sure you're not buying coverage you don't need. If, for example, you car has a $1,200 value, it makes no sense to carry $3,000 worth of collision coverage.

• Make sure all of the optional coverages you think you're paying for are listed. For instance, if you've opted for rental car reimbursement in the event of a car accident, be sure you actually see this listed on the contract.

• Check the deductibles. You decide the amounts, not the insurance company.

• Be sure all of your car information is correct. This includes checking the vehicle identification number (VIN).

But before you even reach the contract signing stage, take the time to research the provider as well. This is especially important if it's a smaller, independent auto insurance company. You don't want to sign a contract with an unreliable insurance provider.

To research, you should:

• Contact your state's insurance department. You can do this online or via phone. You can find a link to this department on your state government's website.

• Check with auto body repair shops and car dealerships. These people deal with insurance companies daily, and can offer first-hand recommendations.

• Check the company's financial strength rating with A.M. Best or Standard & Poor's.

• Check how the provider rates on J.D. Power and Associates consumer satisfaction survey.