If you’re a driver, you’re responsible for a vehicle that goes very fast. And you’re operating that vehicle around other cars that also go very fast. So, that calls for auto insurance, right? But car insurance comes with a very hefty document called a policy. If you’re eyeing that thing with a little bit of trepidation, that’s understandable. But there are a lot of reasons to read through your car insurance policy.
7 reasons you should really read your car insurance policy.
1. Make sure all the information is correct.
First and foremost, one simple reason to read your car insurance policy is to make sure that the information is correct. By reading over the declaration page and the policy, you can make sure that everything looks right. If there are any mistakes or anything, you can reach out to have them fixed. Make sure that everything is right and that it is what you thought it would be.
2. See if you have any questions.
This is also a great time to find out if you have questions about your coverage. Sure, your agent might have asked you if you had questions, and at the time you didn’t. Maybe you didn’t know what you had questions about, or maybe you fell prey to that thing where any potential query flies out of your brain the second someone asks for questions. (It happens to all of us!) At any rate, as you read your policy, take note of things you’d like some clarification on. Do you have “what-if” questions? “What does this even mean” questions? “Am I covered if” questions? Don’t hesitate to ask. It’s better to know than wonder – particularly if there’s insurance involved.
3. Check what coverages you have.
It’s important that you know what coverages you have for your car and that you know what each of these coverages does. Do you have all of the coverages you need, and is your insurance going to do what you think it will? What losses would be covered, and which wouldn’t?
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Some things to ask yourself…
- How do my bodily injury coverage and property damage liability protect me?
- Do I have collision and comprehensive coverage?
- Do I have UM/UIM coverage?
- Do I have rental reimbursement coverage?
- What deductibles do I need to be aware of?
The reason it’s important to look at your coverages and read your car insurance policy is that these coverages all do different things – they work together to protect you.
4. Look at the dates on the car insurance policy.
It’s also a good idea to find the dates that are relevant to the policy. When will it expire? Generally, this is good information to have, and by reading your policy you can help those dates stick in your head. Keep track of these things.
5. Review your limits.
As you read the policy, take some time to review your limits of coverage. Are you comfortable with your levels of coverage? Keep in mind that the state-mandated coverage may not be enough – they can be exhausted pretty quickly if you get into a serious accident. Consider those limits and make sure that you have the amount of coverage you want.
6. Find out how your car would be repaired or replaced if you have collision/comprehensive coverage.
If you’ve decided to get collision and comprehensive coverage, find out how your car would be repaired or replaced if a covered loss happens. For example, what if you have an accident and total the car? Would your insurance reimburse you for the Actual Cash Value of the vehicle – meaning the value of the car at the time of the loss? No one wants to think about totaling their car or anything like that, but you can be prepared if you’ve gone through your policy already. (And you’ll also know when your insurance will step in to replace your car, what deductible you might have to pay, and so on.) Pay attention to the details.
7. Feel better about paying for insurance.
Insurance is one of those things that is a necessary expense (it is required by most states, after all), but it might be a wrench parting with that money. By reading your policy, you can see all the things that your insurance will do to help you. You can get a sense of what you’re paying for. While car insurance might seem nebulous and intangible, you are paying for something worthwhile. Looking at your policy shows you what your money is doing – it’s paying for an insurance policy that protects you from the risks inherent to driving a car.
At any rate, though that car insurance policy looks daunting and perhaps slightly terrifying, give it a shot. You don’t have to do it all in one go – take it in pieces. Read a section at a time. But please do read your insurance policy. Get that information in your head – you’ll thank yourself later on when that comes in handy!
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