Reading Your Insurance Policy
Most people buy auto insurance like they buy groceries. They go online, enter their driving history, take a look around for the best price, get what they think they need, and never think about it again until the following year when it is time to do it all over again.
The problem with that approach is that most drivers have no idea what kind of coverage they have purchased, and what coverage they actually need in order to adequately protect themselves from being sued and also protecting themselves in the event they, or a family member, is injured in an accident caused by someone else.
The information I am conveying will enable the consumer to make intelligent choices when it is time to shop for auto insurance coverage. After reading, if you determine that your coverage is inadequate, I would not hesitate to make the appropriate changes as a policy can be changed at any time. Additionally, I would suggest that if you make changes over the phone, put what was requested and the time frame for when that new coverage would go into effect in writing (either by letter or e-mail with confirmation of receipt).
As a practicing personal injury lawyer for over two decades, I cannot tell you how many times I have been talking to one of my clients and they will tell me that they had called their insurance provider on x date to change x coverage only to find out at the time an accident took place that the changes had not only not gone into effect but there was no record of any conversation or request for a change in coverage.
Keep in mind that the business model for most insurance agents is to have all of the grunt work and client hand holding done by a lesser paid employee while they keep their day free for the “Big Fish” who want the 5 million dollar Universal or Whole Life policy where the agent can charge thousands in commissions. That lesser paid employee typically does not posses the same knowledge as the agent and they may not do exactly as you request when you call into to make the changes to your coverage.
Moreover, it is also a good idea to confirm via e-mail what coverage you indicated you had purchased. It no longer surprises me when clients come to see me and inform me that they thought they had better coverage than the policy described. My first question to them is, “Did you look at the policy once it came in?” (it usually takes three to four weeks after the yearly visit to actually get the policy) and the answer is generally “No.” Always read the very important “Declarations Page,” which describes the amount of coverage purchased under the policy.
When it comes to auto insurance in California, keep in mind there is no “grace period” where the policy is extended after its expiration date. Once a policy expires, it does so at the stroke of midnight of the date reflected on the Declarations Page. There are no exceptions to that rule and having an expired policy here in California can be very detrimental to one’s financial well being, as I will discuss below.
The Automobile Insurance policy
The typical automobile policy in California can have up to NINE different provisions. I cannot tell you how many times clients and potential clients have informed me that they purchased “full coverage” only to find out that what they had, instead, was “minimal coverage”. Minimal coverage is the coverage that you need in order to drive a car legally in the state of California. Under California law, you are only obligated to carry $15,000/$30,000 bodily injury coverage and $5,000 property damage coverage. Accordingly, many people are driving their vehicles thinking that they have all nine features of an automobile policy covering them but are really driving their vehicle missing approximately 80% of the coverage.
If you are in the market for auto insurance, protect yourself from their game by reviewing the way your policy is worded prior to purchasing your policy.
— Chris E. Russell | Attorney at Law
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