All About Auto Owners Insurance

The warnings and unimportant clauses included in the fine print of auto insurance policies seem to make the difference between good and bad policies. You can ask your insurance agent the following questions before signing the car owners insurance contract, and ensure that the matching answers are in the document itself.

Is this a “family” policy or a “insured only” policy?

Family policies protect both drivers in the home and anyone who lends their cars, while “insured only” policies cover drivers explicitly mentioned in the policy. Family policies are likely to cost an additional 10% to 15% (or higher, depending on many factors, such as the driving records of any other drivers), but they would be the right choice if anyone other than the policy holder is driving. Many car owners don’t understand that they have only insured policies in place, and they loan their cars to friends and family unaware that they may not be covered in the event of an accident.

Do I have the right to decide on my repair facilities and decide on original equipment manufacturer (OEM) parts with this policy?

A number of insurance agencies, including Geico, Nationwide, and Progressive, have reformulated some auto insurance contracts to limit car owners’ repair choices after accidents. Using aftermarket parts – parts not made by the vehicle manufacturer – on your vehicle may void your warranty. For example: You must change your coolant after a car accident. A year later, your engine stopped. It is possible that the dealer will not honor your warranty due to the aftermarket coolant.

Does this insurance policy contain an appraisal clause?

This clause allows the policyholder to seek an assessment in the event that the insurance provider offers you a lower amount for a combined vehicle than the policyholder believes they value. Also ask: Does this evaluation requirement allow a third participant to be appointed by a “jurisdictional court”? Using this method, when the policyholder’s appraisers and insurers are unable to agree on whom to choose as the arbitrator, either of the appraisers can request that a judgment be appointed by a competent court to break the deadlock. If the answer to any of the questions is None – be warned. You may be incapacitated if your insurance company claims that the value of your car is less than the value of the Kelley Blue Book or NADA (National Association of Automobile Dealers) guide.

Does the “Limitation of Liability” section of the contract contain the phrase “as we have determined”?

This specific part of your car insurance policy places limits on how much the insurance company will pay. It can be argued that the insurance company cannot pay “more than the prevailing hourly labor rate for repair shops within the area”, or “no more than a competitive estimate of repair costs”.

Unfortunately, some insurers have begun to include “as determined” at the conclusion of restriction clauses in some contracts, giving the insurer the right to insist on below-market repair rates. Their policyholders are required to either take their vehicle to the insurance company’s “approved” repair shop, which is willing to make repairs for this lower rate, or take the vehicle to a superior repair shop and pay the difference up front.

Where do you find the best insurance company?

Some insurance companies make a responsible attempt to look out for their clients’ interests, while some consider mostly their own bottom line. Wise ways to find out which…

Check the level of customer problems. Contact your state’s department of insurance, and ask which insurance companies have the lowest customer complaint rates.

Examine customer satisfaction ratings. Business research firm JD Power and Associates produces its annual auto insurance customer satisfaction survey. His latest reviews can be found at

Get suggestions from the managers or owners of The Body Shop. Ask which insurance companies take good care of their customers and which ones are trying to minimize repairs.

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