Ensure you have the proper auto insurance coverage

(ARA) - We have all seen an auto insurance company ad on television luring customers on a premise of how easy it is to save money with them. However, it’s not about just saving money.

If you have the right coverage and you can get the same coverage with a different insurance company at a lower rate -- go ahead and switch insurance companies. But, simply omitting coverage on your auto insurance policy to save money is a costly decision that you need to carefully evaluate. The short-term savings of a few hundred dollars can become thousands of dollars in out-of-pocket expenses if your auto insurance policy doesn’t cover a liability or injury claim.

An auto insurance policy protects against future accidents. If there has already been a loss or damage claim on your car it is too late to obtain coverage or adjust your coverage to cover your losses and expenses. It is essential that you understand what your auto insurance policy covers in advance and how much coverage you need. Once you understand the type of coverage, obtaining several auto insurance quotes for the same type of policy and coverage will help you get a great rate. To see a listing of some auto insurance companies providing coverage in your state, visit www.einsurance.com/auto_insurance.

The best way to evaluate your insurance needs is to look at your lifestyle, habits and family structure and do a personal risk assessment on what you imagine can go wrong and what you would like insurance coverage for.

For example, if you travel frequently and rent cars at airports, simply declining the rental company's coverage thinking your own insurance will cover you in case of loss or damage is a big mistake. You have an increased risk of an accident in a rental car since you aren’t familiar with the vehicle, the location or the environment. Make sure you have rental car insurance coverage on your personal auto insurance policy. Also, you may want to ensure that, in case of an accident, you have rental reimbursement coverage from your insurer.

Another example is if you own a vehicle and someone else regularly uses it. Not disclosing the typical and regular use of another driver on your personal policy can cause a denial of your auto insurance claim should the other driver be at fault for an accident or property loss.

Obtaining minimum coverage just to save money isn’t wise. Assess your lifestyle and personal circumstances carefully. If you drive a 1999 truck that you use on occasion, minimum liability coverage as required by law in your state may work for you in general, but is not recommended. However, if you drive a fancy and fast sports car where you frequently test the limits, you probably want to increase your coverage.

Insurance policies generally insure against losses, accidents or occurrences, and cover both property and liability exposure, which are all defined as having a component of being unexpected prior to the inception of the policy. In an application for insurance, you will be asked to disclose losses of which you are aware. The losses you disclose will not be covered under the policy. If you fail to disclose a loss of which you are aware and the insurer learns of this failure, the insurer may be able to rescind your policy. In addition, the law generally does not permit the insurance of known losses. Even if the loss is ongoing, or a “loss in progress,” you will not be insured for any part of the loss to the extent you were aware that the loss began prior to the inception of your policy. So if you’re switching insurance companies and get more coverage with your newly elected insurer, having an old cost surface for damage under an old policy cannot be claimed under the new policy.

E-INSURE Services Inc., recommends that you not only shop for auto insurance quotes and better insurance rates, but you should ensure the type of coverage you want is listed in your auto insurance policy. Simply having an auto insurance policy doesn’t mean you’re covered if something goes wrong.

Courtesy of ARAcontent