Are you being led to believe a lie?

If you believe that all auto insurance is the same you are.

If you shopped for Auto Insurance lately, you are probably one of the many who have been led to believe that the most important thing in buying Auto insurance is the lowest premium.  The question is, do you believe it?  

There are literally thousands of Auto insurance companies in this county and some companies have more than one policy.  So there are lots more than thousands.  

Why would anyone want you to believe all policies the same?

Here is my opinion.   Auto insurance is easier to sell if an agent can get the potential buyer  to believe that the only thing that needs to be considered is the premium and not the coverages.  The less questions the better.  If you have an insured who has bought insurance before the assumpton is that they need not have anything explained to them and that they have enough basic knowledge to make an intelligent decision.  This is a joke.  I am not saying that people are stupid, but here are the facts.  Most people have only a surface knowlege of Auto Insurance and Agents know it.  That is why some Agents are satisfied to let you believe you are an expert.  They don' ask many questions or give you much of a  presentation.

Let's examine why some policies may be different.   

All Insurance policies are made up of various clauses or provisions,(They will be called clauses from here on) exclusions and definitions.  The clauses explain what will happen in the event certain actions take place. (Example: The insured vehicle strikes another parked vehicle) The definitions explain what the words mean in the clauses, and the exclusions take away any coverages the company does not want to insure.

Each company either writes their own polices or rents another companies policy language depending on their size and experience.  This collection of words is called a policy.   Each State has an Insurance Commissioner that administers the insurance laws in the state, however, the Insurance Commissioner's job is not to determine if a policy is any good or not, his or her job is make sure the premium is high enough to support the claims that is projected the company will have.  So could there be bad policies?  It depends on what you mean by bad.  By bad do you mean excluding loss to a claim that you might file?  I am guess it happens every day, but generally claims that are excluded are not news worthy and no one ever hears of it.  You will see anexample below of an exclusion and how it might effect an insured.  Click here

Each company has its own attorney or group of attornies to handle their legal matters,  it would be foolish to believe there is no differnce in policies and thus coverages.

One more point.   Most people have only minor accidents in their life time.  Minor accidents are the kind that generate a few thousand dollars in claims and are easily settled.  So the perception is thus created that there is no difference if most of the claims are settled

So of couse the question then should be asked does it make a difference?  This is the most difficult situation that any buyer of Auto insurance faces.  Because once you become aware of the differences you cannot accept a policy that does not cover the lesser known types of losses that can and sometimes do occur.  

How can you find out which policy you should buy?

The question then comes into play is how do you find out which policy is a good one and sort out the not go good ones?  The answer is: you must know which questions to ask the agent you are dealing with.    The book contains background information that will help you understand why the questions need to be asked.   The real quest is to find a good agent with good policies with a relatively low premium.  Low premiums and quality does not sound like words that would be used in the same sentence, but one can hope.  

As the author of this site and of the book Understanding Auto Insurance, I cannot report  which Company offers the best policy.  But when you know the questions to ask you will get answers that will help you decide. 

There are two coverages shown below that are often misunderstood.  Below is a link follow that will take you to an explanation of each.  

Uninsured Motorist coverage 

Underinsured Motorists Coverage

The book shown above is available for a modest price of $14.97 to help any insured better understand the questions they need to ask to determine the value of their auto policy.

If you believe that all auto insurance is the same then you need to know which questions to ask your agent.  You can find out which companies offer valuable coverages by learning about exclusions and the way words are defined, but you have to know which questions to ask.  That is the reason I have written the book, Understanding Auto Insurance.  It provides the reader with enough background information to enable one to  intelligently discuss the insurance you might be inclined to buy

Whether it is online, over the phone, or in person. You just need to get to know your agent.

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Here is an example.

In some policies fire could be defined as a flame that  creates heat and smoke.  In other policies fire could be defined as a source of heat that could destroy surrounding mechanical and electrial components.   Would it make difference?  It could if you have ever have a wiring harness short out.  With one definition the loss would not be paid, under the other it would be. A wiring harnesses shorting out can cause several thousands of dollars of damage.  Do they short out frequently?  No, but if it happens to you, you won't care how many times it has happened to someone else.  

Another example.  Several years ago a farmer told me this story.  He was pulling a farm implement from one farm to another and had to cross a highway to get from one field to another.  He came to the stop sign, looked both ways,  then progressed to pull onto the highway.  When he looked back to the left he saw a Semi Loaded with grain heading directly at him.  The farmer stopped but by this time was half way accross the highway.   The Semi driver did what he thought was the correct move and swerved toward his left.    This caused his trailer to tip on its side pulling the tractor over.  The whole rig on it's side,  slid past the farmer directly into the pumps of a service station continuing on into a building where it came to a stop.  All the while the farmer is just sitting in his pick-up watching.  When he finally realized he was OK, he pulled his pick-up accross the highway to a parking space and went back to see if he could help.   The driver was being assited by a couple of people who worked at the service station and it seemed was unhurt.     The damage at the tiime this happened was relatively small only in the $100,000 range.  The farmer had $50,000 property damage liability on his policy which the Compay paid out leaving the balance of $50,000 for the farmer to pay.   He did so with gratitude, understanding he driver could have made a different decision.   What was the lesson leanred?   At the time, a $0.75 premium per 6 months would have bought the additional $50,000.  In hind sight a great deal. 

This ebook entitled Understanding Auto Insurance  is modestly priced at $14.97   and is available immediately after payment as a download. You can use of the methods shown below at paypal.  If you decide not to keep the book, you have 60 days to return it with no question asked. 

All Rights Reserved CR 2012

This book is general information and only provides information that should be discussed with your licensed agent in the state in which he/she is licensed and in which you reside. All Insurance policies are subject to the jurisdiction of the Insurance Departments in the State in which the Policy is sold. If you wish to contact the Author you may do so at info@thepolicypro.com .