Vaught Wright & Bond Insurance, Inc.

Auto insurance generally is purchased and then forgotten. If you do not catch any gaps and omissions at the onset, you can be left financially devastated. This short article will tell you how some common auto insurance traps can occur, and how they may be avoided. I will avoid some of the obvious, such as purchasing the state minimum liability limits, or other absurdly low limits. If this is you, you have a lot more to worry about than the issues below.

 Are you aware that even if you are prudent enough to purchase high liability limits, your policy may not provide these same limits if someone else uses your vehicle? Many policies have what are referred to as “drop-down” limits. What this means is that if someone outside of your household, or unnamed on your policy is involved in an accident, your coverage “drops down” to the state minimum requirements . For example, an insured’s son was borrowing his vehicle while visiting San Francisco. He came over a hill and temporarily lost control of his vehicle after another car swerved into his path. Before he could recover, he hit the side of a parked vehicle, then a second vehicle, a third vehicle, and finally a fourth vehicle which was pushed into a fifth vehicle. One was a Mercedes, another a Jaguar. It will suffice to say that the $5000 of drop-down property damage was not even close to covering the $87,000+ repair bills! Be sure to ask your agent if your policy includes this provision.

Another common misconception is the idea that you do not need uninsured/underinsured motorist coverage if you carry health insurance. Even some licensed agents advocate this foolish advice. Not only is the coverage relatively innexpensive, it is essential. Why would you pay for liability coverage to insure complete strangers against bodily injury, pain and suffering, lost wages and more, and not allow yourself to be covered at the same level? If you are involved in an accident with someone with no insurance, or even innadequate coverage, you would be out of luck. You would be left paying your own way.

If you are exposed to any of the issues we discussed, be sure to contact us and get it remedied. The best thing you can do to protect yourself is to speak with an independant agent. They are not governed by one particular carrier, and will be able to place your coverage where it best fits.