6/9/2011 12:02 PM ET|
How to wreck an auto insurance claim
Want to undermine your chances of getting a payout from your car insurance company? These 6 foolish moves can make sure that happens.
When you purchase car insurance, you hope your claims will be paid.
But in many situations, your insurer can deny your claim because of things you've done. Negligence, criminal activity or simple forgetfulness all can cost you.
Here are six things you may do that can result in your insurance company refusing to foot the bill for your claim:
1. Filing a fraudulent claim
Tempted to pretend that old jalopy has been stolen so you can collect the car insurance money? Think it's harmless to exaggerate the extent of your damages in order to collect a few more dollars in your insurance payout?
If you file a fraudulent or exaggerated claim and your auto insurance company finds out, your claim is sure to be rejected. Worse, you could be in trouble with the law.
"Committing insurance fraud is a felony," says Amy Bach, executive director of the consumer advocacy group United Policyholders, which concentrates on insurance matters. "Knowingly committing a fraud is always grounds for denial of a claim."
2. Filing a claim for coverage you don't have
Often drivers don't understand their coverage, which can lead them to try to make claims for coverage they don't have.
For example, did you hit a deer? You don't have coverage unless you bought comprehensive insurance.
Or perhaps you hit a slick patch in the road and slammed into a corner mailbox. Any damage to your car will not be covered unless you purchased collision insurance.
3. Expecting coverage for a loss excluded in your policy
You will not be covered for any loss that is excluded in your policy.
For example, in some cases, a car insurance policy may not cover you for business-related use of your vehicle. So a claim for a fender-bender that occurred while making a work delivery could be denied.
4. Increasing a car's value without telling the insurer
When you increase the value of your car, you may not be covered for the full extent of damages if you haven't notified your insurer of the upgrades.
"If you do any heavy customization or special modifications to the wheels or body of your car, it's important to notify your agent immediately," says Rick Ward, director of auto claims for MetLife Auto and Home.
You may be charged a higher premium to reflect the increased value of your vehicle. If you haven't notified your car insurance company of improvements by the time you file a claim for damages, you will likely receive compensation only for your vehicle's original value.
5. Letting your policy lapse
Even if you've faithfully paid your auto insurance premiums for decades, one missed payment could jeopardize your coverage.
In this case, your insurer may suspend your auto insurance coverage until you are up to date on payments. The results could be disastrous if you're involved in an accident before your insurer has reinstated your policy.
"If you have a lapse in your policy, you'll have no coverage and will be forced to pay for the full extent of any damages yourself," says Ward.
6. Driving under the influence
Insurance companies are generally forgiving of stupidity. For instance, if you leave the keys in your car and it is stolen, most car insurance companies will still pay the claim, even though the theft was partially your fault.
Making poor choices like driving drunk or under the influence of drugs could cost you, however. In many states, insurers are allowed to deny a health insurance claim that occurs when you are involved in an accident and are legally intoxicated.
"Wherever you're driving, you need to understand the statutes and state laws that apply, so that you're aware of the consequences of your actions," Ward says.
This article was reported by Kathryn Hawkins for Insurance.com.
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Insurance Companies' rules, and regulations have become just as complicated as the stupid laws our Government, State Government, and Local Governments put into the books!! It is we the people who are always getting the "snow" jobs from ALL of these outfits, and MADE TO PAY THROUGH THE NOSE!!! Yet, if you don't check out everything you are putting your "John Hancock" on the line for, when the time comes you might find out YOU ARE NOT COVERED!
I remember the days when you went to get auto insurance, and you told them what you wanted, liability, comprehensive, or collision, or all of them, which in those days was called "full coverage"! They added it up, and it was a reasonable figure then. Now days they charge the hell out of you, and since the "LAW" made it "MANDATORY" to have auto insurance, they are having a field day with their pricing, because they know you HAVE TO HAVE IT!!! The ONLY way you can get out of paying their prices is to "self insure yourself" through the state you live in, but because the state wants you to put such a large amount of cash in an account with them, ONLY RICH PEOPLE CAN AFFORD TO DO IT!!
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