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What vehicle insurers don’t tell the customer

What comes to mind when you envision a vehicle crash? Vehicle damage and personal injury likely occupy the first two thought bubbles. What about the money you have to pay after your insurance company pays its part? What about your medical bills? Will you be fully reimbursed?

And a big question: was your claim denied? There are answers to these questions and others, but insurance companies are known to be rather tight-lipped. 

It’s time to open the vault on some of their secrets. What happens if you lend the vehicle to a friend and get into an accident? What affects premium pricing, how do you lower your policy’s cost, and what to do if your claim is denied?

Is your car insurance tied to the driver or the vehicle?

Vehicle insurance is often tied to the vehicle, not the driver. This means that if you allowed a friend or relative to drive your car and they got in an accident, the insurance company should still chip in to repair the damages. Keep in mind that the reaches of your coverage differ depending on which company and policy you choose. You may also choose to exclude drivers on your policy that you don’t trust driving your vehicle.

What factors affect the cost of your premium, and how can it be lowered?

The answer is many factors. They include: 

  • Your car’s total value
  • It’s age and safety rating
  • The type of vehicle
  • Your driving record
  • Annual miles driven
  • Where you live
  • Your age (young and old drivers usually pay more)
  • Whether the model of your vehicle is standard or premium

On the bright side, California is one state of three (Massachusetts and Hawaii) that doesn’t allow a person’s credit score to affect their vehicle insurance cost.

You can lower the cost of your car insurance over time by practicing the following habits:

  • Driving safely
  • Always paying your bill on time
  • Asking your insurance company about discounts (or taking advantage of their discounts when you edit your policy online)
  • Improving your credit report (ask for a new quote once your score has improved)
  • Allowing a high deductible on your policy
  • Compare multiple options: When it comes to insurance, the first option is usually not the best option.
  • Choose your vehicle wisely: That flashy car might look great, but your insurance price may not.

Can I obtain a copy of my vehicle insurance report?

Yes, you can. The Fair Credit Reporting Act entitles you to one free report once every 12 months. This access allows you to view and dispute any false or incomplete information on your report if you choose. Understand that any claim you make will follow you for five to seven years. LexisNexis and Verisk are the two outside agencies that house these insurance reports.

What if the insurance company denies your accident and personal injury claim?

There are three steps to take once you’re facing a claim denial.

  1. Secure the help of an attorney to determine whether you may have a bad faith claim against the insurer for refusal to provide insurance coverage to you under the policy. Should you have a bad faith claim, you can sue your insurer to recover not only what is owed to you under the insurance contract but also attorney’s fees and emotional distress damages.
  2. File an appeal
  3. Contact the insurer

If you feel your claim was denied in bad faith, an attorney’s expertise can become invaluable. An attorney who has expertise in insurance law; i.e.,

CPCU (Chartered Property & Casualty Underwriter, understands the devious tactics of insurance companies and how to counter them.