Are you the type of person that goes to the internet and looks for “cheap car insurance in Dallas”? Have you ever truly examined the policy you receive when you purchase an “economy” or a “value” policy? These types of policies may offer you the comfort of a lower rate; hence the “liability starting at $32 per month” phrase you see driving down the street. On the other hand, some value policies could leave you open to coverage gaps at the time of a claim. Do you understand your policy? Let’s examine a few scenarios where these cheap car insurance policies cause gaps in coverage during a claim.
The first gap you could experience in your search for cheap car insurance is reduced coverage. It is true that State of Texas minimum requirement is only $30,000/$60,000 for bodily injury and $25,000 for property damage. However, what if you get into a car accident with a high end Lexus, BMW, or Mercedes? Let’s look at the math.
You Pay $40 per month for liability auto insurance. In return you cause an accident that causes $50,000 in property damage. In exchange for your $40 monthly premium, your insurance company will pay $25,000 to the other person. Unfortunately, that’s not enough money to pay for the accident you caused. In this case, where do you think everyone is going to look for the other $25,000? That’s right, you owe the other person $25,000. Welcome to bankruptsy.
Another way, hurt themselves with cheap car insurance rates, is by rejected important coverages like uninsured motorists and personal injury protection coverages. This one simply amazes me. Why would someone save $10-$15 per month and leave themselve’s totally financially exposed at the time of an accident.
Consider this, if you have a $5000 deductible on your health insurance and you get into a car wreck and you have to go to the emergency room, did you know that you may be able to use your personal injury protection coverage for that deductible? What about the time you miss from work? Is saving $10 per month worth all the financial heartaches?
In this case including many companies offer personal injury protection and uninsured motorists coverage for as little as $10 per month. If you have one of those companies that says those coverages cost $100 per month or more, RUN; no CALL us, we can get you a better deal on better coverage!
The next scenario in which you could experience coverage problems is with business use. This time, our cheap car insurance shopper purchased a personal auto insurance policy on a car that his employees routinely drive. In talking to this business owner, he admitted that he did not have all the answers. For that, he gets kudos for admitting that That does not dismiss the gaping problem for our contractor.
This general contractor is like most general contractors. However, in his case, he decided to add another vehicle to his personal policy and simply rate it for “business use”. In fact, his agent told him that he could rate it for business use and that would be okay. Would it? In order to answer this question, we have to examine the policy in question. Now that I have you thinking, consider the following scenario.
If the general contractor allows his employee to go to a job site in a person vehicle insured on personal policy, what if there are other residents near the jobsite? Unless you’ve lived under a rock, you’ve heard stories about kids getting by their parents’ SUV. What makes a residential construction job site any different. The difference will lie in the type of coverage you purchase. Since our contractor purchased the $32 cheap car insurance Dallas variety, his company is going to say, something like this:
“Although, the policy is rated for “BUSINESS USE”, by definition YOUR COVERED AUTO means use that is ‘incidental to you business of installing maintaining or repairing furnishings or equipment; or for farming or ranching…”
My third and final cheap dallas car insurance shopper scenario is more overt. Many smaller regional companies offer “limited” policies that reduce coverage through out the coverage. These auto policy types are usually geared towards the liability only, SR22, Imigrant, No-driver license crowd. At the time of a claim, these cheap policy types can be a danger to all parties involved for many reasons.
Our limited auto insurance policies remove language written in most policies that provide broader protection. A good example is that many of these policies only cover household drivers that are specifically listed on the policy. So if your relative moves to town and uses your address, you have to add them to your policy or they many not have coverage at the time of a claim.
Also, many of these insurance policies do not provide coverage for a “newly acquired automobiles”. That means, if your policy is written that way and you go to a dealership to purchase a new car, they will wait to make sure that you have the new policy in place before they let you off the lot. As a result, your 4 hours visit to the dealership just turned into a 5 hour visit.
All in all the bes thing to do is to discuss your situation with an independent agent. That way, if you need a commercial auto policy for your construction business, you can get the coverage you need. A good agent can help you acquire a policy regardless of the type of coverage you require and need. So the next time you’re shopping of insurance and that person says, I can do this for $30 per month, ask him what you’re giving up in return.
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