Although it may not seem like it, an insurance policy is a binding contract for 6 months or a year, depending on the term, so in addition to paying the premium, you need to follow their rules. There are a few ways that you could be spelling disaster for your auto policy that you may not be aware of.
Avoiding Adding Drivers to Policy
It sure does seem like we are overpaying for car insurance as it is, so we do not want to pay more when we do not have to, but avoid temptation to not disclose when there are additional drivers that are using your automobile. Teen drivers seem to quadruple premium amounts, so you may be thinking about hiding from your policy, but insurers can access databases with newly licensed drivers, not to mention if they were to be in an accident, it could spell disaster for your uninsured driver, not to mention yourself as it is in your name. If your live-in girlfriend is even driving your car, you should notify.
Still Carry Insurance on Car Sold to Child
If you think you are being nice buy selling your old car to your child who is in need of a ride, make sure you notify the insurance company to change out of your name and into theirs. As their name will need to be on title for ownership, same goes for insurance. The claim could face problems, or at worst, be submitted for insurance fraud. Make sure the state information is updated as well as that could lead to trouble with your policy, as different states have different rules, for example Michigan being a no-fault state compared to the majority that are not.
Using for Delivery
Whether you are delivering pizzas or driving for Uber, an increased amount of time on the road to lead to greater risk of potential accidents, so the insurance company will need to know to avoid any complications if they find out before coming out of your mouth. Depending on the frequency, you may need to change to a business-use policy.
Drove New Car off the Lot without Insurance
If you are too excited about your new purchase or leased vehicle and have not gotten around to contacting your insurance company, driving an uninsured car is a major no-no. Fortunately every new automobile transaction I have gone through, the dealer has reminded, but the off-chance that it is missed, it is your responsibility to ensure there is proper coverage.
Having proper and adequate coverage is essential to protecting one of your most valuable and useful assets. Don’t forget that owning your vehicle allows you borrow against it if needed. These are called title loans. Title loans offer affordable rates for those that find themselves in a pinch for needed cash.