How well do you understand auto insurance?

A company conducted an auto insurance quiz with 500 consumers. Their score – 34%.

It’s an amazingly low score considering people buy car insurance over their entire lives. The study did not reveal age information but if drivers are over 30 there is little reason to not understand your policy more. The internet today offers anyone the ability to research anything.

Here are a sample of the questions to help you determine how well you know your insurance.

Question 1:
What does auto liability insurance pay for?
Question 2:
What does collision coverage pay for?
Question 3:
What does comprehensive coverage pay for?
Question 4:
What does medical coverage pay for?
Question 5:
What does uninsured motorist coverage pay for?
Question 6:
If your car it totaled, what does gap insurance pay for?
Question 7:
If a friend has liability limits of 25/50/40, what does that mean?
Question 8:
If your friend borrows your car and wrecks it whose insurance pays?

Only 2% of quiz respondents understood what comprehensive coverage is. If you are unsure about the answers you can visit some of the pages on our site, contact us or do some online research. Never rely on someone else to know or explain your own coverage to you. Insurance is important, especially car insurance. It is always best to know what you are buying and how that product covers/ protects you.

The High Cost of Fraud

Some years ago I was traveling on a fairly busy two lane road in Tempe. I pay good attention as I drive but when I see a green light in front of me at no point do I expect the car ahead to slam on their brakes. But that’s exactly what happened. The vehicle ahead, loaded with men, slammed on their brakes. I could see them looking back at me expecting to get hit. The light was green.

This is a common type of fraud, where a vehicle causes an accident and the passengers all hope to hit some small jackpot against the insurance company by claiming personal injury. And no doubt they probably have a law office ready to handle their claim.

Fortunately for me, I hit the brakes quickly and barely stopped in time. Our bumpers must have been an inch apart. Once they realized I had avoided a collision, they hit the gas and sped off.

The truck behind me was not so aware as he slammed into me viciously. And to make matters worse, the pickup driver had no insurance.

TAKE IT FROM ME – DO NOT TAIL GATE!!!! At some point in your life you will end up following a scam artist hoping to get rear ended.

Edmunds.com estimates that fraud adds $200 – $300 per year to your insurance premium. Edmunds advises being aware of another type of staged claim – the 4 way stop accident. Your vehicle arrives at an intersection at the same time as another. The other driver, seemingly courteous, waves you ahead. So you proceed only to find the other driver flooring the gas pedal to cause you to hit them.

Insurance companies are no stranger to fake injury claims. But disproving them is difficult. So it’s mostly up to you and me to be diligent in our driving, be careful, don’t speed and do not at any time tail gate.

Recently I was at a stop sign awaiting for the traffic to clear enough for me to pull into the closest lane. A driver behind me must have been in some sort of hurry as she laid on her car horn beeping at me to merge into the busy traffic. Sorry, but I am not risking my life, my vehicle and someone’s else life/vehicle for a driver who is late to get wherever they are hurrying to.

As all safe drivers should do, I waited until it was safe to merge into traffic. The girl behind me quickly followed me into traffic and cut around several vehicles. Imagine my surprise (being sarcastic) when I arrived at the next red light and this rushed driver was sitting there. Hurrying rarely works but puts everyone around at risk.