Car Insurance Problems

Driving a truck for a living, I don't spend much time thinking about insurance for my car. Lately, though, I've been talking to some of my friends, and the wife, about it. Maybe it makes me sound old, but I remember when auto insurance wasn't mandatory. Now that we all have to have it, there are some little "details" I'd like to discuss.

Detail One:

A friend of mine thought his insurance was paid up, after all, he'd been making the payments every month for his car and his wife's car. When his "tags" came due in April, he went to the DMV and was given the new tags. The next month, he was pulled over and told his registration had been pulled by the state. The car was impounded. My friend went to court, explained everything to the judge and proved that his car insurance had never lapsed. He was found "Not Guilty" in the morning and his car was sold to someone else that afternoon. How's that for unfair? The problem turned out to be that his insurance company had applied both payments to his wife's car and cancelled his coverage without ever telling him. The lesson here is to be very careful which insurance company you choose. Having a local agent is always better than just sending payments to someone you don't know.

Detail Two:

A couple I know hadn't had a car for a couple of years and needed to get insurance when they finally bought a car. They called Geico and were assured that they would be covered. The husband had gotten a ticket in his work vehicle and told the Geico rep. Since it was a work vehicle, Geico assured him it wouldn't be a problem. They mailed the check and received their insurance cards. Three weeks later they got a small check in the mail with a cancellation notice! It seems the on-the-job ticket made them ineligible for Geico insurance. But they had been driving for more than a week, uninsured. The lesson here is not to believe the television ads. Shopping for car insurance should be like shopping for new shoes. One size doesn't fit all! Make sure you investigate before buying.

Detail Three:

Another friend of mine just bought a new car. He arranged for the insurance through his own agent, unaware that he was supposed to notify the lending company. Several months went by, during which he received strange phone calls. Most were recorded messages, telling him he was uninsured and asking that he call an "800" number immediately. Since the recording didn't use his name, he assumed it was a wrong number and ignored the calls. His car payment bill came and was twice the size it had been the month before! Outraged, he called the company and demanded to know why. The loan agent told him that his new car was uninsured and they were charging him for their own insurance. It didn't take long for him to contact his insurance agent and settle the problem. This lesson is "Make sure you tell your lender about having insurance!"

Detail Four:

The wife and I did everything right and used an agent we knew several years ago when we lived in California. We made the payments right on time and thought everything was fine until we heard on the news that the company we were with had pulled out due to a new law. Our agent had continued to collect our money every month, never mentioned that the company it was supposed to go to didn't even do business in Calif. anymore. The wife called and chewed him out, demanding the money we'd been paying be returned. He didn't seem to think he'd done anything wrong and refused to repay the money. Our lawyer convinced him otherwise and he did give us a refund, eventually. The only lesson here is that stuff happens that you can't protect against.

In conclusion, automobile insurance is a "necessary evil" that we're all stuck with these days. Lots of things can go wrong, but if you choose your company and coverage carefully, and use an agent you know, you can minimize disasters if not preventing them altogether.