Six Auto Insurance Potholes (4-6)

Are you in good hands with Allstate and is State Farm is there for you? Most auto insurance policies leave plenty of room to deny coverage and stick you with the bill. That's by design, of course.

If auto insurers to offer blanket coverage for every blunder made behind the wheel, their business would quickly swerve off the road and into a pothole. "A policy that covers anything that is imaginable without any exclusions would be impossible to price and equally difficult to afford", according to the Insurance Information Institute.

Instead, auto insurers offer us a contract that assumes most of the risk in exchange for a commitment on our part to act responsibly. "For some of these exposures, there is some responsibility placed on the individual, and that's where these exclusions come in," says the Insurance Information Institute.

The following information lists six major potholes that may exist in your auto policy. Because policies vary widely, be sure to check with your agent if you have questions about your coverage.

Auto Insurance companies have written "Potholes" into their policys that are hard to find. There could be "potholes" in your insurance coverage. Be aware that most policy form and endorsements are only mailed to you in print on the original policy when you signed up with the insurance company. The Pothole Crusader wants you to know the details.

When you get your new policy declarations every year or six months the details are not listed, only references to a policy form or endorsement, no details!!!

It is very important for you to understand what coverages are excluded or included. Its all in the fine print on the original policy and endorsements you could have gotten years ago. If you never took the time to read what coverage is excluded or included in the fine print you will be in for a big surprise.

Potential Auto Insurance Potholes 4-6

(4) If you lease or carry an auto loan and your vehicle is deemed unsalvageable or "totaled" following an accident, your auto insurance has you covered --  well almost. When a total loss is claimed, the settlement folks typically calculate your payout based on the market value of the vehicle at the time of the crash.

Because lease holders and borrowers tend to be "upside-down" for much of the term of their auto lease or loan, meaning they owe more than the vehicle is worth, that can leave them on the hook for the gap, or the difference between the market value and the remaining balance they owe.

That gap can often be several thousand dollars on a totaled car. Most dealerships and many auto insurance companies offer loan-lease gap coverage against this costly scenario. "When you are looking to purchase or lease a vehicle, you really need to keep that in mind," according to the Insurance Information Institute. "Normally, it is not a separate policy; it can be added onto the auto policy itself."

(5) The great outdoors offers plenty of perils to vehicles. Bad weather can topple trees and hurl damaging debris. Wild animals can take up residence, chew through wiring and make nests in the upholstery. You might even suffer major damage if you hit a bear or deer. But if your policy does not include comprehensive coverage, which protects your vehicle from damage not caused by another vehicle or done by striking a stationary object such as a telephone pole, you may be completely exposed, as in uncovered, for nature-related damages .

While comprehensive coverage is usually required if you have an auto loan or lease, it's entirely optional otherwise. The Insurance Information Institute notes another advantage of comprehensive coverage: "Acts of nature are typically covered, including flood damage," she says. "While your homeowners policy specifically excludes flood, comprehensive typically covers it."

(6) As holiday shoppers often find out the hard way, just because you stow your booty in the back seat doesn't mean it's covered by your auto insurance if thieves make off with the packages. In fact, most auto policies exclude from theft coverage items that aren't part of the vehicle itself.

"Normally, if a component is built in and came with the vehicle, it's covered," says the Insurance Information Institute. "But if you have your own portable GPS, iPad, CDs or other personal items, those are going to be excluded under your auto policy for theft." All may not be lost if your vehicle is broken into, however. "You may have coverage from your homeowners insurance for items stolen from your car," the Insurance Information Institute says.

Auto Insurance Potholes 1-3

Filing Pothole Claims  (A how To Guide From The Pothole Crusader.) Remember this is not legal advice but only Pothole Crusader advice. If your not sure how to proceed get legal advice from a professional.

Vehicle damage claim

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