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Using Auto Insurance Quotes to Avoid "Junk" Policies

Although it is common knowledge that cheaper is not always better, it is possible to pay regular or even higher prices for something that has little or no value. This seems to be happening more and more in the insurance industry. Because most states require drivers to purchase insurance, insurers have become increasingly competitive and use a variety of tactics to attract your business. States across the country are beginning to crack down on insurers who use questionable methods to get you to buy a policy that may be worthless or financially ruinous.

Meeting State Minimum Requirements

When you get auto insurance quotes for the purpose of comparing options from several insurers, you expect the reputable insurers are giving you quotes that meet your state's requirements. You are not legally required to purchase more than is mandated by law. However, do you know what a limited policy actually covers? More importantly, do you know who it covers?

Common Insurer Practices

Many insurance companies do not go out of their way to tell consumers more than they are legally required to which may seem a bit odd. You would think that insurers want to sell drivers more coverage options. However, insurers know that in order to get some drivers to buy a policy, they need to price policies as low as possible. One way they are able to do that is by reducing what and who a policy covers.

Texas: A Case Study

In 2013, the governor of Texas signed a bill that requires insurers to disclose specific information to drivers who buy policies. They must inform drivers about:

Risks of Single-Driver Policies

Avoid these disreputable practices by using auto insurance quotes to better understand what insurers are offering. Always ask questions and get clarification in writing before you buy a policy. Know that if auto insurance quotes are for a single driver, anyone else who drives your car is driving illegally since they are not included on your policy. If they cause an accident, they will be deemed an uninsured motorist and be held financially accountable for damages. More than likely, you will be accountable as well for not letting them know about your "junk" policy.

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