Is Your Car Insurance Risky Business?

Do you know the difference between a standard or preferred policy versus a nonstandard policy? Most people don’t.

I run into several situations with clients who are switching to us, who did not realize they had a nonstandard policy. A standard or preferred policy is for average drivers with decent driving record and credit scores. A nonstandard policy is for risky drivers, those that have a lot of speeding tickets or have a younger driver, a lot of specialty cars are also covered under nonstandard policies. Nonstandard policies are not bad, but sometimes they can have a lot of exclusions, that can put you at a disadvantage.

A lot of times when people get insurance policies they assume that all policies are the same, which is not always the case. Sometimes you will find a policy that is a good rate for the same coverage as a policy with a higher rate. However, sometimes the policy exclusions or coverage’s are overlooked and may be different.

Nonstandard car insurance accounts for about a fifth of the private passenger auto insurance market according to industry analyst Conning & Co. Because most of these policies are geared toward risky drivers or those with specialty vehicles the exclusions and what is covered may be listed.

Some common things to look out for, first the step down provisions.

If you have a risky younger driver, your policy may have full coverage for you and partial coverage if they are driving or if you lend your car out to someone other than you to use.

Another thing to look out for is depreciation, if your car is in an accident or even going for repairs they will take into account depreciation, so you will only get a percent of the full cost to replace or repair something.

A third thing to look out for is excluded liability and physical coverage if you use your car for business in any way. For example, if you decide to take a part time job delivering pizza or newspapers, this would be considered using your car for business, even if your car is your own.

Finally if you have a specialty car, they may have a cap for how much mileage you can have that they cover.

Concerned? Here are some things you can do:

• Ask your agent/CSR whether you fall into the category of nonstandard
• Explain to your agent/CSR how you plan to use the vehicle and who will drive the car
• Read your full policy to learn what is covered and what is excluded
• Ask any questions you might have to make sure you understand how the rules apply before you need to make a claim

The bottom line is to be aware of your coverages, and make sure that you are comparing apples to apples and getting the same or better coverages. We at the Chittenden Group always try to make sure our customers are fully covered and aware of what their coverages entail. If you have any questions, feel free to call or speak with Dawn or Liz, your Chittenden Customer Service Representatives.