un-complicating car insurance: part two

2016 12 19 Sayitsimple Parttwo

We're back for another round of un-complicating car insurance terms. If you missed part one, you can check it out here. But in the spirit of keeping it simple, let's jump right in!

Comparable value: What insurance companies use to determine how much money they will pay if you need to replace your vehicle (or vehicle part) after an accident. To avoid a payment that is too high or low, the cash value of your vehicle is decided by looking at the local or regional selling prices of the same or similar vehicles in the same condition yours was in right before the damage occurred.

Endorsement: If you add, remove, exclude or change anything on your insurance policy, it is considered an endorsement. Think of moments like purchasing a new car, adding a spouse to your policy, removing comprehensive coverage from a car that has lost value over time, changing address, etc.

Most endorsements can be requested whenever you need to make a change (no need to wait until renewal), but they may not always be allowed. Sometimes an insurer will refuse an endorsement for reasons like a late payment or if severe weather is predicted for your region.  

Exclusion: Anything written into your insurance policy that your coverage will not apply to, like a specific driver or situation. For instance, most of the time insurance policies automatically cover every driver in your household. If you know one of those drivers will absolutely never drive your car, or one has a terrible driving record that is hiking up your rate, you may request that they be excluded from your policy.

As far as situational exclusions, one example would be what insurance companies call "livery conveyance." If you were getting paid to drive a passenger or materials somewhere and got into an accident, this situation would most likely be excluded from your coverage, and you would need to pay for any damages out-of-pocket.  

Posted December 19, 2016 in insurance know-how.

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