12 Things you never knew about Auto Insurance (Part Two)

Once a valid auto insurance policy has been purchased, there are still a number of issues that can arise which all road users should be aware of…

2 – Personal Property not Covered by Auto Insurance

If personal belongings inside a vehicle are stolen or damaged, they usually won’t be covered by your auto insurance policy. However, it may be possible to claim on stolen or damaged goods on your household insurance.

Naturally, this would need to be a cost-effective exercise and the value of the items will need to exceed your deductible figure but if you own expensive items like laptop computers or portable music players, a rider on a standard home insurance policy will offer full coverage above the normal limits. It can also be beneficial to group your auto insurance and home insurance requirements together and most consumers can save up to 20% on annual costs by bundling their policies.

3 – Entitlement for Sales Tax and Registration Fees on New Vehicles

Auto insurance companies are usually required to pay sales taxes on any vehicles that are declared a total loss. The laws regarding sales tax can vary from state to state and some require the auto insurance company to pay when the loss is declared while others only expect sales tax to be paid if a replacement vehicle is purchased within a predefined time period. There are also several states that require a sales tax payment on first party claims but not on third party claims.

Drivers are advised to make a claim for sales tax reimbursement regardless of the state laws that apply in the area where they live. Sales tax is calculated on the resale value of your old vehicle and road users cannot claim against the value of a replacement model. If your auto insurance settlement figure was $15,000 and your replacement vehicle cost $25,000, you will only be able to claim on the $15,000 settlement figure.