I read an article about something that could teach all of us a great deal about auto insurance firms. A person with comprehensive insurance on their automobile had it vandalized during the night in front of their house. The auto insurance company said that because the automobile had not been broken into, and because they did not know who was responsible for the damage (!?) they would have to treat it as accidental damage. Further, because the owner was under 25 years old, there was an additional $500 charge for any accidental damage. In other words, the auto insurance firm was treating it as though the owner of the car had driven into a wall, and charged them as such.

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A few things become apparent to me when reading this. Of course, the auto insurance firm does not want to pay out any money. And they really don’t want to pay out money when they know they won’t get any of it back by increasing the premiums, and this is likely the case. Comprehensive charges are based on the value of the automobile, and the region. So we should never be shocked when they don’t want to pay us anything. However, the second thing we need to remember is that they have lots of experience in legally avoiding their obligation to reimburse their clients, and we generally have absolutely no experience in getting them to pay. When we make an insurance claim, it is usually the very first time, or at least the first time with this insurer. We need to understand that they always have sneaky ways like this one to put the claim in a special category allowing them to treat it as they please.

Car insurance companies are not the only ones to do this. I had a leak in the upstairs bathroom in a rented house some time ago. This caused a stain which needed repainting downstairs. I called the insurance company to make a claim but they asked me to produce the bill for having had the room painted initially. I asked them why. Their position was that I had to demonstrate that I was damaged financially in order for them to pay me anything, and if I had not paid anything to have the house painted initially, then I had not been damaged financially. According to their logic, the individual who originally painted the room was the one who was damaged, not me, and therefore they were under no obligation to pay me. Talk about convoluted reasoning! They must have had a good laugh when they thought that one up.

What does all of this mean? Basically, that for the most part your insurance policy is useless. Get over it. Buy insurance to protect yourself against a disaster. This means public liability insurance only, and nothing else (unless required by law) for your automobile insurance. The purpose of insurance is to foresee the worst. Take the money you save and put it into your new car fund. And learn how to compare auto insurance quotes on line.