Car insurance disclaimers are notoriously difficult to understand. When faced with endless legal terminology, it can be a challenge to decipher the disclaimer’s real meaning, and how it might affect you. However, it is vital to ensure that you thoroughly read and comprehend the fine print before committing to a car insurance company, as failure to do so can lead to very expensive misunderstandings.

First, it is important to know that many car insurance companies base their premium quotes on assumptions about you. Some of the most common assumptions found on disclaimer statements include: your driving record is clean; your vehicle is equipped with certain safety features; all drivers on the policy are at least 19 years of age and have been licensed drivers for three years; and all insured drivers live at the listed primary residence and are considered principal drivers. If these assumptions are found to be inaccurate, you can end up paying more for your car insurance than you were initially quoted.

Second, your consumer reports -including your driving record, credit history and claim filing history – also play a role in determining your car insurance rate. Many car insurance companies state in the disclaimer that if you purchase a car insurance policy online, they will order your consumer report and use it to determine your rates. When looking at this, they are looking to verify that you meet the credit standards assumed in the rate they quoted you. If they find anything that falls below what they, your rate may go up accordingly or that coverage may be denied all together. This is something you must be aware of when getting a car insurance quote. Third, each vehicle you wish to insure affects your insurance rates. The most important vehicle disclaimer to be aware of is that all coverage options and deductibles selected for the primary vehicle will automatically apply to every vehicle on the policy. If you want each car to have different types of coverage, you have to ask, or your quote may be lower than what it will actually cost to have the coverage you want.

It is important to note that all of these disclaimers apply to every driver you wish you include on your policy. Your car insurance company will make the same assumptions about these drivers that they made about you, perform the same credit checks they performed on you, and evaluate their vehicles just as they evaluated yours. Unsurprisingly, if any single driver fails to meet their criteria, your rates will go up. The best way to protect yourself is to meticulously read the entirety of your car insurance disclaimer, and if you encounter something you don’t understand, ask!