Auto insurance protects you from paying the full cost for vehicle repairs and medical expenses due to a collision. Some factors that affect the premiums you pay for this protection, include your:
- Marital status
- Credit history
- Car's make and model
- City and neighborhood
Types of Auto Insurance
Every state requires drivers to have auto insurance. If you don't have insurance, you must have financial responsibility waivers. These waivers ensure that you can pay for property damages or medical expenses. There are several components that can make up your insurance policy:
- Liability coverage protects you if you are at fault for a collision. It pays for medical expenses and vehicle damage for the other driver and passengers.
- Uninsured motorist coverage pays for damages to your car and medical expenses if an uninsured driver hits your car.
- Collision coverage pays to repair your vehicle, if you were at fault for the damage.
- Underinsured motorist coverage pays damages for your car if someone hits it, but their insurance can't pay for your car damages.
- Comprehensive coverage pays for damage to your car due to theft, fire, or falling objects.
Auto insurance requirements vary from state to state. Most states require drivers to have liability coverage. You may choose to opt out of certain types of coverage, depending on your budget and car’s age. Check with your state insurance regulator to learn more about its requirements.
Be sure to read the declarations page of your auto insurance policy. This page is a summary of your policy. It includes:
- The length of coverage
- Annual premium
- The largest amount your insurance company will pay out for each type of claim, and
- How your insurance company splits your premium payment between each part of your coverage
When you borrow money to buy a car or truck, the lender can take your vehicle back if you miss a payment or in some other way violate the contract. If have missed payments, your lender:
- can repossess with cause without advance notice
- can insist you pay off the entire loan balance in order to get the repossessed vehicle back
- can sell the vehicle at auction
- might be able to sue you for the difference between the vehicle's auction price and what you owe (depends on the state you live in)
- cannot break into your home or physically threaten someone while taking the vehicle
If you know you're going to be late with a payment, talk to the lender to try to work things out. If you and the lender reach an agreement, be sure you get the agreement in writing. Contact your state or local consumer protection office to find out whether your state gives you any additional rights. The Federal Trade Commission offers more detailed information about vehicle repossessions.
If you have a complaint about your car, file it directly with the dealer, lender, or manufacturer. If you don't get results, you can contact a state or federal government agency. If your complaint is about:
Some agencies will investigate your complaint. Others accept complaints so that they can file a case against the company in the future.
A car is called a "lemon" when it's determined that the vehicle is defective beyond repair. Most states have some form of a lemon law to protect car buyers. These laws tend to only apply to new cars. Check with your state's consumer protection office to see if they also cover used cars. Each state has its own requirements, but overall the ability for a car to qualify as a lemon depends on a few things:
- Number of miles driven -- The defects had to happen within a certain number of months or miles driven.
- Major defects -- Defects have to involve the actual operation of the car. This includes the initiation, brakes, engine, transmission, or other major parts of the car.
- Reasonable repair attempts -- You have to give mechanics multiple chances to repair the problems.
- Number of days in the shop -- Your car has to have been in the mechanic's shop for a significant number of days, (generally 30 days or more) within a year.
To get your problem resolved, first contact the car manufacturer. Send the manufacturer a complaint letter by certified mail detailing the problems. Include copies of work orders and invoices, and your request for a refund or other solution. If the manufacturer doesn’t help, you still may be able to resolve the problem. Many car contracts have mandatory arbitration clauses to settle disputes, so that may be your next step. Get the rules specific to where you live from your state attorney general or consumer protection office.
Also, contact the Better Business Bureau (BBB) AUTO LINE. This lemon law complaint program covers car warranty issues against participating manufacturers.
Recalls happen when a large quantity of a product isn't safe for use. A government agency or the manufacturer will then alert the public.
A recall is an action taken by a manufacturer, or the government, to protect the public from products that may cause illness or injuries. They will recommend that people take a specific action.
Some recalls ban the sale of an item and instruct you to throw away the product. Other recalls ask you to return the item for replacement or repair. The seller will replace the defective part, to reduce the danger of using the product. Commonly recalled products include:
- child safety seats
Before you buy a product, find out if the manufacturer has recalled it. Be especially careful if you are buying a product for a child. Visit these websites to find the latest on safety recalls:
- Recalls.gov lists recalls from federal agencies. You can sign up for free email notifications on recalls.
- Safercar.gov publishes safety information on vehicles and equipment such as children's car seats.
- FSIS.USDA.gov lists meat, sausage, poultry, and processed egg product recalls
- FDA.gov lists recalls that involve food (non-meat products; fruits; vegetables; seafood; shelled eggs; infant formulas), medicines, medical devices, cosmetics, biologics, radiation emitting products, veterinary drugs, and pet food.
- Foodsafety.gov publishes notices of food recalls and alerts from both the Food and Drug Administration (FDA) and the U.S. Department of Agriculture (USDA).
Reporting Safety Concerns
The government accepts complaints about unsafe and mislabeled products.
- FoodSafety.gov directs you to the correct agency to report unsafe food products. This includes pet food and food sold in restaurants.
- The National Highway Traffic Safety Administration accepts complaints about defective vehicles and car accessories.
- SaferProducts.gov allows you to report incidents and safety concerns with consumer products, You can also read about incidents reported by other people.
In order to avoid auto repair rip-offs, be prepared. Knowing how your vehicle works and how to identify common car problems is a good start. It is also important to know how to select a good mechanic, the kinds of questions to ask, and your consumer rights.
For information on how to choose a repair shop or technician:
- Auto Repair Basics helps you choose the right repair shop or technician, understand repair charges, practice preventative maintenance, and more.
- The Motorist Assurance Program is a nonprofit that gives its seal of approval to qualified repair shops.
If you would like to file a complaint against a mechanic or repair shop, contact your state consumer protection office, your local Better Business Bureau (BBB), or your state motor vehicle agency.
A product warranty is the promise that a product will work. Federal law requires that warranties be available for you to read before you buy. A standard warranty is part of the item you purchased. There is no extra cost for this protection from the company. There are three main types of warranties:
- Written warranties are printed and come along with the item you purchased. To make a claim against a warranty, the seller or manufacturer may require you to follow the care and maintenance instructions.
- Spoken warranties are spoken by an employee at a retailer or service provider, Spoken warranties are often for services, like free repairs.
- Implied warranties promise that the item you purchased will do what it is supposed to do.
A product is covered under implied warranty laws in your state, unless it was marked "as is" when you purchased it.
Service contracts or “extended warranties” extend the guarantee that a product will work. You can buy a service contract, if you pay extra. Sellers offer these service contracts at the time or after your purchase. Extended warranties are common when you buy a car, electronics, or household appliances. Third party firms (not the manufacturer or the seller) may also try to sell you an extended warranty. Some extended warranties duplicate the warranty coverage that you get automatically from a manufacturer or seller.
Problems with Warranties
File a complaint about a warranty with the retailer. If the retailer can't help, contact the manufacturer. If the manufacturer can't help, report it to your local consumer protection agency.
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Last Updated: August 26, 2019