Understanding Consequential Damages In Your Insurance Policy
Most people don’t understand consequential damages until they need to file a claim. Unfortunately, many people learn what is and isn’t covered in their insurance policy the hard way. Daniel Fabulic Insurance Agency will discuss consequential damages and how your insurance policy can cover them.
Understanding the types of damages that can be covered in your insurance policy is essential. One type of damage that is often misunderstood is consequential damages. These are not direct results of the accident or incident but are caused by the actions of the insured party.
Avoidable Policy Violators
Consequential damages are often referred to as “avoidable policy violators.” It is because they are damages that could have been avoided if the insured party had followed the terms of their insurance policy. For example, if your car is totaled in an accident, you may be able to receive a new vehicle from your insurance company. However, your insurance company is not liable to pay for a new car if you do not have collision coverage. In this case, the damage was avoidable, but you did not have the proper coverage.
There are many other examples of consequential damages that can be avoided by following the terms of your insurance policy. If you were driving under the influence of alcohol when your accident occurred, your insurance company would not pay for the damages. Your insurer won’t pay the damages if you are in a hit-and-run accident.
Another example is if your car is totaled in an accident, you would be able to collect the value of your vehicle from your insurance company. However, there would be consequential damages if you missed work and incurred medical bills due to the accident.
Most insurance policies will cover direct and consequential damages, but there may be limits on how much they will pay for each type. It’s essential to understand the terms of your insurance policy to avoid any avoidable policy violators.
Avoiding Consequential Damages
Few things can help avoid paying for consequential damages. First, make sure that you always have adequate insurance coverage. Second, be sure to follow all of the rules and regulations of your policy. And finally, if you do have an accident, be sure to document everything so that you can prove your damages. These simple tips can help you avoid paying for consequential damages out of your pocket.
So, consequential damages can be economic losses such as loss of profits or non-economic losses such as pain and suffering. In many cases, they can be much greater than the actual damage caused by the accident. Policyholders must understand their liability coverage and ensure they have adequate insurance to protect themselves from these claims. At Daniel Fabulic Insurance Agency, serving Frankfort, KY, we can help you find the right policy to cover your needs in case of an unfortunate event. Contact us today to get started.