Life is complicated, insurance doesn't have to be.
Read time: 3.5 minutes
Spoiler alert: This article is not just a
rant about how the ongoing chip shortage and global supply chain
problems are affecting your insurance. We also included some
practical tips because there’s enough stress in the world right now.
1. Shortages in auto parts may mean a longer repair process
Between the chip shortage and the problems with the
global supply chain, replacement parts for your vehicle may be harder
to find. During the pandemic some manufacturers had to halt production
of parts, which has created a shortage.
So, in the event your vehicle is damaged in an accident or
needs something replaced, the repair time may be significantly
longer. By extension, if your car is damaged in a covered loss, the
overall process may take longer.
This is one of many reasons why it’s important to stay up to
date with routine maintenance and to get your vehicle in for service
quickly when an issue arises. And, as always, report your claim as
soon as possible and provide all the requested documentation.
Read more: Insurance
Claim: What It Is, How To Start and What Happens Next
2. Your vehicle may be totaled from less damage than usual
The significant increase in the cost to repair a vehicle, due
to the low supply of replacement parts and increased labor rates
right now, makes it easier for damages to exceed the value of a
vehicle. This means that more vehicles than you would expect are
being considered “totaled” even though the damages may not be severe.
This may leave you looking for a replacement or rental
vehicle, which is no easy feat right now either.
Read more: You
Just Got Into a Car Accident. Now What?
3. Finding a rental car is difficult
If your vehicle does end up needing repairs, your auto
insurance may cover a rental car to use while your car is being
fixed. However, rental cars are also scarce since less cars are
being produced. So, if you find yourself in a position of needing a
rental vehicle, be sure to reach out to rental companies as soon as
you can and be open to the options available.
Read more: Car
Insurance and Rental Cars: Everything You Need to Know
So, what can you do?
Besides being vigilant in avoiding car accidents and keeping
up with routine maintenance, there are a few things to consider.
One, consider increasing your Rental Car coverage to
the maximum amount possible.
may help you squeeze more time out of your rental vehicle, which is
helpful since repairs are taking longer.
Most people have a limit of around $30 a day with a maximum
amount of $900. You can increase that to $50 a day with a maximum
amount of $1,500 and choose the smallest/most affordable rental car
available to stretch the amount of time you have that vehicle.
Two, consider adding Purchase Price Guarantee coverage.
If you’re looking at replacing a vehicle, you will quickly
learn that prices for both new and used vehicles are high. Purchase
Price Guarantee coverage may be good to consider especially if you
end up purchasing a vehicle at these higher prices. It protects your
investment and ensures that you’ll be compensated the higher amount
you paid if your vehicle is totaled within two years of the purchase date.
(Please note: This coverage requires your vehicle to
have comprehensive and/or collision coverage and that the
policyholder is the original titled owner of the vehicle.)
Even though we don’t know when, remember these shortages and
supply chain issues will pass. In the meantime, stay safe and follow
us on Facebook for more helpful articles, tips and fun!
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may apply. Premium will be based on benefits chosen and
policy rates available at time of application.
Disclaimer: This article is not expert advice. The
analysis of coverage is in general terms and is superseded
in all respects by the Insuring Agreements, Endorsements,
Exclusions, Terms and Conditions of the Policy. Some of the
coverage mentioned in this material may not be applicable in
all states or may have to be modified to conform to
applicable state law. Some coverages may have been
eliminated or modified since the publishing of this
material. Discounts may not be available in all states.
Limitations and conditions may apply. Premiums will be based on
benefits chosen. Please check with your local Independent
Auto-Owners Insurance Agent for details."