People who claim their insurance usually wonder where the money goes especially in situations which tell the claimant that the amount that they can claim is more than the actual cost. For example, the quote says that the company will pay for the $10,000 dollars for the damages that your car might incur in an accident. After some time, you did get into an accident. The damage to your car is about $7,000. Companies will pay the $7,000 but the balance of $3,000 will not be given to you.
The reason for this is that the $10,000 agreed upon is only the maximum amount that the company will pay. This means that they will not necessarily be giving out the $10,000 when you get into an accident (or whatever the agreement is) rather it would mean that the company will pay that amount as the maximum. This is important to remember especially if the accident you are involved in goes over the limit.
What happens when the cost of the repairs is more than the agreement between the company and the person? For example the agreement between you and the company is worth a maximum of $5,000. This means that the company is not liable for the excess that you may incur, in this case the amount of the excess of $5,000. To make the example more concrete, if the damage you get is $7,000 then the company will only pay for $5,000 and you will need to pay for the $2,000 by yourself.
This is the reason why you need to pay close attention to the details and specifics of agreement you and the company get into. You need to know all the specifics in order for you to be protected and not caught off guard in case something unexpected happens. Before getting into an agreement you need to first understand the terms and conditions of the agreements you go into with insurance companies.
People who get insurance usually become too secured that they think that they will have no financial liabilities once because a company will back them up just in case. Having insurance does not mean that the company will assist you unconditionally. Holding a piece of paper does not automatically give you protection. You also need to be aware of your claims and the rights that you possess as a consumer in order to properly claim those rights and be justly compensated.
