Buying car insurance isn’t the easiest thing in the world. While your impulse would be to automatically take the least amount of insurance you can legally get, that isn’t always the smartest call. Sometimes accidents can cost a lot more than the minimum, which could leave you in a bad situation. You can be assured that insurance companies won’t pay one penny more than they have to, and will quite often go out of their way to pay less.
In fact, insurance companies are banking on the fact that you either didn’t read or didn’t understand your policy. This allows them to flat out refuse to pay for certain items even if they are supposed to. Most people who get in a car accident are just glad to be alive and want to get the whole thing over with as soon as possible. Most crash victims don’t have the stomach or patience to get into a long debate with an insurance adjuster.
But having a thorough understanding of what sort of coverage you are receiving can help you get exactly what you are supposed to when you have to file a claim. It’s much harder for an insurer to just say no when you have the paperwork right in front of you.
Bodily Injury and Liability Insurance
This insurance protects you from claims made against you which you are obligated to pay if you cause bodily injury to someone in a crash. This also covers your defense costs. Bodily Injury Liability limits usually specify two separate dollar amounts. The first amount limits payments to a single person per accident, while the second amount puts a cap on the total amount of payment for all persons injured per accident.
Collision coverage pays for the damage to your vehicle by collision with another vehicle or fixed objects like trees, signs, buildings, etc. This coverage is what gets invoked when the accident is your fault.
Comprehensive Coverage Insurance
This is your "fire and theft coverage, and covers damage to your car for anything other than a wreck, like tornados, floods, vandalism, theft, hitting a deer, etc.
If your vehicle is in the shop for more than a day for repairs resulting from an insurance claim, Many policies with this coverage will pay $15 or more per day for usually up to 30 days, or some maximum value to rent a car while you wait for repairs. Higher limits are available.
In many states, there is no deductible on windshields, because it's against state law to drive with a damaged windshield. But for the rest of your windows, you still have to pay your comprehensive deductible before they'll pay for any broken glass. You can pay more for Full Glass coverage to eliminate any deductibles for broken glass. Some companies give you full glass at no extra charge as a selling feature.
Covers medical expenses from your crash injuries and covered persons in your car, no matter who was at fault.
No-Fault, Personal Injury Protection (PIP)
In most no-fault states, PIP covers medical and rehab, work loss, funerals, and other expenses incurred by you, your family, passengers in your vehicle, and pedestrians injured by your vehicle. Not every state has this coverage, and it pays for damages regardless of who is at fault in the accident. That's why they call it no-fault.
Similar to Bodily Injury coverage. Liability covers only the damage caused by you to someone's property, car, fence, lawn, telephone pole, house, etc. When you are at fault in a wreck, this coverage is invoked when the other driver makes a claim against your insurance to repair their car.
If your car breaks down, this coverage will pay for a tow truck or roadside assistance to get your car going again. This usually pays about $50-$75.
Underinsured or Uninsured Motorist
Underinsured Motorist pays for your injuries up to the policy limit when the other driver either has no insurance, or their lame coverage can't pay for you injuries or property damage. This coverage usually includes hit and run drivers as well.
There are also ways for you to get your premiums down to more reasonable rates. This would allow you to get more coverage for less money, as opposed to paying less money for less coverage.
AIR BAGS And AUTOMATIC SEAT BELTS
Some companies might discount up to 30% off Personal Injury Protection and Medical Payments coverage if the driver and passenger sides have air bags and automatic seat belts. This discount is given because the insurance company knows you'll be belted in every time, hence your risk of injury in a crash is much less than someone else who is not belted in.
Some companies give discounts off the Comprehensive premium when an active anti-theft device is present. This usually means a burglar alarm. Some companies may discount more if the alarm arms itself automatically when you turn off the vehicle. This 5% discount usually does not add up to much, but combined with other discounts listed here, will certainly make a dent.
If you have Anti-lock brakes(ABS), you may 5% or more off Bodily Injury and Property Damage coverage.
Some companies give drivers under age 25 who complete a state approved drivers education class up to 10% off on Bodily Injury, Property Damage, Medical Payments, Personal Injury Protection and Collision coverage.
Sometimes if you're a safe driver, usually 3 years with no points, you qualify for additional savings on different types of coverage. The insurance company will let you know. Usually on your insurance bill you'll see something that says "Your premium reflects the maximum discount allowed for safe driver".
MULTI-CAR or HOME & CAR
If you insure 2 or more vehicles on the same policy some companies may give you a discount. They may be equally generous if you have your home and both cars insured with them as well.
Some insurance companies classify certain cars as "Safe Cars", meaning there's statistical data to suggest that there's less risk of injury by way of design, air bags ABS, etc. Find out if your car qualifies for this discount.
The most important thing to remember is that insurance companies very rarely just tell you this information. You have to ask for it. And if you have to file a claim, make sure that you have done your homework on your policy and know exactly what your coverage is supposed to provide for you.
If your insurance company is denying your claims for reasons that you think are inadequate, contact our offices for a free legal consultation today.