The Importance of Uninsured and Underinsured Driver Coverage

Posted on Feb 12th, 05:04 am, under Are You Covered?

Have you ever asked yourself if you've got sufficient coverage already? You may be in need of auto insurance against uninsured and underinsured drivers. If you think they're pretty much the same thing, think again; these are two completely different forms of insurance. Here are the basics that you'll need to know in order to avoid liability on the road.

Uninsured drivers are those motorists who have, as the term implies, absolutely no auto insurance of any kind. If you are unfortunate enough to get into an accident with one of these individuals, your situation should technically be resolved in court. In reality, however, it's highly unlikely that you'll get any compensation from them, since medical and vehicle damage costs in the United States are extremely high. This is why you need an insurance policy that protects you against uninsured drivers. Fortunately, most states require this form of coverage as a mandatory add-on to any insurance policy. If your state doesn't require it, consider adding uninsured drivers coverage (UM) to your policy.

Underinsured driver coverage (UIM), on the other hand, protects you against at-fault motorists that have some auto insurance, but not enough to pay for damages in an accident. This issue is steadily becoming more important, since the minimum basic liability insurance that many states require still isn't enough to cover the damages of most collisions and accidents. Once more, this is due to the ever-increasing costs of health care and vehicle repair in the country. Therefore, in addition to UM coverage, you should also look into getting UIM as well.

Aside from the benefits listed above, UIM also helps to cover lost wages and medical costs if you get into an accident through the fault of another motorist. It really helps "fill in the gap" by compensating you for costs that aren't covered by the at-fault driver's auto insurance or your own health insurance.

But what if YOU are that underinsured motorist? How will you know? Legally defined, an individual is considered underinsured if he or she does not carry liability coverage for bodily injury and property damage. The laws regarding underinsured motorist coverage vary depending on your state. For example, in Florida, UM and UIM insurance is required. In other states, such as Texas, filing an uninsured motorist claim will increase your insurance rates. Because of all the different variables and laws, the best way to find out your personal insurance status is to ask your auto insurance agent for more information.

Know Your Rights: Possible Insurance Claims

Posted on Jan 12th, 06:03 pm, under Are You Covered?

If you've ever had to contest your insurance claim with a claims adjuster, you know that it's a long, uphill battle. You're up against an expert who does this for a living, after all. 

Fortunately, there are several possible insurance claims you can make that will increase your compensation after everything is settled. Take the time to familiarize yourself with six of the most important claims:

1. Emotional Distress - What is emotional distress? This refers to any problems caused by an accident that interfere with your personal and/or professional life. Emotional distress qualifies legally as pain and suffering, and therefore it is only right that you factor this in when asking for compensation. 

If you're suffering because of the aftereffects of an accident, see a specialist for as long as it takes to regain normality. When you've finished, get a written report and present this (along with the specialist's bill) at your negotiations with your claims adjuster. This is a completely legitimate expense.

2. Compensation for life disruptions - If complications or injuries from a car accident forced you to give up an important commitment (whether professional or personal), present written proof of this to your claims adjuster. Indicate how difficult it will be to make up for it (or how it may be even impossible to do so). For example, if you missed a wedding, vacation, or training seminar, get proper documentation and show these as evidence of the disruption you've had to endure because of the accident.

3. Emotional reactions to your injury - The main things to take note of here are the following characteristic symptoms: anxiety, confusion, denial, and depression. If you feel that you're experiencing any of these, or if your loved ones observe a change in your attitude after the accident, you may want to see a psychologist or psychiatrist. There's nothing to lose or be ashamed of, and you may come out feeling better for it.

Once again, as with cases of emotional distress, get your written report and medical bill from your specialist when you're discharged, and give them to your claims adjuster. They add legitimate value to your claim, and your adjuster legally cannot refuse to accept them.

4. Your age - Your age is always an element in your claims negotiation because your period of total or partial disability depends on how old you are. This period affects the duration of your treatment and the amount and cost of medication and pain killers you have to take. For example, if you're over 60, your disability period will be around 20 to 30 percent longer than average.

5. Pre-existing medical conditions - Don't forget to factor in any pre-existing medical conditions that you may have, such as high blood pressure, diabetes, arthritis, and previous injuries or operations that left you with chronic problems. If the accident aggravated this condition, consult with your doctor and get a medical report to back your claim up.

6. Visible damages to your car - Finally, the extent of the damage to your vehicle can significantly affect your claim and how much money you receive from your insurance company. If it was totaled or badly damaged, it greatly helps your claim about the severity of your injuries. 

Make sure you take several photos of your vehicle. (Take some in black and white, since colored pictures sometimes cannot be entered as evidence in court.) Then, give a copy of the photos to your claims adjuster, along with your auto repair bill.

Remember, your basic strategy is to provide your insurance claims adjuster with as much written evidence and documentation of your injuries as possible, as well as evidence of the other problems that the accident caused in your life. With any luck, you won't have to resort to hiring a lawyer to contest your case.

Do You Need GAP Insurance?

Posted on Jan 7th, 03:47 pm, under Are You Covered?

Let's assume your car is totally wrecked in an accident, or stolen. Are you certain that your insurance provider will cover the entire amount? The answer can depend on how you financed your car, and you may need another type of insurance called GAP (guaranteed auto protection) coverage in certain cases.

GAP coverage literally covers the difference, or gap, between what you still owe on your car and its actual value. With a simple one-time payment of a few hundred dollars, you can clear your debt to the insurance company in case your car is destroyed or stolen within the first few years of ownership or during a lease.

So why would you ever need GAP insurance? Because your car's value depreciates drastically during the first few years (simply buying it from the dealer takes off 20 percent). If you were to lose your car to theft or damage, your insurance company would only pay you the actual cash value (ACV) of your car. However, if you took out a loan that was worth more than the car's ACV, you'd immediately find yourself at a disadvantage, to put it mildly.

It is highly recommended that you get GAP insurance if you have rolled over your negative equity from a previous car loan into a new loan; made a down payment of less than 20 percent on your car; financed a car that depreciates especially quickly (such as a luxury vehicle); or financed for 6 years or more.

In any of these above situations, a buyer is considered to be "upside down". This is when you owe more on a car than it is worth. You should generally avoid being upside down in the first place; if it can't be helped, make sure you get GAP coverage.

In the case of a leased vehicle, it really makes sense to get GAP coverage, because even though you haven't purchased a car outright, you are still responsible for the vehicle's cost if it's totalled or stolen. The amount of money you put into the car (in the form of your lease payments) is much lower than its actual value. As a result, the difference between these two amounts can be enormous, if you actually lose the vehicle. GAP coverage is crucial for leasing cars, and so naturally most lease contracts require this form of insurance. 

We'll look into the finer details of GAP insurance next week. Until then, stay safe, and happy motoring! 

The Consequences of Driving Without Auto Insurance

Posted on Jan 7th, 03:44 pm, under Are You Covered?

Besides being illegal, driving without auto insurance in the United States is extremely unsafe and irresponsible. The reason behind the nationwide requirement for auto insurance is simple: driver accountability. All drivers must be financially and legally responsible for their actions while they're on the road.

If you go more than a year without auto coverage, the DMV will blacklist your car immediately. Since all insurance companies submit reports to the DMV that list which customers have not renewed their policies, it’s easy to get found out. Don't let this happen to you; renewing a policy after blacklisting is costly and tedious. You'll need to obtain "no objection" certification from the DMV, and pay a large fee on top of that. (For more information on navigating DMV requirements, check here).

Are there any alternatives to auto insurance? If you've got sufficient finances, you can claim that you have enough to pay for damages, but simple existence of financial backing isn't proof that you're willing to spend it. And paying for damages without auto coverage has driven people into bankruptcy in many cases.

In a few states, however, there are certain allowances for individuals who own a large fleet of vehicles and/or have sufficient finances. In these special cases, the DMV accepts a significant deposit in place of an actual insurance policy. The upside of this scheme is that there is no need to pay a regular premium to insurance firms, and it comes out cheaper in the long run. However, most middle-class citizens will find that the minimum deposit amount is beyond what they can afford.

In almost all other cases, standard DMV requirements and standards will apply. This includes the insurance renewal tracking mentioned above. All family members that live under one roof are considered attached to all the vehicles they own and operate. Teenagers of at least sixteen years of age who get their driving license are also automatically added to the insurance policy.

You should review your insurance policy carefully to make sure it covers exactly what you need, no more, no less. Protecting yourself financially is of the utmost importance in these tough economic times. Never forget to renew your coverage under any circumstance; it's not just about following the law, it's also about your peace of mind.  

Wrecked Your Car? How To Get Fair Compensation

Posted on Dec 9th 2009, 03:52 pm, under Are You Covered?

Let's say you were involved in a serious accident that left your car a complete wreck. After taking care of your health concerns, the next thing you want is fair compensation for your car. The car is formally called a "total loss" if the damage is irreparable, or if it's worth less than the cost of repairs. 

Before accepting total loss compensation from your insurance company, both you and your insurance provider must agree upon what your old car is worth. Sometimes, however, their assessment won't meet your expectations, and you'll have to bargain with them. Here's how you negotiate a total loss claim:

1. Keep in mind that it is your right to negotiate for and receive fair compensation. You want an amount that's enough to buy a car of similar year and model and roughly the same condition as your old car before it got wrecked.

2. Never accept your insurance company's offer for compensation without doing your own research first. Ask them to give you a copy of their own report and calculation, with a breakdown of how they came up with that amount, if possible. Don't start any negotiations with your insurance provider if you don't have any information yet. If you don't know exactly what your insurance plan covers, make it a point to find out.

3. Search online and get the sale value for a car model that's exactly the same as your old car. Make sure it's identical in all relevant aspects, including the year, model, make, and features. Most likely, you'll get varying prices, so get the average of everything you find.

4. Next, get the trade-in value for your car in its current state. You can easily find this out by checking it at Kelley Blue Book. However, though this is an important piece of information for strengthening your claim, you must keep in mind that insurance companies are not required by law to offer you the stated Blue Book value for your car.

5. If your car had any special features or add-ons (for example, new tires, low mileage, or heated seats), get the fair market value for a wrecked car of the same model and year, but without the extra features. Make a price comparison between these two. Tell your insurance provider of these features as well.

6. Use all of the information above when asking your insurance company for a higher compensation amount. If they won't budge, consider getting professional help. You may ask an independent arbitrator or attorney for assistance, but be aware that both these measures will cost you more money, so weigh the benefits against these first.

How to Insure Collectible and Vintage Cars

Posted on Dec 9th 2009, 03:38 pm, under Are You Covered?

Just what makes a car a "classic" or "collectible"? These days, it's hard to say, since tastes are becoming so inclusive. Cars labeled "antique" still qualify, naturally. But now people have started collecting other vehicle types, such muscle cars, sports cars, seventies-era cars, and even newer sports cars. 

Whatever your individual preferences, when you're the proud owner of a vintage or collectible car, you’ll need protection for your prized possession. However, regular insurance just won't do for special cars. This is where classic car insurance firms come in. Standard auto insurance companies don't offer the same services that classic car insurers provide, and if you opt for a conventional insurance plan, you'll probably end up paying a higher premium, sometimes up to 500 percent more than a specialized plan!

Here's how you insure a collectible car:

1. First off, you must get a good estimate of your car's value. In most cases, the person who knows this best will be its owner, namely you. Check the market price for your vehicle, and take into account the money you've spent on restoring your car or adding features. You should know the prices of all the options installed, as well as the cost of replacing or repairing these. This is because you want to insure your car for its stated value. Stated value is your personal estimate of its worth, not one provided by an insurance company.

2. Next, find a firm that specializes in insuring classic or collectible cars. Some of the best known US providers include Hagerty Classic Insurance, Grundy Worldwide Insurance, and J.C. Taylor. A full list is available here. 

3.  Make sure you own a "daily driving" vehicle for your everyday use. If you use your vintage car for your daily commute, you might not be eligible for specialized insurance. 

4. Consider the added limitations that classic car insurance plans may impose. You may not use your vintage car for commercial transportation of passengers or goods, or for racing. In addition, some plans have mileage restrictions on your vintage car (often 2,500 miles or less per year).

5. Get several quotes for comparison. Ask these classic car insurers about their features and policies. Prepare all of your vehicle's relevant information before you ask for quotes. If you're getting wondering how much your insurance deductible should be, check out our article on the topic. 

Negotiating Your Insurance Claim Successfully

Posted on Dec 9th 2009, 03:35 pm, under Are You Covered?

Being in an accident is never pleasant, and all too often, neither is dealing with your auto insurance provider. We already gave you advice on how to handle your insurance affairs without the services of a lawyer. Now, let's talk about negotiation. Exactly how do you make your claim when an insurance claims adjuster is sitting in front of you? Here's what you need to know:

1. Never start negotiations without the information you need to support your claim. Get your facts straight, and collect the necessary documentation to back them up. The insurance claims adjuster will want to see copies of the documents you are referring to. Show your insurance company that you're serious about your position and that you came prepared to defend it.

2. In addition to evidence and documentation, come with an idea of how much compensation you'd settle for. Before you negotiate, do research on how much it would take to repair your vehicle with decent working parts (and not used pieces).

3. Medical bills will probably make up the biggest portion of your claim. In addition to your previous medical bills, you need to provide proof of future health expenses. Ask your doctor to write you a formal description of your injuries and what other medication and procedures you may still need.

In negotiating for compensation, you should include an amount for the pain and suffering caused by the accident and injuries. Typically, this is around three times your medical bills. This is another reason why you need to keep all the documents from your health-related issues.

4. Don't be intimidated. This is very important. The insurance adjuster will probably try to rattle you by comparing your case to the countless others they've settled, using these to imply that the damages you're asking for are excessive and unreasonable. You mustn't let this affect your argument.

5. Don't settle for a low compensation amount. Firmly state that you are not there to talk about previous cases he or she may have settled, and that you want to discuss your accident and personal injuries. Your case should not be compared to others, so stick to your position.

6. In your discussion, you should talk about compensation for the days you took off from work while recuperating. Bring official documents from your company with the amount you want your insurance provider to reimburse. If you were paid using your days off, such as vacation time or sick leave, you should still ask for compensation. 

The Facts About No-Fault Insurance

Posted on Nov 17th 2009, 12:56 am, under Are You Covered?

No-fault insurance can be a misleading or confusing term. Contrary to what the term implies, it does NOT mean that drivers will not be found at fault in accidents; some or all parties involved will always have to take responsibility, whether full or partial. 

What no-fault insurance really means is that benefits are paid to insurance policy carriers, no matter who caused the auto accident. This means that you get financial assistance (up to a specified limit) when you need it most, immediately after the accident, without having to wait for the insurance companies of those involved to decide who was ultimately responsible for the damages. In return, you surrender some of your rights to sue the other party.

This special form of insurance is available in many countries, but only the following thirteen US states have adopted it: Colorado, Florida, Hawaii, Kansas, Kentucky, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Dakota, Pennsylvania, and Utah.

There are several benefits to having a no-fault system. These include the aforementioned faster payment of claims, elimination of costly and time-consuming lawsuits, lower insurance rates (legal fees count for 12 percent of premium costs), and accessibility to people with less financial means (due to the lower rates).

However, no-fault insurance also has its drawbacks. Critics argue that most of its benefits don't really get applied in reality, and that no-fault encourages bad drivers since they can't be sued for the damages they cause. It also doesn't offer compensation for non-economic damages, such as paralysis, pain, and suffering. In addition, insurance premiums in no-fault states average at 25 percent higher than those in traditional insurance states, thus eliminating any savings from the lower rates.

The thirteen states listed above have adopted a modified no-fault system, meaning that you will be automatically compensated for damages up to an amount specified in the policy, but you may still sue for non-economic damages if these exceed a particular limit. It can often be a complex issue. You can get more detailed information about no-fault auto insurance here and here. If you live in a state that requires no-fault insurance, you may also want to ask your attorney for professional advice on this special form of insurance. 

Making Sure Your Insurance Claims Stick

Posted on Nov 2nd 2009, 07:50 am, under Are You Covered?

When you're filing an insurance claim because of a vehicular accident, the last thing you want is a dispute with your insurance company. Unfortunately, this is exactly what happens to many policy holders. It can be extremely frustrating when you have to haggle with your insurance company over how much compensation you deserve, in addition to dealing with the physical and emotional stress from the accident. 

So from the very onset, you have to do everything possible to ensure your claim is ironclad. Here's what you'll need to do:

1. Call your insurance company as soon as possible. When you get into an accident, your primary responsibility is ensuring your safety and that of your passengers. Have a medical check-up done on everyone involved. Then, immediately inform your insurance company about the accident. If you can't recall the terms of your insurance policy, this would be the time to look it over again. Review what it covers and familiarize yourself with the procedure for making accident claims.

2. Put as much detail as possible into your claims statement. Provide your insurance company with clear and concrete evidence of your accident. Besides giving them a detailed written statement, include pictures of the damage done to the vehicles involved and the accident site itself. You should also enclose the medical reports of any injuries sustained by yourself and your co-passengers, no matter how minor it may appear. Finally, to really strengthen your claim, include the names and contact information of any witnesses to the accident.

3. Keep a record of everything that happened since the accident. Never really on your memory for this; with all the stress of dealing with an accident, you'll never remember each and every detail. Instead, you should insist on getting documentation for all events related to your insurance claim. This includes any conversations you have with your insurance agent, interviews with the police, and records of your medical bills. Keep all documents in one file for easier access.

4. Review your insurance policies. If you happen to have several policies, you may be able to file a claim under each of them. You should know what you're entitled to; this is why you have to stay informed about all details regarding insurance claims.

5. Lastly, always be honest. Never fabricate any detail regarding your accident or injuries. Always operate in good faith; otherwise, if you're found out, your entire claim will be automatically disqualified. 

What Does Your Auto Insurance Cover?

Posted on Oct 31st 2009, 01:24 am, under Are You Covered?

When you buy auto insurance, it's not enough to just hand out your money, then sit back and consider yourself set. Are you familiar with the details of what you just bought? You owe it to yourself and your family to know exactly what your insurance covers. Here are several components that may be included in your auto insurance policy:

Property damage liability - If your car damages someone else's property in an accident, this item will cover it. Because this form of coverage exists for the other party's protection, it has become a requirement in practically every single state in the country.

Bodily injury liability - In the worst case scenario, if your car happens to injure or kill someone, this item covers claims made against you for death and injury, as well as legal costs.

Collision coverage - This one covers your car up to its book value in case it sustains damage. Though it is not legally required, most lending institutions require this form of coverage. It carries a deductible (i.e., a certain amount you must pay for each claim before the insurance takes effect). If your deductible is low, then you'll definitely pay a high premium.

Comprehensive coverage - This item insures your car against several non-accident causes, such as fire, flood, theft, and vandalism. Like collision coverage, you'll still have to pay a deductible before you can avail of the benefits.

Uninsured motorist protection - If your car is damaged or its occupants injured in an accident with a motorist that has no insurance, this particular item will cover the costs. It also protects against hit-and-run drivers and motorists with an insufficient amount of insurance ("under-insured" coverage). This is a particularly important form of protection, since up to 30 percent of drivers have no insurance in some states.

Medical payments - An optional item in some states, this insures you against injuries that you or your car's occupants might sustain. However, no-fault states where you need not provide proof of fault to get reimbursed) replace medical payments insurance with personal injury protection.