Auto Insurance

Some insurers may provide coverage for business use vehicles depending upon the type of vehicle and its particular use in business, but you may need to purchase a commercial auto policy to receive the coverage you need. You should consult with an insurer or insurance agent or producer to determine the proper policy needed.

If you vacation within the United States (and in many cases Canada), for liability coverage, the policy carried by the rental company will be primary (pay first), and your policy will be excess (pay second) if the rental company’s limits are not enough to pay for the injuries or property damages you cause. For physical damage to the rental vehicle, some companies insurance allow the coverages you have under your comprehensive and collisions coverages to apply to the rental vehicle, subject to the deductible stated in your policy. Before renting, check with your insurance agent to determine if your coverage applies to the rental vehicle.

Some of the coverages provided under Comprehensive include theft of all or part of the vehicle, glass breakage, and damage due to fire, windstorm, hail, water, falling objects, vandalism, explosion, or hitting a bird or animal.

Collision coverage pays if your auto collides with an object, including another car, or if it overturns. Your insurer will pay to repair these damages even if the collision is your fault.

If you have assets you need to protect, you may want to carry higher than minimum liability limits to protect yourself from lawsuits by a person or persons you may injure in an accident.

Bodily Injury pays for bodily injury to others for which you become legally responsible due to an auto accident in which you were involved. It does not pay for bodily injury you may sustain. You would need to have Medical Payments coverage in order to have the injuries you sustain in an auto accident covered under an auto policy.

No. Property Damage coverage protects you for damage you may cause to the vehicles or property of others. You would need to have Collision coverage on your auto policy in order to have coverage to fix or replace your vehicle in this situation.

The deductible for Comprehensive or Collision applies to each loss that occurs to your vehicle. A deductible is the dollar amount you will have to pay toward the loss before the insurer begins to make payments on the loss.

You will need to read your policy for a complete description of the coverage provided. Basically, Medical Payments coverage provides coverage for necessary and reasonable medical and funeral expenses incurred as the result of an automobile accident up to the limit stated in the policy for you or passengers in your vehicle.

Even though you have major medical insurance, you may still wish to carry some medical payments insurance to cover deductibles and co-payments which are not covered by your health insurance plan.

Uninsured Motorist coverage protects you or passengers in your vehicle for bodily injury you or your passengers sustain in an accident involving a driver who has no liability coverage. Underinsured Motorist coverage protects you or passengers in your vehicle for bodily injury you or your passengers sustain in an accident involving a driver who has insufficient insurance to cover the injuries of you or your passengers.

Even though the law requires all motorists to carry liability insurance, not all motorists have liability coverage in force. Also, motorists may come from other states or countries and not have liability coverage on their vehicles.

Rental Reimbursement coverage provides a specified amount for you to rent a vehicle while your covered auto is being repaired or replaced after it has been damaged because of a loss covered under Comprehensive or Collision. It does not provide coverage for mechanical repairs that result from mechanical breakdown that are not related to a comprehensive or collision loss.

The policy covering the vehicle would be primary and in most cases, your policy would cover the vehicle on an excess basis. If no policy covers the borrowed car, most companies will treat your policy as the primary coverage for the borrowed car. (Primary means that policy will provide coverage first, and excess means that policy will provide coverage after the limits of the primary policy have been exhausted.)

First, discuss with your insurance agent what steps they recommend. You may also wish to refer to your insurance identification card, as the steps you need to follow may be listed on the card.

Generally you should first notify the police. Then write down the names, addresses, telephone numbers and license numbers of persons involved and of witnesses. Also write down the license plate number and state of each vehicle involved. You may even want to keep a disposable camera in your glove compartment to take photos of the accident. Do not admit fault, and do not discuss the accident with anyone except your insurer representative or insurance agent or producer, or the police. Notify your insurance agent or producer promptly. Cooperate and answer all questions fully. Take notes whenever you talk with insurer employees, your insurance agent, lawyers, police or others about the accident. Write down the date, times, names and subjects you talked about and include all decisions or promises made. Save your receipts for such items as car rental or a hotel room if the accident happens out of town, and save copies of all documents you send or receive.

An insurer’s premium increases are a direct reflection of the countrywide or statewide pool of losses that the insurer experiences. The losses of the few within the insurer’s pool of policyholders are paid for by all policyholders within the pool. This is the basic premise upon which the concept of insurance is based and without which no insurance would be available. This does not mean that your own favorable loss experience cannot be recognized. Various insurers give numerous discounts to policyholders which recognize their excellent driving records. (See next question for type of discounts.) Other reasons for the increase in the cost of auto insurance are attributable to the costs to settle losses such as the costs to repair vehicles and the medical costs for injured persons which continue to rise. The increase in lawsuits is also a major factor in insurer rate increases.

First, make sure you are taking advantage of the discounts offered by your insurer. Most insurers provide discounts for at least some of the following: accident free drivers discount; a package discount for insuring your home and auto with the same insurer; multiple auto discount; good student discount; nonsmokers discount; and passive restraint discount (for vehicles with air bags or automatic seat belts). Talk with your insurance agent for detail regarding your policy.

Second, drive safely. Avoid tickets and accidents. Don’t drink and drive. A poor driving record adversely affects your rates.

Third, drive a safe reliable vehicle. Before purchasing a new vehicle consider the cost of insurance. Some vehicles such as sports cars, SUV’s, and other high-profile vehicles cost more to insure.

Fourth, discuss with your insurance agent to make sure that you have appropriate coverages for you and your vehicle. You may consider higher deductibles for your comprehensive and collision coverages.

Finally, be pro-active regarding your credit or insurance score. Many insurers offer discounts for good credit. Understanding and maintaining a good credit score may significantly reduce your premiums in the future.

If you are un-insured you may be ticketed and fined, your vehicle registration may be suspended, your drivers’ license could be suspended and your vehicle could be impounded. If you cause an accident you (and your parents if you are living at home) could be sued. When you apply for insurance again you typically will pay more for your insurance because most insurance companies charge higher rates for previously uninsured drivers.