The Collision Component of Auto Insurance Coverage and Some Recomendations

Collision car insurance protects the insured if they are in an accident with another motor vehicle (or another object) in that it covers the cost of repairing the insured’s vehicle.  It is paid to the insured regardless of whether the accident was their fault.  This insurance is almost always a requirement if there is a loan on the car because if the automobile lets say is totaled  it protects the creditor.  It does so because the insurance payment to the policy holder is ideally enough to pay off the loan.  Now if the car is worth less than the loan then the insured has to pay the difference unless they have a gap rider (which is recommended).  If there is no loan on the car collision insurance  is not a requirement though the insured may regret not having it if the car has a least some value and  is badly damaged in a accident especially if it was their fault.

An important aspect of collision insurance is the deductible which is how much the policy holder has to pay out of pocket when the insurance company goes to make payment to repair the vehicle.   It would be better for a driver that does not have a lot of spare cash  to choose a lower deductible.  This is another reason why its important to review one’s auto policy at least once a year.   Another variable in the cost of collision insurance coverage is how much the automobile is worth as a more expensive vehicle will cost more to cover.

On a final note when a claims adjuster makes an offer to make a payment to repair or replace the vehicle that was damaged it certainly does not have to be accepted (especially the first time).  Check out my auto insurance claims tips here.  Sometimes you have to play hard ball with an insurance company if they aren’t being fair.

Personal Injury Protection (PIP) Insurance Coverage

Personal injury protection insurance or PIP protects the policy holder from medical bills if they are injured in an accident.  This part of auto coverage applies even if the insured is at fault.  Just bear in mind that each state has a major influence in the rules surrounding this auto insurance coverage.  For instance some states necessitate drivers to have PIP where others don’t.  Each state has a say in what kind of treatments are covered as well.

PIP insurance can go beyond just the driver’s medical bills.  It can also pay for income lost due to an accident if the driver is unable to work.  If this is available to you its worth the extra cost especially if you don’t have disability insurance.   Its also possible for PIP to pay for funeral expenses if the driver is killed.   PIP can also cover medical expenses of others in the car at the time of  accident or if  you are a pedestrian that is hit and injured.

A couple of final notes.  If you are in a state where PIP is not required, find out what your medical insurance covers in the event of an accident.  Call your health insurance provider and find out if their are any gaps in what they cover  (as far as car accidents are concerned).  Use PIP coverage to fill in any gaps.  If you drive with others often PIP can protect you from their medical expenses if in an accident while riding in your vehicle.

5 Auto Insurance Claim Tips

  1. If you’re in an accident contact your insurance company right after the police have been contacted.  Its even better if the insurance company comes out to the scene of the accident before the cars are moved.  If they have to be moved take  pictures from multiple angles before movement occurs.  Doing this should speed up the claims process and help your insurance coverage company too especially if the accident wasn’t your fault.  Helping your insurance company should in turn make things easier for you.
  2. Research what your car was worth before it was damaged in the accident.  Look around to see if you find what a comparable car is selling for in classifieds and at dealers.  Check with price guides as well like Kelley Blue Book.  Also utilize online tools like Edmund’s appraiser.  If you believe your car insurance company is providing less for your claim than what is fair provide your own research to them for review.  Ask them to adjust your claim upwards accordingly.
  3. If you are going to keep the car use a shop you trust.  Your insurance company may advise you to use a certain shop but keep in mind they may be doing this in their own best interest.  They may have some  deal set up with that shop to keep cost down.  Why would they pay more than they have to?  With that said choose an auto shop that is trustworthy that you know can properly fix the automobile with quality parts.
  4. Your state insurance department is on your side protecting you from being under compensated for a claim.  Log onto their website or call them to fully understand the protection they provide you.
  5. As a last resort if the insurance company refuses to cooperate with a fair claim legal arbitration is an option.  If they refuse to arbitrate you may need to call a lawyer for legal action.  Only use this if these is not other way to work with the company.

Car Insurance Ideas for Bad Drivers

Getting a few black marks on your driving record can be shocking when your insurance company raises your rate substantially.  Even worse they may decide to drop you as customers altogether.  Below are some ideas/suggestions for those without a perfect driving record:

  • Its important to realize that it may take sometime to repair a blemished driving record.  Reflect on your driving record. What can you do to improve your driving habits?  Too many speeding tickets?  Perhaps you’re not giving yourself enough time for your commute or to drive to your other responsibilities.  Too many accidents?  It may be worth considering a defensive driving course which could save you some money and improve your standing with the car insurance company.
  • Risk is the key when an insurance company figures out what your premiums are or even whether or not to provide you with auto  insurance.  Some companies have a higher appetite for risk (for insuring imperfect drivers)  and this be discovered by shopping around.  This is especially true if you’ve lost your insurance as some companies may look at it like gaining your business is your former company’s loss.  In any case shop around, you never know if another company is able to take you  with an imperfect record for less money.
  • If your driving record has left you with no insurance and you can’t get coverage with another company turn to your state insurance commission.  Each state has a program to help uninsured motorists get coverage.  This should be a last resort because the rates are often off the chart.
  • Is your car worth having full coverage on it?  If you own it without any loan and its not worth much perhaps the collision or comprehensive coverage could be dropped.    This is especially true if your driving record is making your premiums insane.  Its pertinent to have proper liability insurance because its the law but also it protects you when you cause damage with your car.