Auto Insurance Law » Injury Coverage

6 Frequently Asked Questions About Car Insurance

admin — Tue, 30 Mar 2010 08:17:37 +0000

Everyone has car insurance coverage on his or her vehicles. After all, it’s the law, right? But how much do you really understand what your car insurance does, how it works, and the things that can impact the amount you pay on your premiums? Here’s a look at some of the commonly asked questions about auto insurance.

1. If I file a claim will my insurance get more expensive? Car insurance companies expect everyone to make mistakes every now and then. So, you should not see an increase in your rates for the first fender bender you have. If you have another wreck, you may start to see the increase because you will be considered less of a safe driver in the eyes of the car insurance company.

2. What are deductibles? Deductibles are the amount you will have to pay before the insurance company will pay for a claim. If you have a deducible for $250 on your car insurance policy and a wreck leads to $750 in damages you will have to pay the initial $250 before the car insurance company will kick in and pay the remaining $500.

3. Will my car insurance company cancel my policy because I am in wreck? Usually the answer to this is no. A wreck may mean you see an increase in rates, but often that is the extent of the response from the insurance company. The exceptions to this rule are if you were doing something illegal when you got into the wreck (such as being under the influence), or have a number of traffic infractions piling up. Once you start filing multiple claims or have a bad traffic history you may be cancelled because you are seen as a dangerous driver.

4. What does bodily injury coverage do? Bodily injury protection coverage is a plan that will protect you if someone is injured in a wreck and tries to sue you for damages.

5. What does no fault mean? No fault is a distinction many states have when it comes to what auto insurance companies have to cover. If you are in a no fault state is means no matter who is responsible for a wreck you will each have to rely on your own insurance company to pay for your damages. This means you will need to make sure you have adequate coverage to pay what you may need in a wreck.

6. What’s Personal Injury Protection? If you happen to be in a wreck and people are injured either in your car or the other vehicle, a personal injury protection car insurance policy will pay for the medical, hospital and even funeral expenses for those injured or killed.

By: Stephen Sikes

Auto Insurance Basics

admin — Thu, 25 Feb 2010 05:58:27 +0000

Auto insurance is a contract that protects your financial security in case of an accident. Although it is not mandated by federal law, the purchase of auto insurance is usually a requirement in most states; every state (with the exception of New Hampshire and Wisconsin) have minimum insurance laws.

These two states, instead of having insurance requirements, have mandated financial responsibility laws, so that the owner of a car is required to show that he has sufficient funds to pay any necessary claims. If said owner cannot produce proof of satisfactory assets, then he must buy an auto insurance policy. Regardless of the law, having good auto insurance is practical for the driver who wishes to avoid lawsuits or immense repair bills.

According to the Insurance Information Institute (III), a basic auto insurance policy is comprised of six basic types of coverage. While some of these types of coverage are required by state law, some are considered optional.

These are: 1. Bodily injury liability 2. Property damage liability 3. Medical payments or Personal Injury Protection (PIP) 4. Collision 5. Comprehensive 6. Uninsured/Underinsured motorists coverage

Liability Insurance

Liability coverage is the foundation of any car insurance policy, and is required in most states. If you are at fault in an accident, your liability insurance will pay for the bodily injury and property damage expenses caused to others in the accident, including your legal bills. Bodily-injury coverage pays for medical bills and lost wages.

Property-damage coverage pays for the repair or replacement of things you wrecked other than your own car. The other party may also decide to sue you to collect “pain and suffering” damages.

Liability insurance (both bodily injury and property damage) is the foundation of most auto insurance policies and is ideal if you are seeking a low cost car insurance policy. Every state that requires auto insurance mandates the purchase of property damage liability, and Florida is the only state that requires auto insurance but does not call for bodily injury liability. If you are at fault in an auto accident, your liability coverage will pay all the expenses, bodily injury, property damage, and any legal bills. The bodily injury coverage would pay for medical bills and lost wages; the property damage coverage would pay for any auto repairs, or replacement. Property damage liability usually repairs damage to other vehicles, but can also cover damages to things such as lamp poles, fences, buildings, or anything else that your car may have struck.

Remember, although purchasing only the minimum can get you a cheap auto insurance rate, if you cause a serious accident, minimum insurance may not cover you adequately. That’s why it’s a good idea to buy more than what your state requires. If you own a home and have nest egg and a savings account, you should consider more liability insurance because, in most states, drivers are allowed to sue other drivers who injure them in car accidents. If you’re sued and your liability insurance doesn’t pay for all of the damages, your personal finances are on the hook, and it’s likely you’ll become a target.

Collision and Comprehensive Coverages

If you cause an accident, collision coverage will pay to repair your vehicle. You usually can’t collect any more than the actual cash value of your car, which is not the same as the car’s replacement cost. Collision coverage is normally the most expensive component of your car insurance rate. By choosing a higher deductible, say $500 or $1,000, you can keep your premium costs down. However, keep in mind that you must pay the amount of your deductible before the insurance company kicks in any money after an accident.

Insurance companies often will “total” your car if the repair costs exceed a certain percentage of the car’s worth. The critical damage point varies from company to company, from 55 percent to 90 percent.

Comprehensive coverage will pay for damages to your car that weren’t caused by an auto accident: Damages from theft, fire, vandalism, natural disasters, or hitting a deer all qualify. Comprehensive coverage also comes with a deductible and your insurer will only pay as much as the car was worth when it got wrecked.

Because insurance companies normally will not pay you more than your car’s book value, it’s helpful if you have a rough idea of this amount. Check the Kelley Blue Book or the National Automobile Dealers Association. If your car is worth less than what you’re paying for the coverage, you’re better off not having it.

Neither collision nor comprehension insurance is required by any of the states, but some lenders, when the owner finances the car, may require the purchase of collision and comprehensive in the loan agreement. Even when it is not required, collision and comprehensive coverage is highly recommended by the insurance industry, so that in the unforeseen event of damage or theft, the owner of the car can avoid heavy bills. Theft of cars is not as unusual as some people may think. In 2004, a car was stolen in the United States every 26 seconds, and a car had a 1 in 190 chance of being stolen.

Medical Payments, PIP, and No-fault coverages

Medical payments (MedPay) coverage will pay for your and your passengers’ medical expenses after an accident. These expenses can arise from accidents while you’re driving your car, someone else’s car (with their permission), and injuries you or your family members incur when you’re pedestrians. The coverage will pay regardless of who is at fault, but if someone else is liable, your insurer may seek to recoup the expenses from him or her.

Personal Injury Protection (PIP) coverage is an extended form of MedPay. PIP may cover expenses that are related to injury, but not necessarily medical, such as lost wages, childcare and funeral costs. PIP coverage is currently required by sixteen states. If you are already insured under a good health insurance policy, then fortunately, there is no need to buy more than the minimum required amount of PIP or MedPay insurance.

If you have a good health insurance plan, there might be little need to buy more than the minimum required PIP or MedPay coverages, if at all. And, if you already have disability insurance, there’s little reason to purchase higher-than-minimum amounts of PIP.

Uninsured/Underinsured Motorists Coverages

Uninsured motorists (UM) coverage pays for your injuries if you’re struck by a hit-and-run driver or someone who doesn’t have auto insurance. It is required in many states.

Underinsured motorists (UIM) coverage will pay out if the driver who hit you causes more damage than his or her liability coverage can cover. In some states, UM or UIM coverage will also pay for property damages. Similarly, underinsured motorists insurance will cover any damage caused when you are struck by a driver who is not insured for a sufficient amount.

If you are hit, as a pedestrian, underinsured coverage will cover the expenses. Uninsured motorists insurance is currently required by twenty states, and Underinsured motorists coverage is required by only four: Connecticut, Minnesota, Maine, and Vermont.

You’ll probably want to have at least the minimal amount of UM/UIM because if you can’t find the other driver, you’ll at least have some coverage for pain-and-suffering damages.

Add-on Features

Several supplemental auto coverages are available, either as separate premium items or included in augmented policies. -Rental reimbursement, a common add-on, covers vehicle rentals required because your car is damaged or stolen. -Coverage for towing and labor charges in case of a road breakdown is also common. -Gap coverage for your new car will pay the difference between the actual cash value you receive for the car and the amount left on your car loan if your vehicle is totaled in an accident.

Basic auto insurance is required by virtually every state and is typically the cheapest auto insurance in the marketplace. Proof of insurance is required at different times throughout the life of a vehicle.

You may be asked for proof of insurance at any and all of these times: at vehicle registration, at the time of an accident, and any time when driving the vehicle. It is suggested that the owner of the car keeps proof of insurance in the car at all times, instead of on his or her person, so that it can be available at all times, no matter who is driving.

Any violations of state law regarding auto insurance could result in, at best, a hefty fine, and at worst, suspension of your driver’s license and/or time in jail. The dire consequences of driving while uninsured are not worth the neglect of paying for insurance. The chance that an uninsured driver will avoid detection is slim; he is likely to be caught and strictly punished.

By: Amy Danise

California Motorcycle Insurance

admin — Wed, 17 Feb 2010 13:45:33 +0000

There are several insurance companies that cater to all kinds of motorcycle insurance in California. They offer dozens of useful hints that save you a lot of dollars. If you want to buy motorcycle insurance, it is advisable to shop more than 25 top rated, best service insurance companies for the lowest premium. Additional discounts are given for being a safe rider, insuring more than one bike, and touring bikes. A bike owner is very likely to get a medical expense policy without any hospitalization insurance.

The coverage for motorcycle insurance is very different from that of an automobile insurance policy. Motorcycles give less protection than automobiles, so the chance of severe injuries is high. Motorcycle insurance serves to reduce a high percentage of money loss in accidents.

There are various types of motorcycle insurance coverage in California. Liability (bodily injury), property damage, uninsured or underinsured motorist, comprehensive, collision, and medical expenses are among them. If an accident occurs due to the fault of the motorcyclist, the liability coverage pays the injured person. According to California motorcycle insurance law, the insurance companies have to spend $15,000 per person for an injured person and $30,000 for all injured persons in a single accident. Property damage coverage will pay for the property that is damaged by your motorcycle. The law requires $5,000 for the destruction of property of others. Collision coverage requires comparatively large amount of deductible than that for standard bikes.

If an accident is caused by an uninsured person or those who do not have enough bodily injury coverage to satisfy your claim, uninsured or underinsured motorist coverage will pay for you. It also meets your medical bills, pain and suffering, lost wages and future damages. The coverage pays around $30,000 per person and $60,000 for all persons injured in any one accident. Comprehensive coverage pays for losses due to theft, flood and fire, while medical expenses coverage meets all medical expenses.

By: Eric Morris

California Car Insurance Requirements

admin — Tue, 16 Feb 2010 03:25:26 +0000

California Law requires all motor vehicle owners to have insurance which provides Bodily Injury Coverage and Property Damage Coverage.

In the State of California the required minimum coverage for bodily injury is $15,000 per person injured in any one accident and $30,000 for all persons injured in any one accident.

The required minimum coverage for property damage is $5,000 for injury to or the destruction of property of others in any one accident.

Optional insurance may include Uninsured Motorist Coverage. If the policy holder makes this choice, the actual coverage purchased must be at least the amount of the required Bodily Injury Coverage. If the policy holder purchases more than the required amount of Bodily Injury Coverage, Underinsured Motorist Coverage may then be purchased in a lesser amount. The State of California does not require insurance companies to provide Uninsured Motorist Coverage in any amount greater than $30,000 per personal injury in any one accident and $60,000 for all persons involved in any one accident.

As well, if Uninsured Motorist Coverage is purchased, then the policy must also include Underinsured Motorist Coverage. California requires insurance companies to offer for purchase Underinsured Motorist Coverage in an amount equal to that purchased for Uninsured Motorist Coverage. Insurers may, however, offer a greater amount of Underinsured Motorist Coverage than the Uninsured Motorist Coverage actually purchased by the policy holder.

California requires liability limits of 12/30/5 which represent $20,000 for bodily injury coverage per person and $30,000 for bodily injury coverage per accident which will pay for medical bills and lost wages. The last number of 5 represents $5,000 for property damage coverage per accident which will pay for repairs and/or replacement of objects damaged or destroyed other than the policy holder’s own vehicle.

Personal Injury Protection (PIP) and No-Fault Coverage are not required by the state.

Adding Collision Coverage as well as Comprehensive Coverage to an insurance policy is optional as well in California.

By: Elizabeth Newberry

Things to Consider About Colorado Auto Insurance

admin — Sun, 14 Feb 2010 14:21:35 +0000

As the Recession continues to worsen, and gas prices continue to soar one can’t help but reflect on all the other necessities in our lives that will be impacted. Many of us have to drive to and from work, and considering what gas prices cost these days, only wish we could car-pool or take public transportation.

So the question arises, since I reside in a State that makes auto insurance mandatory, how can I find the most affordable car insurance? How can make sure I obtain coverage that meets my needs when there are so many to choose from?

First thing it would be important to know is the minimum coverage by Law for the State of Colorado. Colorado requires that liability for each individual injured party in an accident, the coverage should be $25,000 maximum payout for each person. The total maximum payout for all injured parties would be $50,000 liability for a single accident.The total property damage liability for a single accident is $15,000. What this means is that you must have as a bare minimum $25,000 per person for injuries caused to another person, up to $50,000 for all parties injured in the accident you were involved in and $15,000 for damage you caused to the other party’s property.

Again these are minimum coverage by Colorado State Law. When considering Colorado Auto Insurance you should consider higher levels of coverage if you have assets to protect.In addition to considering the protection of your assets, optional coverage such as medical payments, collision, comprehensive and underinsured motorist bodily injury coverage may be the way to go.

The driving force for how Colorado Auto Insurance premiums are determined is based upon state driving records as a whole. What happens is that insurance companies take the cost of providing coverage for all Colorado drivers (including settlements and legal fees) and divide it up among all the drivers in the state. While I would like to tell you that the cost is distributed evenly, that is not the case.

The percentage paid by you as an individual driver is determined by the following:

Your driving record Your age Your logistics Type of vehicle you driveLet’s face it, if you are under 25 it doesn’t matter what state you live in, it is going to cost more to insure you.It doesn’t matter if you are driving a Pinto, a Viper or a Mustang GT your age works against you. Red cars and black cars cost more to insurance than grey or blue. A sports utility vehicle costs more to insure because they are highly sought after by car thieves. The concept of installing GPS tracking chips to deter auto theft is beginning to become more common. It would be foolish to the extreme to steal a car that can be traced in a matter of minutes, wouldn’t it? Security systems also lower your auto insurance rates. Often you may find during the questionnaire you will be asked whether you will be using your vehicle for pleasure or work and on average how many miles you will drive. These are all determining factors in what your insurance premium will be. Obviously by driving more, you increase your chance of a motor vehicle accident. So do yourself a favor: protect both your assets and your wallet by comparison shopping before selecting a Colorado Auto Insurance.

By: Anthony M. Peck

Auto Insurance – What Are the Required Coverages?

admin — Thu, 11 Feb 2010 05:22:33 +0000

Getting auto insurance in Pennsylvania is a requirement of state law. Driving without insurance can result in fines, license suspension, revocation, and even jail for constant offenders. There is no reason to drive without insurance anyway. It is an affordable way to protect yourself from all of the different things that could go wrong on the road. You might be the safest driver in the world, but you can’t guarantee that the other people on the road will be as careful. Therefore, having auto insurance to cover your car’s replacement value, your own medical expenses, and the injuries of others is going to be necessary so that you are protected at all times.

Getting auto insurance in Pennsylvania is very different than getting it in other states, simply because drivers have the right to choose between a traditional insurance policy and the more common no-fault policy that lets everyone pay for their own damages when an accident occurs. When drivers fail to choose the type of system that they want to follow, they are defaulted to a typical ‘tort’ system or a system where the accident is blamed on whoever is proven to be at fault. This can get very confusing for many drivers, so make sure that you talk to an insurance agent when you need one. According to state law, auto insurance in Pennsylvania must include:

$15,000 bodily injury coverage per person
$30,000 bodily injury coverage per accident
$5,000 property damage coverage

Of course, you should keep in mind that this is the MINIMUM. In the event that you have an auto loan, you’ll probably be required to carry more coverage so that the lender is protected in the event of an accident, as well. Make sure that you understand what is required of you so that you don’t get your car or license taken for being uninsured or under-insured.

While this might seem like a lot to think about, you can utilize the internet to find the best policies or work directly with an agent. An agent will be able to tell you what coverage you need, and often can get you much better rates because they have a sort-of ‘inside edge’ with the insurance companies. Plus, their services are free, so you’ve really got nothing to lose. Just focus on getting the right insurance for your needs, no matter what else you do.

To learn more or get quotes for your auto insurance in Pennsylvania, visit the state insurance departments website or Williams Agency’s site for more details.

By: R Dan Williams

Guide to California Auto Insurance

admin — Mon, 01 Feb 2010 04:14:10 +0000

If you need California auto insurance, you might be a little confused by all the choices available today. California auto insurance, like in all other states, is available in numerous packages with many types of coverage. Some coverage is required by your state while other types are required by car lenders, so it’s wise to study up on insurance before making a choice. This guide briefly explains the types of coverage for California car insurance to help you grasp the basics.

Liability and Bodily Injury Coverage

Liability insurance for bodily injury protects you from claims against you if someone is injured in a car accident in which you are at fault. If you have an auto accident, this type of insurance covers the injured person’s medical costs resulting from the injury up to a certain dollar amount. There is usually one dollar amount for coverage of a single person in the accident, and another cap amount for the total payment for all persons injured in the accident. This insurance also covers your legal defense costs.

When shopping for California auto insurance, be sure to get as much liability coverage as you can afford. Check around to see which companies offer the best coverage plan within your budget. It’s better to be safe than sorry. Also keep in mind that for auto insurance, California laws require you to have a certain minimum amount of liability coverage even if you do not owe money on your car.

Property Liability Coverage

Property liability is similar to bodily injury coverage except it covers damages to the other person’s vehicle in an accident in which you are at fault. It also covers damages to other properties, such as houses, fences, lawns, and telephone poles. As with liability for bodily injury auto insurance, California state law also requires a certain minimum amount of property liability coverage.

Collision Coverage

Collision insurance is usually required by lenders and covers damage to your own vehicle in an accident with another automobile or if you wreck by hitting other objects, such as signs, trees, ditches, or buildings. This coverage protects you if the accident is deemed to be your fault. If the accident is caused by another driver, their insurance will need to cover any damages to your vehicle. Companies offering California car insurance will often charge a certain amount for liability only, and then extra for collision coverage. These are usually based on your driving record.

Comprehensive Coverage

You might also want to obtain comprehensive coverage for additional protection. This covers theft and fire, or damage to your car by other means such as tornadoes, vandalism, floods, or hitting a large animal (such as a deer, cow, or horse). California auto insurance policies offering this coverage often vary from one company to the next. Some may offer to cover certain items within the package that others won’t, so shop around to see what’s available.

Underinsured or Uninsured Motorist Coverage

If a driver hits your car and has no insurance, this leaves you in a bind. They will likely not be able to pay for the damages even if it is their fault. This is where underinsured or uninsured motorist coverage can be advantageous. It covers damages to your automobile in these cases and also in the case of “hit and run.”

Other types of coverage to consider, which may or may not be included in your normal coverage, include towing, no-fault personal injury protection (PIP), medical coverage for yourself and others in your car no matter who is at fault, full glass coverage (for damaged windshields or windows), and car rental if and when you need to leave your car for long-term repairs.

Understanding each of these and how they work will help as you shop around for California auto insurance. Use online resources to find the right coverage for you today!

By: Chris Robertson

Texas Car Insurance Requirements

admin — Thu, 28 Jan 2010 16:23:34 +0000

Texas state law requires all motor vehicle drivers to carry auto liability insurance in the form of Bodily Injury Coverage and Property Damage Coverage. As well, if the vehicle is still under lien, the lender will require that the policy holder also carry Collision and Comprehensive Coverage.

In Texas the required minimum coverage for Bodily Injury Liability Coverage is:

• $20,000 per person injured in any one accident

• $40,000 for all persons injured in any one accident

The required minimum coverage for Property Damage is $15,000 for injury to or destruction of the property of others in any one accident.

Optional insurance may include:

Uninsured/Underinsured Motorist (UM/UIM) Coverage: Bodily Injury UM/UIM will pay lost wages; medical bills; pain and suffering; disfigurement; and permanent or partial disability. There is no deductible. Property Damage UM/UIM will pay for damaged items in the accident vehicle, repairs and rental cars, however there is a $250 deductible. UM/UIM coverage must be offered by insurance companies. If the policy holder chooses not to purchase this coverage, he/she must put the rejection in writing.

Collision Coverage: Will pay for repair or replacement of the vehicle regardless of fault, however payment is limited to the cash value of the vehicle minus the deductible.

Comprehensive Coverage: Will pay for damage to the vehicle caused by other incidents besides collision, i.e., vandalism, storm damage, and theft.

By: Elizabeth Newberry

California Auto Insurance Laws – CA Car Insurance Laws That You Need to Know

admin — Mon, 25 Jan 2010 10:54:51 +0000

What are some of the California auto insurance laws that CA residents need to know? California is a tort law state for auto insurance, which basically means you can sue the other party if you are injured in a car accident. There are several other car insurance laws that consumers in the Golden State should be aware of before looking for car insurance.

In California, the law requires you to carry at least liability coverage in the limits of 15/30/5, which means:

$15,000 bodily injury coverage per person hurt in a car accident

$30,000 bodily injury coverage per accident in total

$5,000 coverage for property damage liability

This coverage is to protect others in case of an accident where you are deemed to be at fault. However, the minimum limits are very low and are unlikely to be sufficient to cover the expenses of a serious car accident. In this case you could be personally sued for the excess. For this reason it makes sense to carry higher limits of liability coverage.

There is a California which law requires insurers to give the lowest price to the consumer that he or she is eligible for. All companies operating in the state must have a toll-free number and/or a web site with quote capabilities available to consumers in order to meet the requirements of this law.

CA car insurance laws state that when you purchase liability coverage the insurer must offer you uninsured motorist coverage. If you decide against it, you must actually sign a form stating that you have declined this coverage.

Now that you are fully aware of the California auto insurance laws that you need to know, you are ready to start shopping for California car insurance. You can get started quickly and easily by using an online quote tool. In no time, you’ll be comparing a variety of quotes from top CA insurers.

By: James J. Robinson

Illinois Car Insurance Requirements

admin — Mon, 11 Jan 2010 13:06:45 +0000

Illinois Law requires all motor vehicle owners to have minimum amounts of auto liability insurance. In addition, lending institutions may require physical damage insurance to protect their interests in a financed vehicle.

In the State of Illinois the required minimum coverage for bodily injury is $20,000 per person injured in any one accident and $40,000 for all persons injured in any one accident.

The required minimum coverage for property damage is $15,000 for injury to or the destruction of property of others in any one accident.

Optional insurance may include Uninsured Motorist Coverage. The total amount of this insurance coverage must be equal to the bodily injury liability limits, unless specifically rejected in writing. The amount of Uninsured Motorist coverage may never be less than that which is legally required for Bodily Injury Liability Coverage.

Liability insurance will cover bodily injury (costs stemming from injury or death to pedestrians or to occupants in another vehicle) or property damage (costs stemming from damage to another person’s vehicle or property, i.e., fences, trees and buildings) caused by the policy holder’s negligent operation of the vehicle. Additionally, this coverage may also be used if a member of the policy holder’s family or another person with permission to use the vehicle caused an accident. Legal defense in lawsuits may also be covered under this insurance.

Illinois requires liability limits of 20/40/15 which represent $20,000 for bodily injury coverage per person and $40,000 for bodily injury cover per accident which will pay for medical bills and lost wages. The last number of 15 represents $15,000 for property damage coverage per accident which will pay for repairs and/or replacement of objects damaged or destroyed other than the policy holder’s own vehicle.

Personal Injury Protection (PIP) and No-Fault Coverage are not required by the state, however, Uninsured (UM) as well as Underinsured Motorist Coverage (UIM) is mandatory. The UM coverage will pay expenses for bodily injuries caused by a hit-and-fun driver or a driver without auto liability insurance who is at fault. The monetary limits here are $20,000 per person and $40,000 per accident. UIM coverage will pay the difference between the policy holder’s UIM limits and the liability limits of the driver causing the accident if those limits are lower than UIM. This is required only if the policy holder purchases higher limits of UM coverage.

Collision Coverage as well as Comprehensive Coverage may also be required with regard to actual physical damage.

By: Elizabeth Newberry