I interrupt your normal house progress (or lack there of) post for an informative post that everyone should read about auto insurance. Maybe you'll find it boring, but I find the inner workings of any job, and the "behind the scenes," tips and tricks interesting. Plus, these tips can save you big money if you're in an accident.
Working with auto insurance claims has been fascinating. I've learned so much that is so important, but that hardly anyone knows. So, I figured I'd share a few tips...
There is no such thing as a no fault accident.
The roads were bad due to weather, neither party saw the other, the officer said it was a not at accident for both parties- we've heard it all, but regardless, there is no such thing as a no fault accident. Someone is always at fault, and many times fault/negligence is shared. If the roads are bad due to weather, you have a duty to either drive slowly and with extra care due to those conditions, or, if they are still unsafe, even when driving slowly, you have the duty to choose not to drive. As for the officer, he may not write anyone a ticket, but someone was still at fault.
It's not always 100% one person or 100% another person at fault.
Many times there are percentages of liability assigned. It is the job of the liability investigator at both insurance companies to determine who is at fault, and to what degree. Both insurance companies come up with a determination independently, and then duke it out later when recovering the losses paid out. When determining liability, the following pieces of evidence are used: statements from both drivers, the police report, and photos of the damages to both vehicles (the photos are the most important, and your insurance company (or the other, if you go through them directly) will take them when you get your damages appraised).
The officer may have said you're not at fault, but that doesn't mean your insurance company will agree.
The officer wasn't there (at least not typically). (S)He didn't see the accident and doesn't know exactly what happened. (S)He is just going based on what they see and the statements from both drivers. Both insurance companies involved will use the police report as a piece of evidence, but it will not be the only thing considered.
You need to call the police.
Many times they won't come out for accidents without injury, but if you can get the police to come to the scene, you should. There are situations where someone will deny being involved in the accident, and, if they have no physical damage to their car, and you don't have a police report to prove that there were there, you will have a difficult time recovering the losses paid out on your claim.
Where you live has a big impact on what kind of coverage you should have.
Different states have different laws for handling the percentages of negligence assigned in an accident. This can be important when you're deciding on whether or not to have collision coverage on your vehicle. Some states, like Maryland, for example, are contributory negligence states. That means that if you contribute even 1% of negligence to an accident, you do not have the right to recover any losses paid out on your claim. Florida is a pure comparative state, which means you can recover any percent to which you are not negligent from the at fault party. Example- If you are in an accident and the other party is 90% at fault, and you are 10% at fault, you can recover 90% of your damages from their insurance company, and they can recover 10% of their damages from your insurance company.
Quick tip: many people chose to drop collision on older vehicles, but the older your car is, the cheaper the coverage is. Do you really have the money set aside to replace it or put a down payment on a new car? If not, you should have collision coverage.
Can you live without your car for a week or 2? If not, you need a rental endorsement.
When your car is in an accident, and is in the shop being repaired, it's likely that you will still need to get around. Adding a rental endorsement to your policy means that your insurance company will pay for a rental while your vehicle is being repaired as a result of a claim. Do you drive a mini van or SUV? You'll need more than the minimum $30/day for that. You'll likely need $45 or $60/day to cover a comparable vehicle.
Low liability limits could ruin our life.
Let's say something happens. Maybe you have a heart attack while driving and run a red light, or you're jamming out to Shake It Off by Taylor Swift and you don't notice that the person in front of you stopped and you hit them. Shit happens, and sometimes you're at fault. That's why you have insurance, but if you don't have enough insurance, it could negatively impact your life forever. The state minimum in Florida for liability property damage coverage (ie- the money that your insurance company will pay for the other people's property damage) is $10,000. If you total a 2015 Mercedes, you're going to be above that limit. Your insurance company will pay up to your policy max, and anything above and beyond that, the other party can go after you personally for. They can sue you for everything you own, and garnish your future wages. You also need to make sure that your liability bodily injury limits are high. As a rule of thumb, home owners should have at least $100K in liability property damage insurance and at least $300K in liability bodily injury insurance.
Your fancy stereo and rims are probably not covered.
If you have any after market customizations on your vehicle, even those added by the dealership when new, they are not covered under your policy. Your policy only covers items that are permanently installed in your vehicle and come from the factory. Customized equipment and after market ad-ons can be covered if your purchase a customization endorsement.
Recovering your deductible is not an overnight process.
So let's say you're in an accident and you're not at fault, or not completely at fault, and you go through your own carrier. Depending on the type of accident, your insurance carrier will likely have you pay your deductible up front, and then reimburse you for it after they have recovered the losses paid out on the claim. This is called subrogation. It's a legal process, and can take time. We cannot start the process until we have paid out on your claim, and once we do, we will not get anything back from the other insurance company until they have completed their liability investigation. Sometimes, the information they need in order to do so, they don't get until we start the subrogation process. Long story short, this process takes time. Don't worry, we're working on it for you. We want our money back too, and we want to keep you happy, but it's going to take some time, so be patient.
The Better Car Replacement endorsement is worth every penny.
Many insurance carriers offer some sort of Better Car Replacement endorsement. I added it to my policy for like $1.36/month--super cheap. The thought process behind the endorsement is, if your vehicle is in an accident and is deemed a total loss, your insurance carrier will pay for a better vehicle than your vehicle. I'm sure different companies work it differently, but the company I work for pays you for a vehicle that is 1 model year newer with 15,000 less miles. Because the selling price of your vehicle (which is the driver of the value of your vehicle that your insurance company will pay you when your vehicle is totaled) is often going to be less than the replacement cost of your vehicle (think dealer mark-ups), this endorsement can ensure that you get back into what you had.
You need GAP insurance.
The minute you drive your vehicle off the lot, it loses value, but your loan doesn't go down to match that. In fact, the first few years of your loan, you are only paying interest. If your vehicle is totaled in an accident, and you are upside down in your loan, GAP insurance, which is often purchased when you purchase your vehicle and is wrapped into your loan, covers the difference between the value of your vehicle (which is what your insurance company will pay you), and the amount of your loan. If you do not have GAP insurance, you will be responsible for the balance of your loan even though you do not have that vehicle. Suckie!
Your car isn't in mint condition, and it's not worth as much as you think it is.
Unless you purchased your car as new in the last month and haven't done anything to it, your car isn't perfect. There are glass chips, paint scratches, and parking lot dings that you haven't noticed that our appraiser will. Furthermore, the value of your vehicle is effected by where you live, mileage, and condition (like those dings). It's probably not worth what you think it is. And never, ever, tell an adjuster that your vehicle is in mint condition, or they will think you are an asshole, because it is not.
My last tip is to call me when you are in an accident. I can walk you through the process. It's your insurance company's job to do that, but there are flaws in every system- new people, new processes, people who don't explain everything, etc.- I'll be more than happy to help you. :)
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