Tag Archives: auto insurance

car keys 3Most of us have lent our cars to friends and/or family members at one time or another. Whether they needed to go to the store, were visiting from out of town, or had their own car in the shop, our mobile castle was theirs for the borrowing. But did you give any thought to whether or not they were insured – their own policy or yours?

Most auto policies allow for permissive drivers, that is, drivers operating your vehicle with your permission. Often, their own auto policies will follow them while driving another vehicle. However, your coverage would be considered primary. Their insurance may cover some medical expenses and possibly supplement if your limits are maxed out.

What you need to watch out for are people driving your vehicle who should be on your policy. For example, your sister is visiting for a week or so from out of town. She will likely be covered. However, if that same sister is moving here and staying at your place until she finds a job, which is a different story, especially if she is using your vehicle to go on job interviews. If your assistant uses your car to run errands for you, he/she needs to be on your policy.

If you have teenage drivers living in your home, you are sometimes forced to add them to your policy. Otherwise, they will be specifically excluded from driving any of your vehicles.

Just something to keep in mind: California Vehicle Code Section 1715 states: “Every owner of a motor vehicle is liable and responsible for death or injury to person or property resulting from a negligent or wrongful act or omission in the operation of the motor vehicle, in the business of the owner or otherwise, by any person using or operating the same with the permission, express or implied, of the owner.”

Before you turn over the keys to your car, check with your insurance professional to see if your auto policy covers permissive drivers. More importantly, how much it will cover someone borrowing your car.

auto accident 1There are a lot of vehicles on the road. If you have spent any time on the freeway, this is not news to you. Some people are careful drivers, some are, let’s say, less than aware that there are other cars sharing the road. One of the reasons why you have auto insurance is because of careless drivers. Of course, sometimes such carelessness extends to a lack of insurance on their part. Should you be the one involved in the inevitable accident these moronic drivers will be in, will you be covered?

According to the Insurance Research Council (IRC), one driver out of every seven drivers in the United States is currently uninsured. This is especially startling considering that an accident with an uninsured or underinsured driver can result in significant costs that aren’t covered by a basic liability insurance policy.

The State of California mandates liability limits for auto insurance be 10/20/3 for low cost auto insurance policyholders. For regular drivers, it’s 15/30/5. The first number is medical payments per person in an accident, the second is total payments for everyone in a single accident, and the third payment is total property damage payment.

Uninsured and underinsured motorist coverage is designed to help you pay for bills associated with a crash that was caused by another person who either doesn’t have an auto insurance policy or has a policy with liability limits that are too low to cover costs associated with a covered loss.

As with any insurance questions, your best resource is your insurance professional. Take a few minutes to meet with them and explain your concerns. They will make sure you have all the coverage you need at a price you can afford.

classic car 3A standard auto insurance policy is pretty straightforward with what is and is not covered. Alterations, expensive sound systems, custom wheels, etc. all require extra coverage. But there is a point where your vehicle will need an policy independent of your auto insurance.  If you own a classic or vintage vehicle, you may want to consider additional coverage.

While there is no standard rule of thumb when it comes to a definition of classic cars, there are a few points to consider. If a car’s value exceeds its original selling price, then it might be considered collectible. A “classic” or “antique” vehicle is usually at least 25 to 30 years old. Many modified vehicles, particularly high performance “hot rods” should carry extra insurance, as should exotic or super-luxury models. Vintage military vehicles, classic motorcycles and antique tractors are also candidates for classic car coverage.

In order to qualify for a classic car policy, there are a few common criteria noted by the Insurance Information Institute: Limited Use—Your classic car cannot be used for everyday commuting or errands; Car Shows and Meetings—The ‘limited use’ provision of a classic car policy allows for travel to car shows and auto club meet-ups; however this coverage may be restricted by some insurers. Secure Storage—When not in use, your special vehicle must be stored in a locked, enclosed, private structure, such as a residential garage or storage unit; and Clean Driving Record—You may be disqualified from classic auto insurance if you have serious offenses on your driving record, such as reckless driving, repeat speeding violations or driving while intoxicated.

Before you obtain a classic car policy, you will need to reach an agreement on how much your vehicle is worth. This will be specified in your policy until any changes are made. You’ll want to be sure your policy allows you to use a specialized mechanic or body shop, as well as towing and the ability to obtain specific spare parts.

As with other insurance questions, you will want to speak with your insurance professional. Take a look at your current auto policy and compare it to what shape your vehicle is in now. Sometimes people make assumptions about their coverage, only to find out that they cannot claim a theft or loss. Be sure now rather than be sorry later.

teendriver3

A good way of looking at your teenager receiving their driver’s license is less chauffeuring you’ll need to do. There can be little doubt that your eager new driver will be happy to take the family sedan out on whatever errand you need them to run. Plus, they will say, you don’t have to be bothered with dropping them off or picking them up. Great news for you, right? Of course, the cost for all this freedom – besides extra trips to the gas station – is an adjustment on your auto insurance policy.

Nearly all insurance companies require that all members of your household that are licensed drivers be added to your auto policy. If you have several vehicles, you can add drivers to individual vehicles, ideally those that are the least expensive to insure. You can also exclude drivers, but that means they are specifically not covered for anything that happens while driving your vehicle. This could also be cause for cancellation should something occur.

As far as your teen drivers go, you’ll want to let your insurance professional know when he or she gets their learner’s permit. They won’t necessarily need to be listed on your policy until they are fully licensed. If you do not have primary custody of your teen, you may not need to add them as a household driver. You should check with your insurance professional to be sure.

Another option is for your teen driver to have their own vehicle. Just bear in mind that premiums for teen drivers are high as it is. Insuring a separate vehicle may cost more than adding the vehicle (and driver) to your policy. Also check to see what sort of discounts (good student, driver’s education, etc.) there may be available.

There are systems available for monitoring driving behaviors — speeding, seat belt usage, hard braking and cornering – that can send you a notification if your teen does something he or she is not supposed to do. Technology is available that blocks cell phone calls and text messages when a vehicle is in motion. Installation of any of these systems could mean a premium reduction.

There is no substitution for discussing this new policy need, as well as any others, with your insurance professional. They are an excellent resource for all things insurance-related and can help you to find the coverages you need at a price you can afford.

single car accident 3Like other responsible drivers, you carry the appropriate auto insurance coverage. You know the state mandates a minimum level of liability coverage, but you have way more than that to cover “the other guy.” But what about your own about your own vehicle and its contents? That is what comprehensive and collision insurance is for. For this blog entry, we will focus on collision coverage.

Collision insurance covers some or all repairs or replacement costs to your vehicle due to an accident with another vehicle or if you hit another object (tree, wall, etc.), if you are in an accident with another vehicle, drive into an object such as a tree, building, or telephone pole, or other types of damage. You are not required by law to carry collision coverage, but if your car is financed, your lender will almost always oblige you to have that insurance.

If you opt not to purchase collision coverage, your lender can do it for you, something called “forced placed” insurance and charge you a premium along with your monthly payment. Collision insurance covers the vehicle, not you, and that’s what the lender is concerned with. Premiums for this type of insurance can cost up to five times more than if you had purchased collision coverage through your own insurer.

To figure out if you need collision coverage on a vehicle that is paid off, first calculate its value using a resource like the Kelley Blue Book. Then think about whether or not you can afford to replace your car on your own, remembering that the insurance company will only pay you how much it’s worth, less any deductible.

If you currently have collision insurance but are considering dropping it, you will save some on your premium. To a large extent, the cost is based on your driving history, the value of your vehicle, and the size of your deductible. If you have been in more than a few at-fault accidents, you are probably paying a higher premium for that coverage. Depending on the age and condition of your vehicle, it may make sense to reconsider.

It is always a smart move to discuss all of your coverage needs with your insurance professional. They can explain which coverages you currently have, which ones may not be necessary anymore, and which ones you are lacking.

Man breaking into car

As a diligent driver and vehicle owner, you carry full coverage on your vehicle. In the event it is stolen, you know you will be able to replace it (minus depreciation and deductible). If there is something inside or on the vehicle that is stolen, that will be replaced, too.  Right?

Most people know that if your vehicle is stolen, the theft coverage from your auto insurance will help pay to replace it. The contents are a different story. The comprehensive portion of your auto insurance is what pays for non-accident-related losses. Unfortunately, the coverage only extends to the vehicle itself and not its contents. If you leave personal property in your vehicle, such as a laptop, cell phone or even your wallet, you may be out of luck.

There are a few things to consider when thinking about personal items in your vehicle and whether or not they would be covered in the event of a loss:

  • Is an item permanently attached to your car? If it is easily removed or portable, it wouldn’t be considered permanently attached and not covered by your auto insurance.
  • If an item is permanently attached to your car, but not original equipment (expensive stereo, aftermarket equipment, etc.), you probably need additional coverage. This is especially true with custom vehicles.

If you have homeowner’s or renter’s insurance, items stolen from your vehicle should be covered. Naturally you will need proof you actually owned the lost items, most commonly a receipt. You will likely need to file a police report and follow the claims process, but at least you can get your property replaced. When considering whether to file a claim, remember that your homeowner’s policy probably has a higher deductible than your auto policy.

Having insurance coverage can bail you out of some pretty big jams. Homeowners, auto, health, marine, etc. can all make a big difference in your financial well-being. Of course that’s if you have the right coverages. Why not meet with your insurance professional to make sure that you do.

pocket money 3You get into a little fender-bender in your car. Not too much damage but you decide to turn in a claim. All the appropriate estimates are obtained and your insurance company pays for the repairs no problem… except for your deductible. Doh! You forgot about that.

Just to refresh your memory, a deductible can be either a specific dollar amount or a percentage of the total amount of insurance on a policy. Logically, the higher your deductible is, the lower your premium will be. Since you are shouldering more of the risk, you pay less up front.

Here is how it works: if you have a $500 “dollar deductible” and a $2,000 claim, the insurance company would pay you $1,500 ($2,000 – $500). This type of deductible is common for auto insurance and homeowners insurance. “Percentage deductibles” are calculated differently.

In the case of a homeowners insurance claim, the deductible is based on a percentage of the home’s insured value. So if your house is insured for $100,000 and your insurance policy has a 2 percent deductible, $2,000 would be deducted from the amount you are reimbursed on a claim. In the event of the $10,000 insurance loss, you would be paid $8,000.

Deductibles are different in health insurance where there a single annual deductible for the policy. With an auto or homeowners insurance policy, the deductible applies each time you file a claim.

For earthquake insurance, California residents can purchase a policy through the California Earthquake Authority (CEA). The standard CEA policy deductible is 15 percent of the replacement cost of the home. The CEA also offers a 10 percent deductible for other structures, personal items coverage up to $100,000 and $15,000 in “loss of use” coverage.

For more information on deductibles, how they affect your premium, and any other questions you may have, make an appointment with your insurance professional. They will explain all facets of your policies and help figure out how you can obtain the coverage you need at a price you can afford.

gap 4Thinking about trading your old clunker for a better model? You know you probably won’t get anything for your current heap, but the dealership is offering extended financing and zero down payments, so you figure “what the heck.”  But as you are signing your loan documents and getting your insurance in order (full coverage, you know), you may want to consider gap insurance.

If your car is totaled or stolen, gap insurance will cover the “gap” between how much your car is worth and how much you still owe on it. Say you are driving around a vehicle with a market value of $20,000. Since you still owe $23,000 on it, that extra $3,000 (plus any applicable deductible) is coming out of your pocket. Now gap insurance won’t pay the deductible, but it will cover the $3k.

According to the Insurance Information Institute (www.iii.org), you should consider purchasing gap insurance if you: Made less than a 20 percent down payment; Financed for 60 months or longer; Purchased a vehicle that depreciates faster than the average; or Rolled over negative equity from an old car loan into the new loan.

For a leased vehicle, gap insurance may make the most sense. Since you are not paying the vehicle off, just paying to use it (in a sense), those payments will be smaller than those for a conventional car loan. Less vehicle equity will be paid and the gap between what the car was worth new, what it is worth now, and how much you have paid on it.

When you are discussing full coverage options with your insurance professional, also mention gap insurance and if it is right for you.

medical insignia 1We all buy our auto insurance like the responsible drivers we are. Some opt for minimum liability coverage as required by California law and others decide that 15/30/5 isn’t enough. Especially when a minor fender bender will probably cost more than the $5,000 in property damage a minimum limits policy will pay for. What about the other two numbers? Do you believe $15,000 per person and $30,000 per accident is plenty? Remember this coverage applies to the “other guy.” You are not covered at all.

There is also another coverage called Medical Payments to Others, or “Med-Pay.” This is an additional coverage some people consider dropping to save money on their auto insurance premiums.

Med-Pay will cover your medical bills up to your coverage limit for you, your family and others involved in an accident which riding in your vehicle. This coverage moves with you — walking, riding in another vehicle, or on public transportation — and with your insured vehicles, regardless of who’s driving. Policy limits refer to the uppermost financial coverage available to each covered injured individual, and not a total limit.

There is also another coverage called Personal Injury Protection (PIP) that is similar to Med Pay in that both coverages will pay for physical injuries caused by an accident and because neither is concerned with who was at fault. PIP is more comprehensive but can be more expensive than Med Pay.

Remember that Med Pay only covers injuries pertaining to a particular accident and is in no way a substitute for personal health insurance. In fact, many insurers require that Med Pay limits be exhausted before your health insurance kicks in.

Talk to your insurance professional to see what coverages you are lacking, but will be happy you have if need be. Most people don’t worry about insurance until they need it. Of course, then it is too late to discover you are underinsured, or not insured at all.

auto accident 4Bodily injury coverage can help pay for medical expenses and funeral costs to somebody who is hurt in an accident you cause. Bodily injury coverage does not pay for your own injuries. Additionally, bodily injury coverage can help pay for long-term nursing care, lost income from time off work, and “pain and suffering.”

Bodily injury coverage consists of the following: Limit per person – The maximum amount your insurance will pay out for bodily injury to a single person in a car accident.

Limit per accident – The total maximum amount your insurance will pay out for bodily injury if multiple people are hurt in a car accident.

Basic auto insurance is broken down into three figures. For the California state minimum those numbers are 15/30/5. That means policyholders have bodily injury coverage for $10,000 with one claim, $20,000 worth of coverage for multiple claims with the same accident, and $5,000 for any property damage caused by the at-fault driver.

According to a 2013 report by Rocky Mountain Insurance Information Institute (www.rmiia.org). the average auto liability claim for bodily injury was $15,443. That means you would be on the hook for about $500 if  there was only one injury. Two injuries with minimum coverage will take $1,000 out of your pocket. Remember this is an average. In our whiplash society filled with personal injury lawyers happy to exploit what they hope is a lawsuit lotto.

The best way to insure you have the correct coverage is to speak with your insurance professional. He/she has a wealth of resources available to bring you the best protection for you at a price you can afford.