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Automobile FAQs
 
When purchasing automobile insurance what should I consider?
Suppose I lend my car to a friend, is he/she covered under my automobile insurance policy?
What is the difference between collision physical damage coverage and comprehensive physical damage coverage?
What factors can affect the cost of my automobile insurance?
If I have a loan on my car, do I need GAP insurance?
How can I lower my automobile insurance rates?
Uninsured Motorist Coverage: Do I Really Need It?
What is the difference between Uninsured and Underinsured Motorists Coverage?
What are Uninsured Motorist Bodily Injury and Uninsured Motorist Property Damage Coverages?
Do have I coverage if my cell phone is stolen from car?
Umbrella Liability - Why have it?  What is it?  Who needs it?
 
The answers to all these questions are below......
 
When purchasing automobile insurance what should I consider?
 
There are several things you should consider when purchasing automobile insurance that your independent agent will help you with. Here are a few: 
  • Purchase the amount of liability coverage which makes sense for you.
  • Select the optional coverages you want.
  • Decide which company to purchase insurance from.
  • Don't base your decision solely on price. Other factors like service and claim response are extremely important in selecting the right insurance.
Suppose I lend my car to a friend, is he/she covered under my automobile insurance policy?
 
Whenever you knowingly loan your car to a friend or an associate, he or she most-likely will be covered under your automobile insurance policy. In fact, even if you do not give explicit permission each time a person borrows your car, they most-likely are covered under your automobile insurance policy as long they had a reasonable belief that you would have given them permission to drive the car.  If your not sure what your policy's exact responsibilities are under these conditions, you will want to review the "definitions" section of your policy.
 
What is the difference between collision physical damage coverage and comprehensive physical damage coverage?

Collision is defined as losses you incur when your automobile collides with another car or object. For example, if you hit a car in a parking lot, the damages to your car will be paid under your collision coverage.

Comprehensive provides coverage for most other direct physical damage losses you could incur. For example, damage to your car from a hailstorm will be covered under your comprehensive coverage.

What factors can affect the cost of my automobile insurance?

A number of factors can affect the cost of your automobile insurance - some of which you can control and some which are beyond your control.

The type of car you drive, the purpose the car serves, your driving record, and where you live all affect how much your automobile insurance will cost you.

Even your marital status can affect your cost of insurance. Statistics show that married people tend to have fewer and less costly accidents than do single people.

If I have a loan on my car, do I need GAP insurance?
 
Whether you lease your car or have an outstanding auto loan, GAP insurance can provide valuable protection during the early years of your car's life. As we all know, a new car's value drops the minute you drive it off the lot. And unfortunately, if a bus plows into the side of your new car five minutes after you drive it off the lot, your insurance only covers the actual cash value of the car. At this point, there's a good chance the insurance payoff isn't enough to pay off your outstanding lease (or loan) balance.
 
GAP insurance was created for just such a situation. If a loss occurs (theft, total loss in a collision, etc.), GAP insurance will pay the difference between the actual cash value of the vehicle and the current outstanding balance on your loan or lease. Some lenders and lessors actually require you to carry GAP coverage until the outstanding loan/lease amount drops below the value of the vehicle.
 
GAP insurance is typically not very expensive, since the coverage amount is relatively small. However, the cost will vary depending on the type and value of the vehicle you purchase.
How can I lower my automobile insurance rates?

There are several things you can do to lower the cost of your automobile insurance. One way is to look for competitive pricing. An independent agent works with many companies and can provide you comparative rates and insure that your are getting the same coverage.

Another way to lower the cost is to change your deductible. By raising your deductible you may lower the cost of your automobile insurance almost 10% You must be able to pay the deductible amount in case of a claim. You can also look for discounts that you may be entitled to. Some examples of discounts that may be available are: multiple cars under the same policy, carrying a homeowners policy with the same insurance company, different groups or associations.

Uninsured Motorist Coverage: Do I Really Need It?

You're driving your son to soccer practice when you are rear-ended at a stop sign.  Dealing with the initial trauma of the accident and injuries and the subsequent disruption of a period of medical recovery and the inconvenience of car repairs is bad enough.  What if the injuries are serious?  And what if the at-fault driver has no insurance?  Where do you turn?

This is where your Uninsured Motorists (UM) Coverage comes into play.
What is UM Coverage? Uninsured Motorists coverage is defined as coverage that "pays the policyholder and passengers in his/her car for losses sustained by reason of bodily injury ... caused by the owner or operator of an uninsured automobile or a hit and run driver."

Many people wonder if UM is really necessary. After all, isn't liability insurance mandatory? How can there be any uninsured drivers out there? The problem is not everyone obeys the law. A recent study showed that of over 11 million registered drivers, 7% of those drivers convicted of moving violations in a recent six-month period were found to have no insurance. That's a frighteningly high number!

Others question the necessity of UM in light of the fact they have very comprehensive medical coverage.  In the event of an accident with an uninsured driver, they assume their own medical coverage will fully protect them.  Yes, medical insurance would likely cover most medical expenses.  But it will not generally compensate the injured person for lost wages, disfigurement, pain and suffering, mental anguish, and changes in quality of life.  For a person permanently disabled following an accident, even things such as modifications to make a home and a vehicle more accessible can cost tens of thousands of dollars.  UM can compensate the victim in these broader areas.

There are ways insurance dollars can be saved, but paring down or going without UM is one we strongly discourage.

What is the difference between Uninsured and Underinsured Motorists Coverage?

Underinsured Motorists Coverage covers you and passengers in your car for "losses unpaid because sufficient bodily injury liability limits are not available from the policy of an at-fault driver." In other words, Uninsured Motorists covers you if the wrongdoer has no insurance while Underinsured Motorists covers you in the event that the wrongdoer has some coverage but not enough.
 
What are Uninsured Motorist Bodily Injury and Uninsured Motorist Property Damage Coverages?
 
It is estimated that one out of every 20 motorists is driving uninsured.  Although this figure represents only 5% of today's drivers, uninsured motorists are responsible for approximately 13% of all auto accidents. If you become involved in an accident with an at-fault driver of an uninsured motor vehicle there are coverage options available to ensure that you are adequately protected:
 
UMBI- Uninsured Motorists Bodily Injury Coverage provides bodily injury coverage for you and for the occupants of your vehicle.  Most policies already provide this coverage.
 
UMPD- Uninsured Motorists Property Damage provides coverage for your vehicle. Vehicles without collision coverage have no protection for damage resulting from an accident with an uninsured driver.  If the optional UMPD coverage is added to your policy and you find yourself tangled in an accident with the at-fault driver having no insurance, you won't be left to pay for the damage to your car out of your own pocket.
 
Do have I coverage if my cell phone is stolen from car?
 
Since many of us now have cellular telephones, we thought it might be worthwhile to highlight a few points regarding how insurance applies to this technology: 
 
If a cellular phone is stolen from your car (or along with your car if it is stolen), is the phone covered by your auto insurance? 
No, it is not unless the phone is permanently installed and powered by the car's electrical system. 
 
Is your cell phone covered by your homeowners or renters insurance?
Sometimes it is, but coverage is subject to the policy provisions and deductible in your homeowners or renters policy. 
 
If you own a cell phone, check with the company you purchased the phone from to see what (if any) coverage they may provide. You may then want to check with us to compare coverages and cost.
 
 
Umbrella Liability - Why have it?  What is it?  Who needs it?
 
Skyrocketing court settlements and medical costs can cause uneasy feelings about the adequacy of insurance protection.  Liability insurance pays for injuries to others due to negligent acts by you or another covered person on your policy.  Although the liability insurance provided under a home or auto insurance policy is adequate for most situations, in a few instances large lawsuit settlements do approach or exceed the limits of these policies.
 
An umbrella liability policy is designed to give you peace of mind from this concern.  It adds one million dollars (or multiples of $1 million) of protection to the liability limits of your home and auto insurance policy.* Should a judgment against you exceed the limits of that policy, the umbrella picks up the unpaid portion up to the umbrella policy limit.
 
Persons most likely to purchase an umbrella policy are:
  • "Likely "targets" for a large lawsuit--professionals, business owners, property owners, higher income individuals, etc.
  • Those who want greater peace of mind knowing that their life savings will be protected from a financially devastating lawsuit.
Coverage cost varies, but it is generally $200 to $250 per year for a $1 million limit. 

*The umbrella can also increase the liability limit for your boat, rental property, motor home, recreational vehicle, motorcycle, vacation home and others.
 
 
 
 
 


 

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