Auto Coverage 101 Part 2

We are now at the midpoint of this trek through the oh so exciting declaration page of your auto insurance coverage, don't go to sleep quite yet, we have lots of important information for you! Please take a moment, if needed, to get your auto policy so we can get started.

Slowly look at your Declaration Page until you find the information about the vehicles listed on the policy. Each vehicle on your policy will have the following information in or near this area. The year, make, model of the vehicles covered on your policy, as well as the name of the lien holders on these vehicles. Your lien holder will require their information to be provided to your carrier so the loan on your vehicle can be protected up to the value of the vehicle. Note the value of your vehicle may be less than the balance of your loan leaving you owing money to your lien holder. The policy will also list the Vehicle Identification Number also know as the VIN for each of the same vehicles. A VIN is a unique serial number given to each vehicle. No two vehicles will have the exact same VIN numbers. The only vehicles covered by your policy are the ones listed on this page!

Now, we are going to discuss the types of coverage that you can purchase for your vehicle. Your insurance carrier will charge you for each of the coverages I list. The price for each of these coverages will be itemized on the declarations page, by vehicle.

Liability

Look at Liability insurance as the foundation which the other coverages you purchase are built on. Texas requires liability insurance to be on all vehicles driven on a public road. Liability insurance protects people who are injured and property that is damaged from an accident where you are at fault. In all the years I have handled insurance claims I rarely ever heard anyone say they are at fault for an accident, even a lady that hit the concrete pillar supporting a sign in a parking lot thought it wasn't her fault, which is why adjusters and the courts decide this issue.

Your policy has limits which usually look like 30,000/60,000/25,000 or 30/60/25. This first number, $30,000.00 is the most amount the policy will pay out to any one person injured in an accident which you are at fault. The second number, 60,000.00 is the total amount your policy will pay out if there are two or more people claiming injuries in an accident which you are at fault. Regardless of the amount of people injured in an accident which you are at fault for, no one person can ever get more than $30,000.00, and your policy will not pay more than a total of $60,000 if two or more people file claims  The last number, $25,000.00 is the most your policy will pay on property damage. It usually involves the other vehicle(s) which were damaged as a result of your at fault accident, but it can include buildings, fences, grass, etc. If it belongs to someone else and you damage it, your policy will pay up to the max limit of $25,000.

Texas requires a minimal coverage of 30/60/25, but you can elect to purchase more coverage to protect yourself. The following point is extremely important, if the costs of any bodily injury claim(s) or property damage claim(s) are more than your policy limits, those claimants have the right to sue you directly for the amount above your policy limits! This will involve an accident that results in death, dismemberment, disfigurement or a permanent impairment, really serious stuff.

You notice Texas requires that vehicles have liability insurance not the driver. Drivers are only required to have a valid drivers license from their state of residency. Something to be aware of; In Texas, an at fault driver can not collect against the liability portion of their own auto policy for their injuries or damage to their vehicle. The insurance company had this put into effect to entice you to spend more on the additional coverages, which are optional in most cases.

Comprehensive

Sometimes called comp for short, this usually covers damage to your vehicle where you are not at fault. These might include things like hail, vandalism or Dorothy's house dropping on your car. Your policy will list the events that are covered under this portion of your policy (this list is NOT on the declarations page but is listed later in the actual policy language). If your vehicle has a lien on it (you will know this is the case if you are sending someone a payment on the vehicle) you are required to carry comp on the vehicle along with Collision, the next coverage discussed below.

Collision

Collision is coverage that has nothing to do with fault, neither yours or another parties. You can have your vehicle repaired minus your deductible. Deductibles are the amount you will contribute toward the repairs of your vehicle or if your vehicle is not repairable and totaled you will receive the value of your vehicle minus your deductible. If you are in an accident and the other party is at fault but their carrier is giving you the run around you may elect to have your vehicle repaired through this coverage on your policy, so your vehicle can get repaired sooner. If this is the case you must pay your deductible, but you can pursue the at fault carrier for the reimbursement of this expense.

Uninsured  Motorist

Property Damage

If you are in an accident and the at fault party does not have any auto insurance to pay for damage to your vehicle, your carrier will take the place of the at fault person and pay your damage claim minus that good 'ole deductible. Even though Texas requires drivers to carry liability on their vehicles The Texas Department of Insurance estimates that 17-26% of drivers do not carry any auto coverage. Click here if you want to read more about this. This is a good reason to at least look at adding this coverage to your policy.

Bodily Injury

If you are in an accident and the at fault party does not have any auto insurance policies to pay for the medical costs for your injuries from the accident, your carrier will take the place of the at fault person and pay to settle this claim, minus that good 'ole deductible. As a Claims Adjuster, take my word on this; if you do file a Uninsured Motorist claim of any type, you MUST call your assigned adjuster regularly, speak with them directly and ask for detailed updates on your claim. If you do not, the adjuster will do little with your claim.

Underinsured Motorist

As the name implies Underinsured Motorist covers your vehicle if an at fault party does not carry enough coverage to repair your vehicle. Lets say a driver from Arkansas hits you and does $18,000 in damage to your vehicle but they only carry $10,000 in coverage their insurance will only pay $10,000 leaving you with $8,000 to pay out of your own pocket. Underinsured motorist relieves you of this burden and picks up the tab, minus your deductible. Some carriers put uninsured and underinsured motorist together in one package, others split the coverage so be sure to ask your carrier specifically about this. Do you have a headache yet? I know I do.

Rental

If your vehicle is not working due to something covered under your policy, you can get temporary transportation. This coverage pays a max of X dollars per day usually for a total of 30 days. Your policy will show you the daily rate your carrier will cover. You can sometimes get more on the daily rate allowance but you will have to pay more in premium on your policy to get it, make sure you have enough to cover the cost of what ever vehicle you will need. Please take care of this before you are in an accident, otherwise you will be stuck at the lower per day amount. For example, we drive a minivan to haul around our large family, we could never fit into a compact car so we have rental coverage at a rate that will get us a minivan or SUV while our vehicle was being repaired. Also, most policies will not allow you to use all 30 days, if your vehicle is totalled. The policy usually says after your carrier has made you an offer to settle your collision or Uninsured Motorist Property Damage claim, they have the right to end your rental coverage.

On a third party claim (a claim against someone else's insurance company) you are entitled to a same/similar vehicle. You do not have to accept their offer of a low end vehicle if you drive a higher end vehicle. The carrier may tell you they do not pay more than X dollars a day for rental coverage, however Texas Department of Insurance (TDI) views this matter otherwise. Test them on this by requesting a copy of the language on the policy that confirms their daily rental rate, if they won't or can't do this, let the adjuster know you will be filing a complaint with TDI  and in most cases they will cave in and you will win.

Your mission today, should you choose to accept it, examine your auto policy and determine the amount of the deductible you will be responsible to pay when someone decides that they want your car combined with theirs. Then examine your finances and see if you have this money readily available when this blessed event occurs.

And remember, when the day that you are involved in a car accident (whether you are the driver or as a passenger) please don't hesitate to contact us,. We will be glad to assist you in recovering the largest settlement you are entitled to. Why hire an attorney when we can assist you and you wind up with more money in your pocket?!

Visit us at VillarrealInsuranceServices.com to learn more about our services and be sure to like us on Facebook at facebook.com/villarrealinsuranceservices or follow us on Twitter @VIStheInsGame.

Auto Coverage #101

We're going to go through the different types of policies one by one. We are starting with auto since, #1 we have to start somewhere and #2 the great State of Texas says you have to have an auto policy if you have a car.

Test time! Did you complete your mission last week? If so your ready, please take a moment and get you auto policy (not your insurance card) so we can start.

Let me give a quick word picture to explain coverage to you. If we look at a square drawn on a piece of paper we see an area within the boundries of the square and an area outside of it. The things inside the square are the items covered by your policy. The things outside the square are the items that are not covered by you policy. Then, we have the actual boundry itself that seperates the items inside the square from the items outisde the square. We will call this the "grey area" that is when the carrier does what's called a Coverage Investigation but for now we will focus on the items in our box.

Slowly, look the the top portion of the first pages on your auto policy until you see what's titled-Declarations Page. This is our starting point so let's hold our nose and dive into this very important page. This page gives you a simple and quick breakdown of the coverages you have paid for on your policy. Slowly look at the Declarations Page and you will find the name and address of the actual company that issued the policy. This page may also have the phone number(s) to call if you are in an accident. A good suggestion is to put this number in your cell phone so if you are in an accident you can call them immediately. It cuts down on the stress and hassle which you find yourself immersed in after an accident.

Now look for the policy number, it may be made up of numbers, letters or combination of both. Your policy number is a unique identity like a serial number. If you renew your policy and it does not lapse then you should maintain the same policy number. If this information can go into your cell, put it there so you can refer to it if you are in an accident. 

In Texas, auto policies are usually written in six month periods. These timeframes are usually called the "Coverage Period" of your policy. It shows the date the coverage on your policy started and the date it will end, if it is paid timely!!! You will notice the time of 12:01 AM which means at one minute after midnight on the date your policy ends so does your insurance coverage.  If you have an accident at 12:00:59 you are covered, have an accident at 12:01:00 and you are not!

There are names listed on your Declaration Page. Usually, the first name listed is the person the auto policy was actually issued to. However, while my wife is listed first on our policy, our policy lists both of us as "Named Insured". You may also see other names listed on your policy. These are usually named, Additional Drivers. These are people who are covered by the policy and allowed to use your vehicle.

Your mission this week, should you choose to accept it, grab your smart phone and educate it on your insurance information so you will have it when you need it most. Next week, we will walk through the different types of things you can pay to have covered on your auto policy finishing up our work with the Declaration Page.

What is a policy?

What is an insurance policy? Do you know? Most people have no idea, they just know they are required to have one.
Quite simply, a policy is a contract between you, refered to as the insured or the policy holder and the actual company that issues the policy to you, called The Carrier.

This contract identifies the name(s) of the person or people the carrier has agreed to protect if an incident happens. It also outlines the coverages you are afforded, we will discuss this in more detail next time.

Sadly, most people don't know where they put the policy their carrier sent them, much less what it says. Why? Because reading an insurance policy is like going to the dentist, you'd simply rather do anything else.

Your mission today, should you choose to accept it, gather all of your insurance policies and put them in a safe place. You'll need it next week to solve the coverage mystery.

Manny

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