LIABILITY INSURANCE

HEALTH INSURANCE.

Here is an explanation of these coverages:

PROPERTY INSURANCE

The PROPERTY INSURANCE SECTION of your personal auto policy is further divided into two parts according to the potential causes of damage to you car... Comprehensive Coverage and Collision Coverage.

Comprehensive coverage protects you from damage to, or destruction of, your car, caused by perils OTHER than from COLLISION. Damage caused by FIRE, WINDSTORM, THEFT, FLOOD, or vandalism, is covered by Comprehensive. The term "comprehensive" is used exactly because so many different types of damage are covered. This does NOT cover damage from cold/hot weather, mechanical breakdown or normal wear & tear. You NEED to know what "exclusions" are in your specific policy to know what is covered and what is not.

METHOD OF RECOVERY

The amount of money you will recover from your insurance company if your car is damaged or destroyed will depend on the insurance company’s appraisal of the "ACTUAL CASH VALUE" of your car at the time of the loss. The term "ACTUAL CASH VALUE" is widely used in the insurance industry to mean the cost to repair or replace the property MINUS an allowance for depreciation and obsolescence (Yah right!!!) In actual claim practice, the insurance company will usually pay the cost of repairing your car (minus the cost of your deductible) so long as the cost of repairs does not exceed the "ACV" of your car at the time it was damaged.

THE INSURANCE COMPANY WILL DECLARE A "TOTAL LOSS" AND PAY YOU AN AMOUNT EQUAL TO YOUR CAR’S "ACV" IF THE COST OF REPAIRS EXCEEDS THE "ACV". "ACV" SETTLEMENTS ARE ONE OF THE BIGGEST STICKING POINTS BETWEEN INSURANCE COMPANY & THE INSURED. YOU WOULD PROBABLY NOT BE HAPPY WITH A "TOTAL LOSS" SETTLEMENT FOR YOUR CAR BECAUSE IT WOULD COST MORE THAN THE CAR’S"ACV" FOR YOU TO REPLACE IT!!!

Replacement cost coverage, however, is normally not available for personal automobiles. The best you can do is check with the auto dealer on the current depreciated value of your car and then discontinue COMP/COLLISION coverage when you feel you could pay for a total loss out of pocket.

DEDUCTIBLES Comprehensive and collision coverages are usually sold with a deductible. A deductible is the amount of money you pay out of your pocket before the insurance company pay for the repairs or the total loss of your car. You can save $$$ by getting HIGHER DEDUCTIBLES!!!! Check with your insurance company on the potential savings.

OPTIONAL PROPERTY COVERAGES In addition to comprehensive and collision, there are optional coverages you can purchase for towing and labor costs, and reimbursement for the cost of renting a car while your car is being repaired. These coverages are inexpensive and ALWAYS a good buy!

Towing and labor coverage covers the cost of a tow and the labor cost for repairs at the site of the breakdown. Your coverage WILL have limits on this!

Rental reimbursement is for the costs for any claim under comp/collision. Here again, there is a cap on the $$$ they will cover.

LIABILITY COVERAGE

LIABILITY LIMITS Some policies have one limit for bodily injury and another limit for property damage, while other policies cover both under one limit. It is important that you purchase the HIGHEST LIMITS YOU CAN AFFORD!!!! The average person may never be involved in an accident (unless you live in L.A.) where there are issues of liability, but if it happens, the financial consequences CAN be devastating. There is no upper limit for which you can be held responsible. That is why LIABILITY COVERAGE is the MOST IMPORTANT part of your policy, and mandatory in many states.

You save VERY LITTLE by purchasing lower liability limits, because the cost per $1000 for liability decreases sharply as your limits increase. It is foolish to risk the loss of your assets that you currently have OR hope to have for the sake of a few bucks!!!

WHO IS COVERED? The liability section of most personal policies provides coverage for the person who is named as the insured on the policy, as well as resident relatives of the insured person’s household and all others who drive the car WITH PERMISSION of the owner. HOWEVER, you should check with you company to see if there is an EXCLUSION for you loaning your car to others. Some policies DO EXCLUDE THIS!!!!!

UNINSURED MOTORISTS Your policy may also include coverage for you when you are entitled to collect damages for injuries from the owner or driver of an uninsured automobile. Here in California, this COMES with all policies!!! With uninsured motorist coverage, your company pays your damages because the person responsible for paying you was a schmuck with no insurance. The basic limits for uninsured motorist coverage are usually low, but you can increase them, and should!!

HEALTH COVERAGES

NO FAULT INSURANCE Many states have "NO FAULT" insurance laws. these are laws that were designed to speed up payments to people injured and reduce insurance rates by cutting costs associated with determining fault. You pay yours...they pay theirs. However, after a certain amount has been paid for medical bills, or some other arbitrary threshold has been met, an injured person or their family CAN sue for specific damages, like pain & suffering, mental anguish, permanent disfigurement, or death. If you live in a "no fault" state, there is a separate section in your policy which describes the benefits you are entitled to. It is important that you understand these provisions. Most people do NOT understand what their policy covers.

HOW YOUR PREMIUMS ARE DETERMINED Many different factors go into this. Many states have legislated the order in which considerations for premiums can be determined. Here are the most common factors in how an insurance company determines how much $$$ you will be paying to them:

• AGE
• DRIVING EXPERIENCE
• DRIVING RECORD
• ZIP CODE
• SEX
• MARITAL STATUS
• BUSINESS or PERSONAL USE
• MILEAGE USED

COVER YOURSELF WITH AN INSURANCE UMBRELLA POLICY for that rainy day when an accident happens!

 Unfortunately, we live in a day and age where a traffic accident is considered a financial opportunity, and there are some people out there who's ONLY job is to create a traffic accident. Are you adequately insured against losing all that you've worked hard for....including the computer you are reading this homepage on???

An UMBRELLA POLICY used to be for the rich...now it's for everybody. Professionals find that these policies are a cost effective way of covering themselves for liability...and that's what it is...a LIABILITY coverage. And "excess" liability coverage to be exact. In addition to what you have already covered yourself for, this adds a potential ONE MILLION to FIVE MILLION to your liability policy, thereby reducing the chance you will get sued. For instance:

If you have $100,000/$300,000 liability on your car and your homeowners liability is $100,000, a ONE MILLION DOLLAR UMBRELLA will boost your coverage by that much. It covers you for all liability situations except fire or flood. It can even cover you for slander and other types of lawsuits. (Remember the cabbie in San Francisco who saw a purse snatcher in action....chased him with the cab and then pinned him against a wall with his bumper...broke his legs....he went to jail and then SUED the good Samaritan cabbie for thousands......AND WON!!!!!!!! You'd be covered for this.)

Umbrella policies are VERY affordable, ranging from $100 to $300 per year. Jeez, what a deal. You put an insurance company on the hook for potential millions for a couple of hundies. Also, if you currently have high end liability coverage ($500,000)...you can SAVE $$$ by lowering it to $100,00/$300,000 and get the umbrella. Your premium will be much lower and you'll have MORE COVERAGE! Such a deal.

"Ok, Mr. Traffic, ya say it sounds good....ya say I should get it...WHAT'S THE CATCH.....there's ALWAYS a catch?"

Ok, here it is.....not everyone qualifies for an Umbrella Policy. People with tickets, accidents, D.U.I's won't qualify. Not all insurance companies offer them too. Check with your broker or insurance company and ask about it.

Here in California (I live in L.A.), of the 20 million licensed drivers, the DMV estimates that over 25% are uninsured (probably a half!). What % of the UNLICENSED drivers are uninsured? 100%!!!  That is UNBELIEVABLE....but with the costs so high these days, people say, "Screw it...I'll take my chances" which is one lousy bet here in L.A.. Starting in 2000, a pilot program for the poor is being tried in L.A. & San Francisco to offer ULTRA-minimum liability coverage at low rates (10,000/20,000/3,000).

Make sure you are adequately insured against what you have to lost, OR what you HOPE to have in the future. A judgment can hang over your head for 10-20 YEARS!!! You may not have a pot to pee in today, but what about tomorrow?

Good luck, and stay safe.
Mr. Traffic

 "Let a smile be your umbrella.........if you want a face full of rain."

 Soupy Sales

Here are a list of state insurance commissioners if you have any trouble with your insurance company:
 
 

Insurance Commissioners by State