Auto – Boat Insurance
Please Note that as to any insurance issue involving a substantial amount of money we strongly urge you to speak with an attorney. For a free consultation with a lawyer located in the area of your choosing, CLICK HERE.
Types of Auto Insurance
Auto insurance coverage varies by state, where one of 2 types is offered to motorists: “At Fault” and “No Fault.” In an “At Fault” state, the driver determined to be at fault is responsible for damages. In a “No Fault” state, the bodily damages are generally paid by each driver’s own insurance. (There are some exceptions.) In the event of extensive damages ($100,000 or more) it is advisable to speak with an attorney as soon as possible. Even at a lesser amount of damage, you may wish to speak with an attorney.
Auto Insurance Issues can arise over:
- whether a driver was a “permissive user” of the automobile;
- whether the car was being operated for an excluded (e.g. “commercial”) purpose;
- whether the first party (the insured) or the other driver’s (third party) damage assessments are reasonable;
- whether the amount of the liability, under-insured motorist, uninsured motorist or other insurance coverage in place is adequate, and if not, who is responsible.
- whether any material* misstatements or misrepresentations were made by the insured on the policy application, and if so, to what effect.
A material misstatement is a statement or comment made regarding important or relevant information that is untrue. Take care when making any statement regarding your accident to the parties involved, the police, or the insurance companies.
Liability Coverage in No-Fault States
In most no-fault states, each drivers’ insurance pays for their own bodily injuries. You cannot sue for your own injuries unless:
- your expenses arising from bodily injuries exceed the dollar amount listed in the no-fault statute;
- you or someone in your automobile suffers a specific injury listed in the no-fault statute; or
- a death is caused by the accident.
In most no-fault states, the person who caused the accident is still responsible for paying for everyone’s property damage. The amount of your no-fault protection depends on your personal financial circumstances. But it should be sufficient to cover the potential losses you would experience.
Liability Coverage in Fault States
Liability coverage in no fault states pays up to the dollar limits of your coverage, for the other driver’s injuries and property damage, when you are at fault in causing an accident.
Liability insurance should cover:
- the victims’ present and future medical bills;
- the victims’ property damage;
- the victims’ present and future loss of earnings;
- the victims past and future mental and physical pain and suffering;
- the victims’ other damages resulting as a consequence of an accident; and
- your legal expenses and costs if you are sued as a result of an accident.
Amount of Liability Coverage to Buy
If you are found responsible for a serious accident liability insurance will protect your assets. To ensure your coverage is adequate. You can estimate the value of your assets by adding to value of your:
- equity in a home and/or other property,
- retirement accounts,
- equity and assets in a business owned by you or your family,
- wages, stock options or other assets from your or your family’s workplace or profession,
- spouse’s assets,
- all other assets.
In a serious accident liabilities can include past and future medical treatment, loss of income, loss of earning capacity, and past and future pain and suffering. Your potential losses could easily be in the millions of dollars. If your liability insurance is not sufficient to cover that, your assets could be at risk. This could be devastating to you and your family. Umbrella insurance for homeowners could add additional coverage to your automobile insurance.
Collision Coverage pays for damages you cause to your car as a result of a collision with a car or object. It pays up to the limits of your coverage, after you pay your deductible. For example, if you back into a wall causing $2500 in damage and you have collision coverage with a $1000 deductible, your company will should $1500.
Comprehensive Coverage pays for damage to your automobile
when the damage is caused by anything other than a collision, such as theft, fire, tornado, lightning, etc. Again, it only pays up to your limits and your deductible is your responsibility.
Physical Injury Coverage
This pays, up to your limits, for your own medical expenses and those of anyone else in your car.
Physical Injury Coverage usually does not pay for the other driver’s personal injuries or those of his or her passengers. (See Liability Coverage.)
In a “fault” state, if the other driver was responsible for the accident, you may choose to file a claim with his or her insurance company. This is called a third party claim. Third party claims pay for more types of losses because the victim is entitled to “all damages actually caused,” including lost wages, pain and suffering, and other damages.
Uninsured Motorist (UM) Coverage
Uninsured Motorist Coverage (UM) pays, up to the policy limits, for your injuries caused by an uninsured driver. Some states require UM coverage.
Underinsured Motorist Coverage (UIM)
Underinsured Motorist Coverage pays you for damages you suffer that are more than the policy limits of the other driver. For example, if the driver that caused the accident has minimal insurance coverage, your UIM insurance would pay up to the coverage level of your UIM coverage. Your insurance company may seek to recover as much as possible from the underinsured driver, but it must pay you directly, up to the policy limits of your UIM coverage. Some states require UIM coverage.
Miscellaneous Auto Insurance Coverage
Additional types of coverage may also be purchased, such as:
- labor coverage
- gap and
- rental reimbursement.
A Note on Replacement Car Rental Insurance
Auto Rental Reimbursement may not pay all of your car rental expenses. It may limit the amount you receive per day and the number of days you may rent. Read your car rental policy carefully.
For every type of coverage listed above, you must realize that there are many exceptions, exclusions and limitations . Always read the exceptions, exclusions and limitations listed in a policy before you purchase. Sometimes it seems that what is covered on one page is limited or subject to exclusions on another.
Purchasing: Factors Used to Determine Your Premium
In determining auto premiums, insurance companies rely on such factors as:
- each driver’s driving record;
- each driver’s annual mileage;
- automobile usage, (business or pleasure);
- the area in which you live (in some states this is permitted as a factor);
- the model, make, year, mileage, and value of the automobile(s);
- each driver’s age, sex, and marital status;
- anti-theft devices in each automobile;
- safety features in each automobile;
- the limits or amounts of coverage purchased;
- the number of automobiles covered under the policy;
- the deductibles you agree to pay; and
- each driver’s credit history (permitted only in some states.)
Have this information ready before you begin your application:
- Zip Code – (must represent the residence of the primary vehicle owner).
- Year, make, model, body type and VIN of the vehicle (fill this out carefully).
- Primary Use of the vehicle (Business and personal use have different rates).
- Do you Own (making payments) or Lease the vehicle?
(Why? Cost of replacement and possible need for Gap insurance).
- Note: Records are kept that tell the system about accidents and other
details about the vehicle.
- Anti-theft Equipment?
- Marital Status (all residents of the household may be considered, and
must have some type of coverage).
- Level of Education (discounts).
- Occupation: (May earn discounts or increase rates due to risk assessment).
- Employment status (financial status earns discounts).
- Social Security (to confirm residence and age).
- Driver’s License status.
- Accidents and violations (include ALL – omissions can void your coverage).
- Citations –(again, be thorough and include all).
- Other Coverages you have, such as Umbrella Insurance.
- Health insurance details: Does your coverage include accident insurance?
- Current auto insurance coverage limits.
- Number of family members not included on the policy (residing with you).
Once you have completed the form, save it and contact the insurer for other discounts that may be available.
Individual Discounts on Premiums
When buying a policy individually, most insurance companies offer a number of discounts in order to prompt you to buy. These discounts are often based on the risk the insurer is taking by insuring you. Before purchasing insurance familiarize yourself with the different types of discounts available and ask your agent if you qualify for them.
Some of the more common “discounts” include:
- qualified “good drivers” Students with good grades;
- females, married drivers;
- non-drinkers; or
- persons who have attended driver’s courses.
Should You Purchase Collision Coverage?
Collision coverage is one of the most expensive components of automobile coverage. Excluding collision coverage entirely will greatly reduce your premiums. On the other hand, people do occasionally run their cars into concrete parking lot pillars and trees.
Online Price Comparison Sites
Online insurance sites provide comparison quotes for different types of policies. But these sites are never run by coverage experts. As a result you don’t know what you are getting, and not getting, except in the most general sense. None of these sites will help with claims issues or resolutions because they don’t know anything about claims.
Be very careful not to shop for insurance simply based on price.
Maintaining Your Insurance/Updating Coverage
Keep your auto insurance up to date with new drivers, new vehicles, or changes in driving status. and assets.
To notify the company of changes:
- call the company or agent to notify them;
- follow up with a letter confirming your call; and
- keep a dated copy of the letter.
The insurance company may:
- make no changes at all,
- require you to cancel your policy and purchase a new one (expect a refund of pre-paid premiums); or
- require you add an endorsement or floater.
Renewals (and Non-Renewals)
Once you have been issued an insurance policy and paid your first premium, your automobile insurance coverage begins. Your coverage should continue in effect until the anniversary date of your policy or until the policy says it will end. Your premiums must be up to date to keep your policy in effect.
Before the policy expires, the insurance company should send you a “Notice of Renewal.” This notice will contain any changes in your premium payment or coverage. Read it carefully before you agree to renew your policy. Usually, you can renew your policy by simply continuing to pay the premiums.
Be sure to read the notice of renewal in case the insurance company requires you to do something more. Before you decide to renew your policy, review it to see if it should be updated.
The insurance company may also decide NOT to renew your policy. It can usually do this for any reason. However, most states require that the insurance company give you adequate notice (usually 30-60 days) of its decision not to renew. This is intended to provide you with time to purchase insurance elsewhere.
As with all lines of insurance you can cancel your insurance policy at any time and for any reason. If you do so, you are entitled to a refund of any unused portions of pre-paid premiums.
However, if you simply stop paying the premiums and later decide to reinstate with the same insurance company, it may require you to pay any lapsed premiums.
NEVER cancel your insurance unless you have already purchased insurance elsewhere. (In some states you may need to coordinate cancellation and coverage between 2 policies.) If you cancel a policy and then an accident or disaster occurs, you will not be covered under your canceled insurance policy.
If an accident occurs, do the following at the scene of the accident:
- Make sure that everyone is all right. Call the police and paramedics immediately if anyone has been injured.
- Take pictures of the accident, automobile damage, insurance information of the other driver, and of the surrounding area with your cell camera.
- Do not make any statements to the effect that you were at fault. Wait until you have had time to get over the shock and consider what happened. You should wait until you speak to an attorney, especially if the accident is a serious one.
- Obtain a copy of the police report for your records if the police came to the scene of the accident.
Record pertinent information, including:
- name, address, telephone number, and driver’s license number of the other driver(s),
- license plate number,
- automobile registration number,
- name of the other driver(s) insurance company and agent,
- names, addresses, and telephone numbers of other witnesses,
- a brief description of what happened and the damage that resulted,
- a sketch of the accident scene noting distance estimates, directions, roadways, traffic control devices, objects, skid marks, damage and other relevant matters, and
- name, badge number, and telephone number of the police officer(s) who visited the scene of the accident.
If anyone suffered bodily injuries or property damage, you must:
- Notify the insurance company of the accident. Do not go into great detail at this time. You may say something incorrect that operates to reduce or eliminate your claim. Wait until you have had time to analyze and consider carefully what occurred.
Prepare your claim information:
- Re-read your policy and the guidance provided on this website.
- If your automobile cannot be driven, check your policy to see whether the insurance company must provide a rental car.
- If you cannot work, check your policy to see of the insurance company must pay all or a portion of your lost wages.
- Write down your observations of the injuries or damage. Have a professional document your injuries and/or inspect the damage to the automobile and the cost of repairing or replacing the car.
- Notify the Department of Motor Vehicles if required by the laws of your state.
Claims for damage to tour car that are submitted to your own insurance company:
These claims would include claims under your own collision, comprehensive, uninsured motorist or underinsured motorist coverage. These claims also include most no fault claims (if you live in a state with a no fault law). In order to determine the amount of the loss:
- Obtain detailed repair bids from at least two different repair shops. These should be shops of your own choosing.
- Make sure that the shops use factory replacement parts, not after-market parts. The latter, though cheaper, have been known to pose quality and even safety problems.
The amount of this loss that your company is responsible for paying is the reasonable repair amount minus any deductible or other applicable policy limitation.
Claims for bodily injury to you or other insureds that are submitted to your own insurance company:
These claims would include:
- med pay,
- uninsured motorist or underinsured motorist claims
- most No-Fault claims (if you live in a No-Fault state).
Med pay: in order to determine the amount of the loss, you must ascertain the amount of your present and future medical/hospital expenses. Obtain this information from your treating doctors. Do not sign any settlement agreements involving a med pay claim until the injured person’s condition has stabilized and a true diagnosis and prognosis can be rendered.
Uninsured and underinsured motorist claims, in most states you are entitled to damages beyond your medical and future medical bills, such as:
- damages for loss of earnings,
- future loss of earnings and
- pain and suffering.
This is so because your insurance company steps into the shoes of the uninsured or underinsured driver. They are responsible for paying you for all of the damages you are caused- not just your medical bills. Calculate these items carefully. If necessary, obtain the assistance of a lawyer in helping you put a dollar amount on those aspects of your loss.
Estimating losses for bodily injury in No-Fault states: The specifics of No-Fault provisions differ from state to state. To find out your recovery rights for your own bodily injuries or those of other insureds, check your policy provisions carefully.
Liability claims that are submitted to your insurer
These would include requests (tenders) for a defense and indemnity in situations where a claim or suit has been filed against you.
If the claim is covered by your policy, your company is responsible for paying the costs of your legal defense and for indemnifying (paying on your behalf) any settlement or judgment obtained against you, within your policy limits.
Your company probably has the right and duty to settle a liability claim on your behalf – either with or without your consent.
If they should refuse to settle such a claim where a demand within your policy limits, the carrier may be obligated to pay any judgment- even beyond your limits. This is dependent on facts of the case and the law of the state you reside in.
If the damage to your car is substantial, have an independent scope of loss and repair estimate prepared by a reputable repair shop. This is regardless of whether the damage is going to be paid under the collision coverage of your own policy, or under the liability coverage of the person who caused the accident.
For Fault insurance liability claims where you were at fault, your insurance company must determine whether a suit against you is covered by the policy. If your insurer agrees to represent you, they may do so with a “Reservation of Rights.” That means your insurance company is contending the claim should not be paid under your policy.
In that situation you may be personally responsible for paying any judgment against you. In addition, you may be asked to reimburse your insurer for all legal fees and costs incurred in your defense. (One such example would be if you allowed an unlicensed driver to operate your car.)
If your insurer is defending the case against you with a “reservations of rights” the attorney representing you in the case may have a “conflict of interest.” This means that the insurance company’s attorney has a conflict between representing your interests (attempting to prove your insurance coverage is applicable to the claim) and those of the insurance company (contending that there is no coverage).
In such a situation, you should ask the insurer to appoint, and pay for, an independent attorney who represents only YOUR interests in the case.
With regard to your coverage, if you have any disagreements with your insurance company, whether under UM, UIM, collision damage, comprehensive coverage, liability coverage, your legal defense, or anything else, try to negotiate the disagreements with your insurer. If that fails, suggest mediation through First Mediation, JAMS OR some similar service Once a resolution is reached a settlement agreement will be prepared for everyone to sign. Again, if there is a substantial amount of money in issue, always obtain an attorney consultation before signing.
Boat insurance policy sections consist mainly of:
- liability coverage
- Med Pay, and
- physical damage
Liability coverage pays defense fees and costs and indemnifies (pays judgments and settlements) arising out of covered claims filed against an insured.
Typical liability exclusions include coverage for boats being used for illegal purposes, commercial purposes, or prearranged racing
Limits of liability should be sufficient to protect the assets of all insureds.
Med Pay usually pays for:
- medical services received within a certain number of years of a covered accident,
- subject to deductibles and limits set forth in the policy,
- the services and charges must be reasonable and necessary.
Physical Damage covers damage to the boat. Typical damage coverage pays for sudden direct accidental loss.
Damage is usually covered for:
- flooding or
- other natural disasters.
Hurricane damage is covered. But make sure that the amounts set forth in the Declarations Page are sufficient.
Sometimes collisions are not covered.
In addition, most policies have coverage for things like wreckage removal, fishing equipment, and personal effects.