So many people think that when they have auto insurance that the auto insurance automatically covers the entire accident. It amazes me the amount of people that do not know what their auto policy covers because their agents have never reviewed their coverage's with them. Auto insurance does cover the accident but only up to the limits and coverage's you chose for your auto policy. The state of Indiana requires one to carry liability insurance. Indiana standard liability limit requirements of 25/50/10 may not be enough! In fact, I can pretty much guarantee that in this day and age it will most definitely not be enough and that there are items and assets that you could lose because you do not have enough coverage in the event of an accident. Hoosier Insurance Agency makes a point of reviewing the coverage's on the policy so that you actually understand what the coverage’s mean and then you can make an educated decision on the coverage’s that would work best for you. We believe that all of our customers know their coverage's and the options that they have. Auto insurance has 5 main categories of coverage: Liability coverage which includes Bodily Injury and Property Damage Medical Payments Uninsured/Underinsured Motorists Bodily Injury Physical Damage & Theft Optional Coverage’s (road side assistance, rental car, rate lock, diminishing deductible, lease gap coverage, new vehicle replacement coverage, etc.) Let’s go through each one of these using the Indiana minimums: In Indiana, each newly written Indiana auto liability policy must include uninsured and underinsured motorist coverage unless you reject this in writing. Minimum liability limits for uninsured motorist bodily injury is $25,000/$50,000 with $10,000 of property damage coverag. The policy must also include liability protection for bodily injury and property damage. The minimum limits for these is also $25,000/50,000 and $10,000 property damage coverage. Typically, you will want your liability coverage and your uninsured/underinsured motorist coverage to match. Bodily Injury Liability Bodily Injury pays up to the limits of the policy for injuries to other people you cause with your car. So, if you have the state minimum limits of 25,000 /50,000 liability; this means when you are driving down the road and you hit me in my car and then I spin out and hit somebody else; you are responsible for the damage to the passengers in my car and anybody else in your vehicle as well as anyone in the vehicle that the other person hit. The liability coverage would cover up to $25,000 per person and $50,000 for the entire accident. Let’s say that this is a serious accident and somebody has to be taken to the hospital, have surgery, or have to be flown to the hospital — $25,000 per person is easily used up and then you are personally responsible for the remaining damages. So, if one person has over $25,000 of bodily injury (which includes, bodily injury, pain & suffering, loss of wages & death) then you would have to cover the amount over $25,000. I have had many clients tell me that you cannot get blood from a turnip or I don’t have anything they can take. Actually, if there is a judgment against you, your wages could be garnished, they can take any cash or savings you have in the bank and they can put a lien on your house so that you cannot sell or refinance your house without paying off the judgment. That is why it is VERY important to make sure to look at your specific situation and make sure that you have enough assets to cover anything that your car insurance is not going to cover. In our office we have an office policy that we will not write anything less than $100,000/$300,000 of coverage and we really suggest you carry higher limits of $250,000/$500,000. Many times the higher limits are only about $30 – $50 more per year. Property Damage Liability Property damage liability which is $10,000 minimum in Indiana pays up to the limits of the policy for damage to other people’s property caused by your vehicle. So, here again you are driving down the road and you hit me, then I hit somebody else and that car goes into stop sign. You were theat-fault vehicle and you are responsible for my vehicles repairs the other person’s vehicle repairs as well as the damage caused to the street sign. So if you total my vehicle, and my vehicles in a 2011 Ford Edge, my retail vehicle is currently worth about $18,000 — You only have $10,000 of coverage; so you owe me another $8000. Then the other vehicle has about $5000 of damage so you add that onto the $8,000 you owe me, and then the street sign damage is about a $1000. Your insurance only covers $10.000 and $14,000 of the damage is going to be out of pocket from you because you only had $10,000 in property damage. Typically, in our agency we always try to match the property damage to the liability limits. We do this so that in the event you are in a multiple car accident you have enough coverage. Medical Payments Another part of your auto policy is medical payments. Medical payments pays medical bills incurred by you and usually your passengers up to the limits of the medical coverage you chose for your auto policy. Medical payment coverage is not required on Indiana auto insurance. But, with the high cost of medical bills and most health insurance having high deductibles, this coverage is inexpensive and can cover the part that your health insurance does not cover (deductibles and co-pays). If you do not have health insurance coverage, you should carry the highest limit available on your auto policy for medical payments. So if you are in an accident, you do not have to come out of pocket for these bills. Most auto insurance companies offer $5,000, $10,000, $25,000, $50,000 or $100,000. Collision Collision coverage is optional if your vehicle is not financed or leased. Collision coverage pays for repairs to your damaged car minus the deductible for anything that your vehicle collides with or causes upset. Collision is subject to a deductible and it will pay for the damage to your car caused by collision or upset; so when you are backing out of the driveway and hit the mailbox; that is an at-fault collision claim. When you run into somebody else’s vehicle that is an at-fault collision claim. When you drive your car over the curb and run into the stop sign that is an at-fault collision claim. You pay your deductible first and then your car insurance pays the remainder of the damages. It is considered an at fault accident when you have a collision claim. Any time you use your insurance for collision you have to pay your deductible. Comprehensive Comprehensive coverage pays for the damages to your car minus your deductible caused by perils other than collision or upset. This includes such losses as: theft, flood, fire, windstorm, hail, falling object, glass breakage, and hitting an animal. Clients have said, I thought hitting a deer is collision. So, if you hit a deer it is comprehensive coverage and considered not-at-fault. If you swerve to miss the deer; and did not touch the deer but hit the guardrail, that is a collision claim, which is an at-fault accident. Other Coverage’s There are many other coverage’s offered with auto insurance depending on the insurance company that you choose. Some of these coverage’s you should ask your agent about are: Towing and rental – This provides coverage for you to get reimbursed for your towing bill if you have to have your vehicle towed for either break down or an accident. Diminishing deductible endorsement – Some policies offer an incentive; for every year that you are claim free your deductible will be reduced a certain amount each year. Rental Car Reimbursement – This coverage allows you to rent a vehicle up to the limits you chose for rental while your car is in the shop being fixed. This does not cover renting a car to go on vacation or renting a car because your vehicle broke down. It only covers if your vehicle has been in a collision or there is a comprehensive claim. RateLock – This is when the insurance company offers you to lock in your rate so that even if the auto insurance premiums are increased by the company, you had an at-fault claim or speeding ticket, your premium will not increase. The only time it can raise or change is if you move to a new location, add or delete a driver, or add or replace a vehicle. This is a great endorsement for senior citizens and teen-agers as rates typically go up quick and fast for these groups. Uninsured Motorists Bodily Injury Coverage This coverage is when somebody hits you and they are uninsured. They have stayed at the accident scene and can not prove they have insurance. This is when a claim can be made under your uninsured motorist coverage. This coverage will cover the bodily injury up to the limits on the policy. Underinsured Motorist Bodily Injury This is when somebody hits you and they don’t have enough insurance to cover the damages and you have higher limits than they carry. For example; you have better limits such as $100,000/$300,000; they only have the $25,000/$50,000 – your injuries have gone over their policies limit so now you can use your policy under the underinsured motorist to cover bodily injury to you and those in your vehicle. AUTOMOBILE RATES Automobile rates can vary by many factors depending on the insurance company that you go through. When comparing costs be sure each company is quoting on the same basis; the least expensive policy is not always the best policy. Some rating factors insurance companies may use to create your rate are: Age and sex of drivers Marital status Credit scores Driver record How you use your car (to and from work; to and from school; pleasure, etc.) Place of residence (some insurance companies rate this all the way down to the 9 digit ZIP Code and just not the town or zip code) Your policy limits(many times it is actually less expensive to carry higher policy limits than the state minimum limits) Your deductibles Year, Make, & Model of your vehicle Driver training Claims history For Teenagers – Grade point average of B/3.0 or better can receive a discount The above are all important factors that insurance companies use to base the rates. Insurance premiums are not negotiable. Each company files their rates with the Indiana Department of Insurance. The Department of Insurance makes sure that the rates are fair, adequate and not excessive or unfairly discriminatory. It is important to keep very good credit scores now because most insurance companies factor premiums based on credit score. If you have any other questions about auto insurance, we’re here to help. Give Jennifer Gholson or Jeff Podgorny a call or email us at info@hoosierinsuranceagency.com, and we can walk you through your coverage options, and see if there are any areas that could be improved. Also, check out our website at www.hoosierinsuranceagency.com
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