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I Wrecked My Car, Now What?

Posted in Auto Insurance , Collision Insurance , Comprehensive Insurance , Liability

August 5th, 2010
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Wrecking a car is something no one wants to experience, but causing the wreck and only carrying liability insurance coverage is definitely one of the worst types of accidents a person can have. Luckily, you won’t be responsible for paying for the damage to the other person’s vehicle, but if the damage to your own car is too costly to repair, you’re left with the dilemma of what to do with your car.

What to Do with a Wrecked Car

The worst has already happened; you’ve caused an accident and wrecked your car with only liability coverage. Now it’s time to figure out what to do with it since your auto insurance won’t cover the damage. Here are a few options to consider:

1. Part It Out

One option that you have as the vehicle owner is to “part it out” or dismantle the vehicle sell it for parts. Even though the body of your car may be wrecked, there are still working parts that an experienced person could take advantage of (battery, engine, transmission, exhaust system, seats, etc.). Many mechanics and car junkies love to piece cars together at their leisure and would be willing to buy the parts instead of the whole thing.

2. Sell It to a Junkyard

If you don’t feel experienced enough to part out your car, you could try selling the whole thing to a junkyard. Junkyards are always in need of cars and are willing to part them out to individuals who come looking for parts. Unfortunately, junkyards typically don’t pay a whole lot for cars. You might get lucky if you receive $200 for your car. Keep this in mind as you decide what you want to do.

3. Donate It to Charity

Another option that you have as the vehicle’s owner is donate your car to a charity. Many organizations offer services like fixing up cars and giving them to needy families. If your car is in good enough shape, the organization might fix the car up and give it away. If it’s not, it might be parted out to restore other cars.

The good news with taking this route is that you could receive a sizable tax deduction if you donate vehicle parts or the whole car. Of course, you’d need to keep your receipt to claim the deduction.

Are There Any Other Options?

While most of your options would be exhausted above, there are a few other things you could try to redeem the fact that you didn’t have comprehensive and collision auto insurance for your car before causing an accident:

• Sell it “as is”: Many people are willing to purchase vehicles in an “as is” state. This is an option you might consider if you have valuable parts on the car (i.e. expensive wheels and tires or audio system) and want to get something for the vehicle without parting it out. You’d be surprised by how much someone would pay for your “as is” vehicle knowing that they could pull some valuable pieces off and maybe even part it out on their own.
• Take out a loan and fix the car: This is probably not an option many would consider, but if you’re dedicated to keeping your car and know that it would be cheaper to take out a personal loan and get the repairs fixed than buy a new car then it could be worth a try.

It’s no secret that collision and comprehensive coverage are more expensive that liability, but it still doesn’t hurt to upgrade to full coverage, especially if you’re a not-so-great driver. This way, your liability policy doesn’t have to be the reason that you have a car one day and a bus pass the next.

Today’s News: Wisconsin Mandates Auto Insurance, Chinese Drywall Bill Helps Home Insurance Customers and FedEx Offers Same-Sex Health Benefits

Posted in Auto Insurance , Compare Health Insurance , Health Insurance , Liability

July 23rd, 2010
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Wisconsin is about to become the 49th state to mandate minimum liability auto insurance while the House of Representatives in Louisiana is about to mandate that home insurance companies keep their policyholders after filing a Chinese drywall claim. Also, employees who work for FedEx will now be able to take advantage of health insurance benefits for same-sex domestic partners.

Wisconsin Mandates Minimum Liability Auto Insurance Coverage

As of Jan. 1, 2010, only two states did not mandate auto insurance for their residents: Wisconsin and New Hampshire, but soon this all will change.

Beginning June 1, 2010, Wisconsin requires motorists to carry an active auto insurance policy and have proof of coverage at all times to avoid facing citations and fines. The minimum liability coverage limits for Wisconsin, which were mandated in January, are $50,000 for injury death to one person, $100,000 for two or more people and $15,000 for property damage. They also need uninsured/underinsured coverage of $100,000/$300,000 for bodily injury. (Official Wire)

Home Insurers Required to Honor Chinese Drywall Claims

Last year, a major issue erupted when thousands of homeowners realized the Chinese drywall in their homes was making them sick. When they filed claims with their home insurance companies, however, many policyholders’ accounts were dropped. The Louisiana House of Representatives has decided to combat this by approving a bill that will prohibit insurers from dropping or not renewing homeowners and businesses who file claims for Chinese drywall. If insurers do not comply with the bill, they could face fines of up to $15,000. (Nola)

FedEx Offers Health Insurance Benefits to Same-Sex Domestic Partners

As of Jan. 1, 2010, shipping giant FedEx offers health insurance benefits to same-sex domestic partners nationwide at the request of its employees. The company currently offers these benefits to employees working in California and in its division FedEx Office. The reason that the health insurance benefits package will be effective in 2012 is to give it time to re-add a package that was cut due to the recession. When it comes available, it will not be offered to unmarried heterosexual couples. (WHNT – Memphis)

Car Borrowing Series: Liability on Borrowed Vehicles

Posted in Auto Insurance , Liability

September 29th, 2009
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Even though most auto insurance policies have some level of coverage regarding accidents caused by people other than the owner of the vehicle, ultimately the owner is liable for the expenses associated with an accident.

Car Owners Responsible

Generally, the owner of the vehicle is the person listed on the registration and vehicle’s insurance policy. If another person borrows the vehicle and is involved in an accident, the person held accountable for the financial debt incurred is the owner of the car in question.

Liability Rule Exceptions

Of course there are some exceptions to the rule. If a friend borrows a vehicle without the consent of the owner and drives under the influence, the owner will be protected from their lack of judgment. Additionally, if the car is stolen and involved in a collision, damages to others and their property will not be the car owner’s responsibility. However, they will probably have to use their collision insurance to pay for the repair to the vehicle.

How Much More Expensive Is Comprehensive than Liability Insurance?

Posted in Auto Insurance , Comprehensive Insurance , Liability , Low Cost Car Insurance

August 11th, 2009
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If you own a car, or are thinking about buying one, then you probably know you have to have car insurance. Only a few states do not require it, but what they do require instead is proof that you can pay for any accident damages you inflict on others out of your own pocket. A few people here and there can afford repairs or hospital bills, but they would bankrupt the vast majority of us, so we need to have car insurance.

Two general components of car insurance are liability insurance and comprehensive insurance. Liability insurance is itself broken down into two parts: personal liability insurance and property liability insurance. Personal liability insurance will pay for medical bills stemming from an accident for which you are at fault. Property liability insurance will cover property repair or losses stemming from an accident for which you are responsible. Comprehensive auto insurance, on the other hand, will protect you should your car be stolen, for example, or damaged at a car show. The auto insurance policies will cost you, of course, but generally speaking, comprehensive car insurance will cost you more.

When you buy auto insurance, you select the level and amount of coverage protection that you want, or can afford. It’s a trade-off, really: the higher your monthly premium, the lower your deductible. So, if you get into an accident and it’s your fault, and you pay a lot of money every month for a low deductible, you will pay that deductible and then be relieved seeing the insurance company pick up the rest of the tab. Your strategy will have paid off. If you pay a low monthly premium and have a high deductible, you’ll really feel the bite when you have to cough up the first $5,000 the other party’s repair bill.

Generally speaking, comprehensive auto insurance is more expensive than basic liability insurance because it must cover the full price of your car should it be stolen or declared a total loss due to an act of nature. Policy prices vary from state to state and insurer to insurer, so be sure to check out all your options.

To learn more about comprehensive auto insurance and liability auto insurance, be sure to consult with an insurance expert.

Considerations Before Filing an Auto Insurance Claim

Posted in Auto Insurance , Auto Insurance Claims , Collision Insurance , Liability , Property Damage

April 20th, 2009
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Auto insurance is supposed to be simple: you get into an accident, you file a claim and let your insurer handle it. But in reality, this is not always the case as there are things you should consider before filing an auto insurance claim.

Although state laws mandate certain types of insurance coverage to legally drive, there are no laws on record thatrequire you to report accidents to your insurance company. Every time you do file a claim with your insurance company, it is marked on your permanent record. Although your premium may not go up immediately, if there are enough reports over time there can be a negative impact to the total cost of your auto insurance.

Before You File a Claim

When deciding between filing a claim with an insurance company, there are some things to consider during the decision making process. For example:

• Will the repairs cost less than your deductible?
• Do you have a large history of auto insurance claims?
• Was your vehicle solely involved in the accident?
• Have you had a previous accident that you were found at fault for and filed a claim?

If you cause minor damage to your vehicle and there are absolutely no other cars involved in the collision, you may opt to pay for the repair out of pocket. If the deductible of the insurance is greater than the total cost of the repair, you would end up paying the expenses anyway. In this case, there is no need to report the incident to your insurance company as you are the only one who suffered any damage and the choice is entirely up to you.

Reasons You Should File a Claim

However, if you were in a collision with another vehicle, it may behoove you to file a claim and risk the increase to your auto insurance rates. Even if the other driver involved in the collision begs you for mercy you should think twice. By not filing a claim with your insurance company, the other driver still may come around and sue you for their costs and if you never made the claim to your company, they will have a harder time fighting to protect you. Many people involved in a car accident will immediately assess the damage and make their own estimates of how much it will cost to repair, and they may be grossly underestimating the costs.

Understanding Diminshed Value Payments

Posted in Auto Insurance , Auto Insurance Claims , Collision Insurance , Comprehensive Insurance , Liability , Property Damage

April 16th, 2009
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Once a car is damaged in an accident, it will truly never be as “good as new,” because of the diminished value caused by the wreck. Once a car is involved in a collision, although auto insurance may cover the repairs of the vehicle, the car will never be worth its full value again because repair work for an accident lowers the value of your vehicle. Your car will now have a permanent history of being wrecked, and consumers will not be willing to pay full price for a previously damaged vehicle, no matter how well the repair job was done.

Calculating Diminished Values

Typically the decline in value is 18% between thepre-crash and post-crash estimate. That difference is officially called the “diminished value.”Whether or not your auto insurance company will cover the difference of the diminished value payments depends on local state laws. In most states, the insurance coverage willguarantee that a car will be repaired to pre-accident condition, and unless state courts mandate otherwise, the diminished loss value is your loss to deal with.

No Laws Requiring Diminished Value Payments from Insurers

Although consumer advocates fight insurance companies to pay for a diminished value payment to policyholders (assuming their vehicle is restored and repaired), not all states agree it should happen. Because of the different views between policyholders, consumer advocates and insurance providers on this matter, there are a plethora of court cases battling out the rights in question.

45 states have language on the books limiting the coverage provided by the insurance coverage to exclude diminished value from the realm of their responsibility. TheInsurance Services Office (ISO) composed policy language that officially releases insurers from making diminished value payments in physical-damage coverage claims. OnlyGeorgia, Hawaii, Kansas and Maryland have not adopted this language, while Massachusetts does not use this language but followed an advisory committees policy ensuring no diminished value payments.

The only way to possibly claim a diminished value payment is if someone else hits you and is found in fault for the accident. Their insurance will take effect to cover your losses, and since you do not have a direct contact with their insurance provider, the language preventing you from claiming diminished value payments will not apply to you. This process is alsocalled a third-party claim.

Working With Another Insurer When Not at Fault for an Accident

Posted in Auto Insurance , Auto Insurance Claims , Collision Insurance , Liability , Property Damage

April 15th, 2009
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The aftermath of a car accident is oftentimes difficult to deal with. Even if the damage to your health and property are minor, and you are not found at fault for the collision, working with another auto insurance company to settle your claim can be a stressful and time consuming process. The first step in this process happens immediately after the collision. You need to document all the information associated with the accident and driver to get the claim process started.

Starting the Claims Process

1. Contact your own auto insurance provider to establish a good-faith accident report
2. Contact the other driver’s insurance company (they may be embarrassed or have other reasons for not calling in the collision, and therefore hesitate in making the call – this can prolong the claims process if you are not proactive)
3. Take your vehicle in for an estimate (you will need permission from both insurance companies)
4. Send your repair quotes to both insurance companies

Use the Police Report

If there is any hesitation from an insurance provider in paying for the repair of your vehicle and the police have reported that you were not at fault for the accident, simply provide them with a copy of the accident report and the process should quickly resolve itself.

Make sure to always deal with the insurance company representative in a polite and professional manner. By staying calm, you have a better chance of the insurance agent resolving your claim quickly and effectively.

Why You Need Underinsured Motorist Coverage

Posted in Auto Insurance , Auto Insurance Claims , Collision Insurance , Comprehensive Insurance , Liability , Property Damage

April 14th, 2009
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Underinsured motorist coverage is a way to protect an insured driver who becomes involved in a collision with another driver who does not have adequate auto insurance coverage. If the driver of the other vehicle is determined to be at fault and their policy limit does not cover your all the related expenses, you will most likely have to pay out of pocket to cover the rest if you do not have underinsured motorist coverage. Because many states have low auto insurance coverage minimums, their policies will most likely not cover them or involved parties in the event of a major accident.

Underinsured Motorist Coverage Basics

If you are involved in an accident, it is crucial that you write down the full contact name, drivers license number, model, make, license plate and insurance company information from the other involved party. If you are in an accident with an underinsured driver who is found at fault, you will be compensated for your damages by their insurance company up to their policy limits, and then you can make a claim with your own insurance company for the remaining balance.

Be Sure You Have Underinsured Coverage

It’s important that you make sure your policy covers underinsured motorist coverage. You need to check with your car insurance provider to ensure you understand the full terms of your insurance policy, and be sure to add on underinsured motorist coverage if it’s currently not included in your policy. You may also need to look into uninsured motorist coverage as well.

What is a No Fault Auto Insurance Law?

Posted in Auto Insurance , Collision Insurance , Liability , Property Damage

April 10th, 2009
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It is happening right now somewhere in the world. Despite the best of intentions and skills of two drivers, their cars are colliding and an accident has just occurred. In a fantasy world, both drivers would be able to file claims with their insurance companies and get the settlement money needed to make both them and their cars whole again. In reality, that is the concept before no-fault auto insurance.

No Fault Auto Insurance Law Basics

The no-fault insurance law is a type of auto insurance law that allows those involved in a collision to avoid being declared at fault – it makes both parties equally liable for the accident. The first no fault auto insurance laws were passed in 1970, and at that time 24 states opted to enact no-fault auto insurance laws.

States with Active No Fault Auto Insurance Laws

Currently only twelve states still have that rule on the books. Here are a list of states with active no-fault auto insurance laws:

• Florida
• Hawaii
• Kansas
• Kentucky
• Massachusetts
• Michigan
• Minnesota
• New Jersey
• New York
• North Dakota
• Pennsylvania
• Utah

Because the laws for no-fault auto insurance are constantly under review, it is important to contact your insurance provider to see how you are covered.

No-fault insurance eliminates having to find one party at fault for the cause of fender benders. The original purpose of no-fault auto insurance laws was to minimize the need of government intervention in the form of court proceedings. Additionally motorists could get back to driving more quickly than the traditionally methods of insurance claims.

Disadvantages of No Fault

Not all is positive when it comes to the no-fault auto insurance law. Many critics of the policy think that the lack of accountability the law creates contributes to the bad driving habits of the already reckless and careless. Another criticism of no-fault auto insurance laws is that for those twelve states that have them, the cost of their insurance is higher than the states that do not have the no-fault auto insurance law on the books.

Auto Insurance Benefits Forfeited in Street Racing

Posted in Auto Insurance , Auto Insurance Claims , Auto Insurance Quotes , Comprehensive Insurance , Liability

April 3rd, 2009
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There are many factors contributing to street racing. Teens are the most common violators of street racing laws. Many times this reckless behavior can be discouraged by more education and a better understanding of the consequences.

Street Racing is Illegal Everywhere

Street racing is not legal anywhere in the United States. Because of its high-risk status, auto insurance companies withdraw their benefits if they discover that an accident was caused due to street racing. By not offering insurance coverage for street racing, people will more carefully consider the financial and personal risks they are taking when participating in reckless driving behavior.

Auto Insurance Benefits Lost When Street Racing

The loss of benefits coverage for street racing is explicitly stated by most auto insurance providers. For example,Progressive includes an provision stating that coverage will to apply due to the “loss to any vehicle resulting from, or sustained during practice or preparation for: (a) any pre-arranged or organized racing, stunting, speed or demolition contest or activity, or (b) any driving activity conducted on a permanent or temporary racetrack or racecourse.”

If you truly feel the need to street race, consider the risks you are taking. You risk your life, the lives of others, financial ruin for your parents and loved ones, jail-time and losing your drivers license. Insurance will not cover losses due to racing of any type, so why even risk it? Often times, people do not consider themselves street racers. A moment of anger or excitement however, can cause even the most careful of drivers to be lured into a dangerous activity. It will also be extremely difficult to secure auto insurance after you are found guilty of street racing.