How to tackle the process of making an auto insurance claim after an accident is an experience many car owners would rather avoid altogether. Apart from the anxiety, trauma or injury individuals have to deal with the aftermath of an accident, the heartache, headaches and the red tape involved in making a claim could drive you mad.
But you can avoid a lot of confusion if you have basic knowledge about the blueprint of your insurance policy and its components. A clearer understanding of what you can and cannot do in the event of an accident will help you to avoid various pitfalls on your road to making a claim. Here are things you need to know about car insurance coverage and claims.
Do I know How to Read and Correctly Interpret My Policy?
One wrong assumption many people make is that once they have a policy in place, their protection is guaranteed. This is technically correct because, after all, does car insurance coverage not promise to do that? Of course it does so, but under special limitations and references.
That is why it is important to know what to look for when you are reading an auto policy contract. Being a legal document, it might appear confusing at first glance, but so long as you know what to search for and where to look, interpreting the content and the requirements becomes easy. Regardless of your state or the insurance company, all insurance contracts for vehicles have these three standard components: the declaration page, the insuring agreement, and the conditions of the policy.
The Declarations Page- The page not only indicates the maximum or upper dollar limit the company will pay for a claim made under every coverage, but it also shows the amount of premium you will pay. Other than that it states the policy period for your coverage, and it is where you will find your name.
Insuring Contract- By keenly reading the fine-print in the insuring agreement, you will stand a better chance of getting good value for every insurance dollar you pay. It forms the central part of any policy by describing what the obligation of the insurer will be in exchange for the premium you are charged.
In an attempt to eliminate misunderstandings, the contract specifically spells out all details related to the following: what is covered, who is/are covered, and how many residents of the household will use the car with the insured’s permission. It also has a definitions part which indicates any exclusions that might bear upon every type of coverage.
To make your insurance work for you, it is essential to understand the extent of your coverage and what you are not covered for in the event that your car is stolen, vandalized, damaged by flood or fire or when it is involved in an accident. Its not bother to get a copy of the contract from your insurance agent.
The Policy’s Conditions- This is the final part of the contract which defines your responsibilities when you need to file a claim. It stipulates the type of documentation you need to give the insurer, and the time-frame within which you must do certain things such as reporting an accident. This section also indicates under what circumstances your policy can be terminated. Usually, the terms for policy cancellation by the insurer or you are explained here, and although you are at liberty to end your contract at any time, your insurer must give you prior notice and the conditions necessitating an intended cancellation before acting.
Which Policy Components Must I know?
It is safer to assume that you are asking for several separate policies when you are seeking insurance coverage. Whereas many plans are optional, some states require certain types of coverage depending on where you reside. And since every type of policy has its premium, you need to find out about all the options before settling on how much coverage you need.
To know what your car insurance can cover can benefit you, add up all the options you intend to take and eliminate all the ones you may deem unnecessary, so that you can have an upper hand in controlling what you will end up paying. Below are different types of coverage.
Comprehensive coverage – This does not refer to all sorts of mishaps that can befall you and your car as, we suspect, you have always assumed. A comprehensive coverage defines anything that happens to your car such as damages by flood, hail, earthquake, fire, theft, falling objects, explosions and wild life encounters but not a collision. If your car is on loan, the bank may insist on this coverage, but by large, it is an optional coverage on which you can select to have a deductible.
Liability for Property Damage or PD – You will be covered by this policy if you cause damages to property belonging to someone else. In most cases it could be another person’s car, but it applies to all types of physical property like sheds, garage doors, entire buildings, utility poles and so on. The minimum you can do is differently defined in different states.
Coverage for Medical Payments (MPC or Med Pay) – If you are injured in an auto accident, this coverage will compensate you for the primary healthcare costs. Both you and your passengers will be covered regardless of whose fault it was that led to the accident. The laws regulating this coverage vary from state to state.
Collision – The law does not insist on this coverage, but you can have it to cover any damages to your car as a result of collision with other objects like a wall, a tree, a fire hydrant or another car. The coverage offers deductibles which you can pay out of your pocket before the insurance company gets involved. Your bank will also insist on it if you have a car loan.
Liability for Bodily Injury or BI – If you cause a fatal accident or someone is injured due to your fault; you will be covered by this policy. The amount you are supposed to pay varies according to state, but it is generally about $100,000 per person or $300,000 for an occurrence. When deciding how much to purchase, you should weigh the assets you need to protect or how much you can afford.
Uninsured/Underinsured Motorist or UIM/UM- If a driver without adequate insurance hits you, your medical expenses and other related costs will be covered by this policy. In some states it is optional but in others it is compulsory. Although many people purchase only comprehensive and collision for this plan, you can buy additional cover to protect your car if it is hit by an uninsured vehicle or motorist since they do not have any policy to pay for your immediate needs.
Now that you know how to read an auto policy agreement, what to look for and where to look, and the different components of auto coverage, next we shall consider when you need to file a claim and how to go about the process. Importantly, we shall discuss what you need to know before kick-starting the process.
Also consult with your insurance agent about all your current coverage's or coverage's you need in order to best understand your insurance policy. We offer free consultations and free quotes for auto insurance so give us a call at 1-918-744-5145 to make sure you are getting the best rate and coverage's possible for your needs.
I hope this was helpful. Please take another minute and share it with your friends on Facebook.