Accident Insurance

Reader’s Question:

Does an auto insurance policy also pay for your medical bills aside from my accident health insurance?

Brandon

Salt Lake City, UT

Your accident health insurance, in the event of an accident will pay for medical coverage up to a limited amount only depending on your policy. Most state laws do not require coverage of personal injury so medical coverage is normally not included unless requested by the consumer. The amount that a company will cover for medical bills is only $5,000 for which some may find this not enough.

In the US, you you probably belong to either the “No Fault States”, in which they make it compulsory for drivers to be insured with no fault insurance which will provide security against accidents; it also includes personal medical bills. The second is the “Tort States”; these are the states that require drivers to carry the liability auto insurance to third party drivers related to vehicle accidents.

Among these cases however, you should also take time to discuss if the insurance policy does cover your medical bills aside from your accident health insurance. Always double check with your insurance company the extent of the coverage.

Reader’s Question:

What should I do if my car accident insurance expired a day before the accident took place?

Blaine

Washington, DC

What you need to do is to confirm to your insurance agent the expiration date of your insurance. If indeed it has expired before the accident occurred, you should try to work on getting reinstated immediately so that you are insured while you continue to drive or refrain from driving until you are insured. If you’re insurance company does not want you to renew your policy, you can surf online for insurance quote information. With regards to the accident, if your accident insurance did expire before the accident and the event would be most likely to be blamed on you then it’s unfortunate to say that you may have to pay for the total damages.

Accident insurance primary use is to provide protection against the losses that happened as a result of accidents and against its liability. It is a serious offense to drive without insurance in almost all states, so if you were noted for driving without one, your car may be impounded and it can also result to disqualification from driving where you will be sanctioned, fined and has to deal with the penalties thereafter.

Reader’s Question:

When an insurance company declare that my car is totaled, how the does the company cover my accident insurance and do I get to keep my car?

Robert

Sunnyvale, California

If you have been involved in a car accident, you will inevitably have to deal with your insurance company and this situation happens to people most the time but every situation is unique and it is good that you understand your rights. However, the laws and procedures of accident insurance are also unique in every state and in every insurance company. Insurance companies in most states have the authority to declare if the vehicle is in “total loss”. The insurance company may decide to allow you to keep your car provided that the word “salvaged” may appear on the title and this prohibits you to operate the car illegally on roads and highways.

“Totaled” means that a car is so damaged that the cost of the repair would be more than the actual worth of the car. Some companies consider the vehicle a total loss when the damage exceeds 51% of the vehicle’s actual cash value (because of added storage costs, rental car, etc.), other companies only considers a total loss when the damage reaches up to 80% of the ACV.

A vehicle is only worth the Fair Market Value determined by the insurance company using the procedures defined and according to your policy. However, if by any chance you don’t agree on the ACV and FMV your insurer determined, you are allowed to bring an independent appraiser at your own expense or seek advice from a lawyer.

Accident insurance offers you to either take the money they will offer or keep the car and have it repaired (if that option is available). You can take the ACV minus the deductibles and what the insurance company may receive at the salvage yard, and fix the car yourself.

Reader’s Question:

I had a close friend who got into a car accident. He tried to get his insurance company to pay back the fender-bender he got, but they said some crap about ‘not reaching the franchise limit.’ What the hell does franchising have to do with accident insurance!? We’re not opening some food-chain or anything!

That got both of us pissed off, and we’re thinking of hiring a lawyer to sue their buns off. I mean, with you guys being all knowledgeable and stuff about car insurance policies, what do you think?

Daniel

Tampa, FL

That may not be the best thing to do. You may be spending a lot more than you really need to if you decide to get a lawyer, and you’re most likely to lose the case anyway. If you’re reacting this violently, then perhaps the insurance company didn’t explain the terms of your contract properly.

A franchise is a threshold of costs that have to be exceeded for the insurance company to pay for the cost of the accident. It’s sort of like a cost-limit that you’ve got to reach before the insurance companies pay up for accident insurance. For example: if your franchise limit is $100, and the estimated fender-bender that your friend had cost $99.99, then the company won’t pay for the damages.

Now if you think the estimate for the damage your car sustained exceeds the $100 franchise, then you can get couple of other separate opinions from other car-repair garages. The more estimates you get that exceed $100, the better your chances of convincing the insurance company to pay up. If they still refuse to reimburse the damage even after three or four estimates that all say the damage exceeds $100, then you can call your lawyer.

Reader’s Question:

I’ve had it with these accident insurance company. Each time I get into an accident, they refuse to pay up, coming up with a hundred reasons not to reimburse the damage I get.

I mean, if these so-called “accident insurance companies” will find one way or another to avoid for the responsibility they’re being paid for, why the hell should I even get accident insurance for my car?

J.L. Murray

San Jose, CA

To answer your question, some states make it mandatory to have car insurance. In California, where you’re from, you can either get insurance or make a deposit of $35,000 with the Department of Motor Vehicles. This is to make sure that you’re able to pay for any damages you could incur to other people’s property when you get into an accident.

Regarding your issue with you insurance company, you may want to consider switching insurance plans. The reason you’re paying for insurance is for the company to pay for damages that you’ll get when you get into an accident. Although your current auto-accident insurance company is hiding behind legal loopholes, it’s a really bad show of business ethic to do so. Ask friends and family what good insurance company they’d recommend.

However, there are some valid reasons why an auto-accident insurance company won’t reimburse you. Vague qualifying variables may come into play, like not being able to reach the franchise limit for damage incurred to your car. That’s why you’ve got to give your contract a serious read-over before you sign up with an insurance company.

Reader’s Question:

How do auto insurance companies connect an accident and insurance premiums? Is there some sort of formula that they use to come up with a premium computation?

Bobby

Houston, TX

Getting into an accident and insurance premiums are definitely connected. All insurance companies work by making a bet: they bet that the payments of their insured clients will out-weight the costs of paying for accidents or similar misfortunes that the company insures. Now if you get into an accident, they’ll have to keep their end of the bargain and pay according to the terms written down in the contract. If you had an accident and you were at fault, they’d end up risking more by keeping you as an insured client. So to even out the odds that they’ll still earn money from you, they’ll raise your premium.

Now each insurance company has its own formula for computing a premium. Although most of the factors for computing a client’s premium are confidential, there is one factor about you that will have the greatest effect on the price of your premium: your driving history (or a lack of it.)

Defensive-driving classes, years of accident-free driving, your frequency of driving and driving accidents are just some parts that would determine your driving history. If your insurance company sees that you’ve been driving safely, conservatively, and sparingly, you can argue for lower insurance premiums.

Just think up ways to ensure that the insurance company won’t lose out on their ‘bet’ by lowering your insurance premium, and you’ll be able to get a discount when they make the computations for your premium.

Reader’s Question:

My brother was recently in a car accident. He has an accident insurance policy and I am in charge of taking care of it. How do I go over processing a claim?

Virginia

Jersey City, NJ

Most people think that processing a claim is very difficult. That could be true for some but if you know what to do and you have proper documentation, processing an accident insurance claim shouldn’t be too hard for anyone. Here is what you need to do in processing an insurance claim.

A person who had an accident should call the insurance company of the incident as soon as possible. The company would then send you a claim form to be filled up. In some instances, you can complete the claim form though telephone or though the insurance agency’s website. It would pay to review the accident insurance policy to see what aspects are covered.
In cases when there is also damage to the car, and your accident insurance covers it, you would need to obtain an estimate of how much the repair would be. You would need to provide this information to your insurer and they could determine if your car is eligible for repair. If not, they would provide you the value of your vehicle.

It is best to file a claim after the person insured is out of the hospital and done with all the treatment or surgery needed. This is to be able to file all the costs from the medical bill onto the claim. If you feel like this is procedure is not so easy for you, there is always the option of acquiring the services of a third party agency that could help you process a claim.

Reader’s Question:

I need to buy a new insurance policy. I haven’t really used the previous policies I had so I am thinking if it is really necessary to get one. Can you please tell me what are the things covered in car accident insurance?

George

Reno, NV

A lot of accidents happen on the road. Most people encounter vehicular accidents at least ones in their lifetime. So everyone should be prepared for such incidents. As a person who drives, you should have at the very least a car accident insurance.

An accident insurance provides you benefits when something bad happen to you while driving. If you are on a collision and needs to be hospitalized, your medical expenses are covered. If you damage a property or another person, a lot of comprehensive car accident insurance also provides you some support to cover expenses for those. Repairs of car damage are also covered in such policy. In the event of loss of life or disability during a car accident, you or your beneficiary could also file a claim to get some financial assistance.

There are other benefits that are provided by an insurance company. They have various accident insurance policies that one can choose. They each want to have an edge over their competitors so most of them vary slightly. Just ask a broker to know more about this.