Auto Insurance Coverage

Recently, one of our clients called to report that her teen-aged daughter had been in an auto accident.  While stopped at a light, her car had been rear-ended by another car, which resulted in some whiplash for the daughter.  The car was a total loss.

I advise all my clients who are involved in accidents, either at-fault (ie, when their own insurance is called upon) or not-at-fault (the other person’s insurance comes into play) to prepare for some inconvenience and, perhaps, annoyance. Even with that in mind, this should have been a routine claim, in which the insurance carrier for the other driver would have paid the entirety of the medical charges as well as the book-value of the car.*  But, as is far too often the case, what seems routine can often become complicated.  In this case, the daughter, now in her late teens, had a seizure disorder when she was very young.  After the accident, her doctor recommended a series of tests to determine if the jossling her brain took could result in re-triggering the disorder.  The tests could be expensive.

So what’s the problem?  The other driver’s insurance carrier (under the liability coverage) incurs the responsibility for all of the expenses related to bodily injury. True, but only to the policy limits and, in this case, the limits were for only the state-mandated minimum: $25,000 per person/$50,000 per occurrence.** The insurance carrier?  One of those whose TV ads are as ubiquitous as they are intellectually grating (lizards, cave men, ditzy-yet-endearing waitress types; you get the idea) and who predict they can save you money (let’s say, oh, about 15%) over your current coverage.

How? Often via lower limits, ie less coverage.  The so-called 15% savings can quickly be realized from reducing the bodily injury and property damage, as well as the uninsured motorist (ie coverage for you in case whomever hits you doesn’t have enough coverage) and medical payment limits, down to the state-mandated minimum.  After all, you’re not required to carry more coverage than that.  And to many people, in their zeal to save money, this is attractive.  I see this regularly, though, I must note, not always, when reviewing the policies from these carriers for potential new customers.  We, like virtually every independent agent, will not not write auto policies for less-than-adequate limits, usually at least $300,000, and preferably $500,000. To do otherwise would abrogate our responsibility to our clients.

Can the “call 1-800/Endless TV ad insurance companies” save you some money and provide adequate coverage?  In some cases, of course they can; auto insurance is a competitive product.  Can they provide the advice and attention an independent agent like Finn and Stone will provide for you for the same premium?  Probably not.  And when you have a claim, (whether it’s your fault) you won’t consider how cheap your car insurance is; you’ll want to be sure you’re adequately covered, and that there’s an agent like us who will take the time to help you through the claim.

*Arriving at fair compensation for your totalled vehicle can require some preparation and negotiation.  We suggest researching the book value via one of the on-line services.
**Because the cost of our customer’s tests and any follow up treatment could easily