Information about car, auto, motor and lorry insurance
Car Insurance : all you have ever wanted to know and even more. Find out !
Buying liability Insurance
Liability Insurance (remember : liability insurance is insuring your financial obligation to another person for injuries or property damage you cause) is an important part of your insurance needs. Looking for the right insurance and not paying to much is essential. However, a lot of people make mistakes in their choices. Read on to learn more about basic mistakes you should avoid !
Americans have a love affair with cars, and since Americans own more cars per capita than any country in the world, a good place to begin examining insurance risks is to look at those associated with the ownership, maintenance, and use of our beloved PTV (personal transportation vehicle). Unless you walk around with a loaded gun in your pocket, an automobile represents the most dangerous device you own. In one split second, you can experience lawsuits, death, long-term disability, major medical expenses, and major property darnage ! Pretty scary stuff! (source: Insurance for Dummies).
Americans and their cars
An accident is an unexpected, unforeseen event not under the control of the insured and resulting in a loss. The insured cannot purposefully cause the loss to happen; the loss must be due to pure chance according to the odds of the laws of probability. For example, under a PERSONAL AUTOMOBILE POLICY (PAP) if an accident occurs, the insured is covered for loss due to his/her negligent act or omissions resulting in bodily injury or property damage to another party (source : Dictionary of Insurance Terms)
What is an accident ?
Insurance and car rental
Renting a car, whether for business or for pleasure, puts you face-to-face with risks that your Personal Auto policy sometimes does not cover. Here are the four main sources of liability you face when renting a car:
• You have direct liability for injuries or property damage that you cause to others while operating the rental car. If you run a red light and injure others or damage their vehicle, for
example, you're at fault and responsibIe. No surprises here.
• You are directly liable for damage to the rental car that you cause by your negligent driving. If you run a red light and damage the rental car, for example, you're responsible for the
repair costs.
• You are responsible for damage to the rental car - damage that you did not cause but for which you agreed to be responsible when you signed the rental contract. Every rental contract I have ever looked at makes the renter absolutely liable for all damage regardless of fault! This clause has always been non-negotiable.
This means that you are responsible for damages such as hall damage, someone else running a red light and hitting you, someone vandalizing the car by keying it, or someone hot- whiring the car and stealing it. In short, if you return the car with any darnage at all, you owe. With the cost of new cars today, that could mean more than $25,000 if the car is totaled or stolen.
• You are liable for the loss of revenues the car rental agency suffers as a resuIt of the car being unavailable to rent while being repaired. Again, you will owe this loss-of-revenue regardless of whether you actually caused the damage. You agree to be responsible when you sign the contract.
Here's a tip for the car rental industry: If you want to attract new customers, offer more reasonable contracts. (source: Insurance for Dummies)
Mistake 1 : too little coverage
Insuring your personal injuries
Danger of split liability limits
Most liability coverage for homes, boats, recreational vehicles, and other personal policies is sold by insurance companies as a single limit (such as $300,000) that applies to all injuries and property damage you cause in a single accident, no matter how many persons are injured or how much property is damaged. In other words, if you're in an accident, you have one pool of money to pay for all your liability. Liability coverage for car accidents is also available as a single limit, but just as commonly it's sold with split limits.
With split limits automobile liability coverage, you select three limits. You select one limit - the maximum your policy pays - for injuries you cause to a single person. You select another limit for all injuries you cause in a single accident involving two or more people. And you select a third limit for all damage to property you cause in a single accident. The limit you are actually most likely to exhaust in a car accident is the injury limit per person. With split liability you could get into a situation where you your split limit is not enough to cover expenses like legal fees and costs of injury.
Mistake 2 : Inconsistent limits
to defend a case. (source: Insurance for dummies, jack Hungelmann). For example : if you have a collision and injure a doctor and it’your fault, it could cost as much as
$ 1.000.000 in medical bills, lost wages, pain and suffering and that is even without the costs for your legal fees ! Click here for more examples.
People buy far too little coverage, not realising the substantial amount of money involved in a death or an injury suit - both in the cost of a judgment and the costs
Tpeople buy inconsistent limits ($ 100.000 on their car, $ 300.000 on their home, $ 50.000 on their boeat and so on), even though they are protecting the same income and monetary assets, not realizing the danger of inconsistent coverage. In the above example suppose you injure someone seriously with your car. You only have $ 100.000 of coverage, yet had the same injury occurred at home, you would have $ 300.000 of coverage. Quite illogical !. (source : Insurance for dummies)
If you are injured in a car accident, you usually have more than one source from which to collect your medical bills and lost wages:
1st source : your own health and disability insurance
2nd source : the personal liability coverage of the other driver
3rd source : your car insurance
You have got 2 types of coverage in a personal auto policy for your injuries:
• Coverage for compensatory damages
• Coverage for your medical bills
Insurance for dummies
One of the main sources of this website is the very informative book ‘Insurance for Dummies’ by Jack Hungelmann, Packed with real-life examples, expert author Jack Hungelmann guides the reader through the traps and loopholes of the insurance system. Discover what policy combination is best for your needs and where you may have gaps.Find out how to reduce your risk and your insurance costs. Learn how to make the most of your insurance policies and what to do when there's a crisis. Click on the picture to see the special price for this book and order online