The Rise of Car Crashes and Auto Insurance

February 19, 2016

According to the Association of International Safe Travel over 37,000 people in the United States die in road crashes each year and over 25% of those casualties are involved with drivers age 16-20. Road crashes cost the U.S. $230.6 billion per year, or an average of $820 per person. The rise of your auto insurance is the result of the rise in these numbers as well as the cost of health care and the advancement of the automobile. Today’s vehicles are equipped with sophisticated high-tech computer technology and require specially trained technicians which add to the labor cost when repairs are needed.

When discussing auto insurance with your broker it would benefit you to know some of the terminology used when reviewing your coverage options.

Personal Auto Insurance:

  • Bodily Injury Liability Coverage-Bodily injury liability coverage is usually mandatory depending on your state of residence and pays for physical injury and death caused to others by the driver responsible for an accident.  This coverage pays for items such as medical bills, loss of income and pain and suffering, but only to parties to whom the insured is legally liable.  It also provides legal representation for the policyholder in the case of a lawsuit.  Most states set mandatory minimum levels of bodily injury liability coverage that drivers must carry.
  • Collision Coverage-Collision coverage is for physical damage to the insured’s car when it collides with certain objects, like a tree or another vehicle.  While this type of coverage is not always required by law, your lender or leaseholder may require it.
  • Comprehensive Coverage-Comprehensive coverage is for automobile damage from a covered loss other than collision, such as fire, theft, severe weather, floods, vandalism or contact with people, animals, or falling objects.  This type of coverage could also include cracked windshields and other glass coverage.
  • Medical Payments-sometimes called “med pay”, medical payments coverage pays for reasonable and necessary medical or funeral expenses that result from bodily injury or death after an accident-regardless of who is at fault.  You may be asked to select the “limits” of medical payments coverage, which is the maximum amount the insurance company will pay for covered losses.
  • Total Loss-If your car suffers significant covered damage it may be declared a “total loss”.  This means that it would cost more to repair your car than the car is worth. Total Loss classification would be determined by comparing the car’s Actual Cash Value (ACV) to repair costs.
  • Uninsured and Underinsured Motorist Liability Coverage-Coverage that protects you if you’re involved in an accident with someone who either does not have liability insurance or has a policy with liability limits that are too low to cover the costs associated with a covered loss. It also covers you if you are hit as a pedestrian.

Commercial Auto Insurance:

When discussing commercial auto insurance with your broker, you will want to talk about the basic coverages that are included in a personal auto policy including Bodily Injury and Liability, Collision & Comprehensive, Medical Payments, and Uninsured & Underinsured Liability, as well as the following commercial coverages:

  • Hired/Non-owned Auto Liability-Are you renting cars or are your employees using their own vehicles? This particular coverage provides business insurance coverage for certain liabilities arising from the use of a rented or leased vehicles (hired), or a non-owned vehicles (employee using their own vehicle on company business). Oftentimes this coverage can be added to a business/commercial auto policy, or in some cases, a general liability policy.
  • Use of Personal Vehicles-A personal auto insurance policy may not cover damage to your privately owned car or truck when it is used for business.  With the increase in the ridesharing industry, it is important that you know how to protect your assets.

For more information or help with your Personal or Commercial Auto Insurance needs contact The Armstrong Company Insurance Consultants today at 866-990-9286! We are always here to be of service for you!

The Armstrong Company Insurance Consultants  (License #0440075)