Insurance Online

Today I would like to continue my previous post and tell you about different types of coverage; it means that we pass to the second question from the list:

Coverage: which of them and how much

We do not have the task to pass on all available coverings in the world of car insurance. There are a lot of sources in the network, books where you can find information, and, not in the last instance, your insurance agents. On the contrary, we shall try to see a problem as a whole, not dividing it into details.

Liability Coverage

We speak about this type of covering when somebody brings an action against us or somebody is going to do it, irrespective of validity of claims and irrespective of result of the court examination. 95 % cases do not reach the court, as the parties reach settlement. The insurance company in this case pays (instead of us) not only damage which we have brought to health or the property of other people, it also pays litigation cost. Sometimes it does it without any payment of indemnification to fight tooth and nail against completely absurd claims and spends thousands of dollars on good lawyers.

The person cannot be judged for the sum, bigger, than all his assets (bank accounts are included), equity in the real estate, shares, and, that is very important for beginners - garnishment of wages (deduction from wages during 10 years forward from all members of family at the rate of 25 %). That means that young family without good private means have not so many assets. But, the husband and the wife can earn together, for example, 160 thousand one year. Therefore it is possible to keep 400 thousand dollars within 10 years back.

The important question:

In what situation the court will take away everything from the initiator of traffic accident?

The answer:

The court will take away everything from the initiator of traffic accident in case of death(s), or in case of physical inability of another person.

The amount of damage also depends on the solvency of the victim. The moral damage\spiritual injury (pain and suffering) of a serious lawyer or a doctor costs much more than the same one of a worker.

It is obvious, that we as drivers cannot supervise how many car we shall damage in case of traffic accident, neither their price, nor quantity of drivers and passengers, neither gravity of traumas received by them, nor cost of their subsequent medical treatment. Therefore, we proceed from the worst for definition of the amount of our insurance responsibility.

We should calculate how much it is possible to take away from us if to take away everything, including 25 % from the salary during the next 10 years? So, it is necessary to insure our liability for this sum in the part which is responsible for damage to health of people (Bodily Injury - first two components of our fraction - for more information see the previous post CAR INSURANCE IN THE USA: WHY IT IS NECESSARY TO BE INSURED).

But soon $500,000 of the maximal coverage will be not enough. Then we need an additional coverage in form of Umbrella Insurance. The need for insurance coverage varies from time to time. This implies very simple and important …

The Conclusion:

Insurance coverage should be reconsidered periodically, in accordance with growth of the potential responsibility.

Uninsured Motorist Bodily Injury (UMBI) - covers our moral damage and physical injuries in a case, when we have suffered from the not insured (or insufficiently insured) driver. That is, if the initiator of traffic accident has no enough Liability Coverage. Usually we take this covering in the same size as in Liability Coverage and not less. A principle is the following - it is necessary to insure ourselves not worse, than we insure against other people.

Uninsured Motorist Property Damage (UMPD) - covers damage to our automobile in similar circumstances that is if we have suffered from the not insured (or insufficiently insured) driver.

If WE have damaged our car the damage will be covered as Collision (collision with machine, the house, a border etc.) or as Comprehensive (the rest cases - collision with an animal, theft, vandalism, hailstorm, flooding and so forth). You can buy such an insurance with different deductible (the sum paid to you before the insurance company starts to pay).

Choosing the large amount of deductible the person saves on cost of the insurance, but loses in case of accident. The person who drives without accidents for a long time (some years) it will be reasonable to think about high deductible on Collision, for example, $1,000. Comprehensive which costs ridiculously a little, and it is possible to take $250 as there is nothing to save.

Medical Coverage

Medical Coverage is rather curious covering . Some thousands of dollars, usually 2-5 thousand, that were bought in this coverage, are spent without examination (in other words you may be guilty or not). In the case of expensive medical treatment the necessary sum will be charged from the Liability of the guilty person.

To be continued…

<:3 )~~~~~~
Yours sincerely,
AlexSandra

Do you remember about new interesting topic “CAR INSURANCE IN THE USA”? In my post about it I told that we will be interested in PAINFUL POINTS and I also listed the most important questions. So, today I would like to answer the first one: Why it is necessary to be insured.

First of all it’s important to know that that you must insure your car without fail in most states. Otherwise your friend with 4 wheels will not be registered!

The second thing - insurance is adjusted legislatively at states level, not at federal one. This implies very simple and important …

Conclusion №1

You can trust the information received from the experts in insurance from your state only. Any information from other states can be absolutely inapplicable outside these states.

As I have said almost in all states (there are exceptions) car insurance is obligatory regarding LIABILITY (civil liability). The size of required covering varies from state to state.

For example, in California it makes up to $15,000 bodily injury for one victim and up to $30,000 for more than one victim. Moreover, there is the responsibility for damage of other’s property - $5,000. I’ve made all these accounts for one accident only. It means that aggregate payment will be between 20,000$ and 35,000$.

By the way I’d like to mention that experts in insurance usually use fractional record for amount of covering. Record 15/30/5 corresponds to the covering that has each driver in California according to the law of this state.

Driving without the insurance is a serious crime and is punished strictly!

A piece of advice:

You shouldn’t communicate with people who drive without the insurance or argue that it is possible, or they say why this kind of a crime is “nothing terrible”. These people on a way to the big troubles - it is not necessary to keep them the company.

According to the police statistics in California 28-30 % drivers have no any insurance in general. I can add to this still the same percent of people having minimal covering and you will understand, that it will be very difficult to receive money from others (your will have few chances). This implies very simple and important …

Conclusion №2

It is necessary to have your own car insurance policy!

Moreover, there are two types of the states:

- At Fault (for example, California - the culprit pays the insurance to the victim)

- No Fault (for example, Arizona -your damage is compensated with your insurance irrespective of fault)

The conclusion №3

You should known about the system in state, where you live or are going to live.

If the person is very poor and is going to remain poor practically to the end of his days, in this case driving without the insurance is nothing for him. It must be confessed. In all other cases the sum of insurance should protect the driver from requisitioning of his property and incomes (including the future incomes).

Besides arguing about the whys and wherefores of car insurance, we should know, that are no such occupations in our life which is more dangerous then driving (if you are not a policeman, fireman or something like that). Therefore, it is necessary to answer the following question: “Shall I risk life and health of other people to save ten or more dollars a month?”

<:3 )~~~~~~
Yours sincerely,
AlexSandra

I always wanted to write something like a small “guidebook” for beginners about car insurance in the USA. I know some people from the United Stats of America and I see that a lot of people have common problems.

I would like to look at these problems though the eyes of beginners and help to solve them. Also it will be nice if you share your personal experience (please, leave your comments).

We are interested in PAINFUL POINTS (the post important things and problems): troubles, lack of understanding, the whys and wherefores of car insurance, insurance acts in different states, prices and at last I will try to answer to the following question:
Whether should you find your agent or it’s better to be insured in online?

Insurance plays an extremely important role both in the life of all American society, and in the life of separate family. We will speak about car insurance because each person faces with it. The need for other kinds of insurance arises later: in process of growth of incomes, preparation for retire on a pension, etc. We will speak about it later…

So, the most important questions for us will be the following:

1. Why it is necessary to be insured
2. Coverings: which for them and how much
3. Cost of insurance. Is it possible or impossible to save on car insurance
4. How the insurance companies sell insurance policies
5. Where and how to buy the insurance plan - with the help of agents, brokers or direct (online, by phone, etc.)
6. Myths and a reality in car insurances
7. Insurance fraud - how not to fall a victim to rascals
8. What to do in typical problem situations

Thanks everyone who will express his/her opinion. I hope that your comments will help us to create a helpful collective project.

<:3  )~~~~~~
Yours sincerely,
AlexSandra