What happens when I loan my car to someone? Is that person covered by my policy? Am I still covered?

Yes. Liability and coverage for physical damage (i.e., comprehensive and collision) always follow your car. So, if a friend borrows your car and has an accident, you're still protected against the cost of damages or injuries. Plus, if the driver of your car is insured, his/her policy will also be available to cover the cost of damages and injuries.

The same rules apply when you borrow someone else's vehicle. Your own insurance follows you no matter whose car you are driving. But the vehicle owner's policy is the key coverage if you have an accident.

Am I covered for natural disasters or "Acts of God?"

Comprehensive insurance, which covers you for fire and theft, generally covers you against damage by flood, earthquake, hail and other natural perils, except when your car is overturned (which is technically considered a collision). If you have special concerns about the safety of your vehicle in the face of Mother Nature's wrath, contact your Trusted Choice^SM agent for information on catastrophic coverage.

What should I make sure my policy includes? Do I really need to read all the fine print?

While you don't need a law degree or an agent's license to understand your policy, you should read it thoroughly. After all, it is a binding legal contract. If there is anything you don't understand, ask your Trusted Choice^SM agent to explain it to you. You have the right to know what's in your policy.

If you wish clarification beyond your agent's explanation, or if you want to be certain that the policy is completely valid, contact your state's insurance department.

What actually happens when I report an accident?

After an accident, you should call your Trusted Choice^SM agent as quickly as possible, to help you complete a claim form, determine what exactly happened and evaluate any damages or injuries. Your Trusted Choice^SM agent then will contact your insurer's claims adjuster—usually within an hour of your report—whose job is to work with you to fix the problem. While compensating you for auto repairs or medical expenses is easy and immediate, determining liability is more complicated. The adjuster will begin the settlement process, the length of which will depend on the cooperation of the other party.

The amount of compensation for your loss can vary according to the adjuster's analysis of the damage. You do not have to accept the first amount of money you are offered, if it is lower than the cost of your repair or recovery. While you may have to do some homework to prove your reported loss is valid, it's worth it to be certain your insurer lives up to the provisions of your policy.

Remember, negotiating with an adjuster is just business. Insurers simply want to settle claims fairly in light of possible fraud. While it is your insurer's responsibility to root out false claims, you pay the price in the end. In fact, you spend nearly a dime on every dollar of your premium to cover the false claims of others. So, try to keep an open mind when working with your adjuster to settle on a price that's fair to both you and your insurer.

Do I need special insurance for a classic car?

You should always talk to your Trusted Choice^SM agent about coverage of rare and valuable property. Since a classic car usually cannot be replaced, you'll probably want ample compensation if it is lost. A classic car, because it is rare or unique, may indeed require a special insurance policy.

Under what circumstance do I not need certain types of auto insurance?

While most drivers today are generally insured for collision and theft, this coverage may not be necessary for every vehicle.

Liability insurance, as mentioned earlier, is essential and in many states required. But if you drive a clunker—an older car that isn't worth much money—you may be able to do without collision insurance. If you have an accident, repair costs could easily be higher than the value of your vehicle, thus "totaling" it. This means your insurer will pay you the total book value of your vehicle, and that could be far less than the cost of your vehicle's repair. So, collision insurance may not cover your loss adequately.

Since it depends on special circumstances, ask your Trusted Choice^SM agent for guidance.

Part 3

Date Posted to Site:   Jan. 2004

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