Kids coming home from school? What do I need to know about how my auto policy functions?

Student driverDo you or your family members have a student returning home for summer-break? Could this student be driving any vehicles? Am I covered if my son or daughter drives my car? These may be questions you are thinking about as our schools prepare to begin summer break, in this post, we are going to discuss what you need to know about how your auto policy functions during these situations.

 

For starters, is your child listed as a “driver” on any policy; yours or their own? If they are listed on a policy other than yours, are the liability limits equal to your own? Even while your child is away at school, most policies will still define them as a member of your household if they lived with you immediately preceding going to school, are a full-time student, and are under age 21. If your policy still considers your child to be a member of your household, and they’re not listed as a driver on the policy, this may remove them from the coverage provided for a Permissive User and could potentially lead to a claim being denied and ultimately increasing your personal financial liability exposure.

While it may be tempting to remove younger-drivers from our auto policy as soon as possible, the definition of household-member can be very important to consider. Should an accident occur, and your child’s liability limits be exceeded, it is not farfetched to expect your policy and assets to be the next target. While each company’s policy may have a different definition for a household-member, it is very important to understand how your specific policy identifies who is an insured, and who is considered a house-hold member in regards to liability. Reading your policies definitions could potential save you from a damaging financial loss.

 

We hope this information has you thinking about your auto policy and the potential gaps or exclusion from protection. As with all insurance, it is important to remember that your policy is a very specific contract outlining the responsibility of each party and what is, or is not, covered. At the Hunt Insurance Agency, we look forward to identifying and explaining these policy-functions in order to deepen your understanding and provide you the opportunity to know in advance if your policy covers whatever issue we may encounter in life.

 

Please let us know what thoughts, follow-up questions, or comments you may have regarding this information. We look forward to your responses which help us better provide important information to all insurance consumers.

 

Thank you for reading!

 

Uninsured / Underinsured Motorist Coverage

Uninsured/Underinsured Motorist Coverage

You carry auto insurance to cover your liability when driving an automobile but what happens if you are involved in an accident where the person who hits you doesn’t have the same courtesy or doesn’t carry enough coverage to cover the cost of the accident?

If you have Uninsured Motorist coverage on your policy it covers you, insured members of your household and your passengers in an accident with a motorist who has no insurance or is underinsured. It also provides coverage if you’re hit by a hit-and-run driver and applies to you and the insured members of your household, even as pedestrians.

Uninsured / Underinsured Motorist Coverage includes payment of medical costs, lost wages and pain and suffering. It is required in many states but is not a required coverage in Washington State. This coverage typically covers any difference between what the other at fault driver’s insurance covers and the costs of your bodily injuries, up to the limits of the policy.

 

Auto Insurance – The Basics

What is Auto Insurance?

Auto insurance helps you to protect you and your family against financial loss in the event of an accident or other cause of loss. It covers the injuries and damages caused by an accident and for which you are legally responsible. It may also cover the costs of repairing or replacing your vehicle if it is damaged or stolen.

 

What if I don’t have car insurance?

In most states, you’re required to carry a minimum amount of liability insurance (or post a bond) and also provide proof of insurance before you can license your vehicle or renew your driver’s license. If you are caught driving without car insurance, you may have to pay a large fine, have your driver’s license suspended, and/or have your car impounded.  In the state of Washington the minimum coverage is $25,000 per person for bodily injury $50,000 per occurence and $10,000 in property damage.  For more information the bodily injury and property damage coverage please review our blog post on this subject or you can click here.

 

How much Auto insurance coverage should I purchase?

That is an excellent question! The required minimum coverage may not be enough to pay for all the damages that result from an accident, and the legally responsible driver will have to pay the additional expenses out of pocket which if you have ever been in an accident or visited the hospital you know that these costs can add up quickly.  To acurately determine how much you should purchase really requires a conversation with an agent to assess your risks, the assets you want to protect and how much risk you are comfortable with for potential out of pocket expenses.

 

How can I keep my auto premiums down?

Generally, the longer you drive without major citations or accidents, the lower your premium will be. You may also qualify for discounts based on safety features on your vehicle.   Also, if you insure additional cars or your home with our agency you can save on all your premiums. For further information, feel free to contact us for more information at 888-568-HUNT (4868)

Bodily Injury & Property Damage Liability

Now this is a fun topic and one that really needs to be discussed in great detail and quite frankly should be discussed by your insurance agent with you on an annual basis!

Bodily Injury and Property Damage Liability is by far the one area that 99% of the people I speak with on a daily basis discussing insurance options is completely under insured with respect to their auto insurance policies!!  Why, you may ask?  Liability is one of those nasty little responsibilities that it really doesn’t matter what you have today when you are liable for damages to somebody else, it matters how much you will have over your lifetime.  For example, you’re in an automobile accident and you cause more injury than you have insurance for; you are liable for everything above and beyond that amount!! Even if you can’t pay it!  Now some usually say you can’t get blood from a turnip but the truth of the matter is when it comes to liability they really can!  Your house, your paycheck for the rest of your working life, the assets in your home, etc.. can all become part of a liability claim.

Now then, since I have your attention lets discuss what this coverage does and how to determine how much you have.  This coverage compensates persons who claim that they were injured or suffered property damage because of the ownership, maintenance, or use of your insured auto(s), up to the limit selected on your policy.  Typically this coverage is written something like 25/50/10 which is the Washington State minimum coverage $25,000 bodily injury / $50,000 per occurrence / $10,000 property damage.

Lets talk about that a little further, the state minimum coverage is entirely too low for virtually everybody on the road and is really only intended to help give a buffer to you should you cause an accident.  Realistically $25k in coverage isn’t near enough for any accident that causes bodily injury especially if there is a loss of life or limb!  The per occurrence portion is how much they will cover in an accident so in the example above that will cover 2 people at the maximum amount of $25k; what if there are 3 people injured in the other car?  Well, then you take the $50k and divide it by 3 and now you have coverage for up to $16,666 per person if you were to spread it evenly (example purposes only).

Now onto the property damage amount of $10k in the example… this is the amount they will pay up to for property damage (building, pole, fence, other car, etc.).  How many cars on the road are worth $10k or less?  I wouldn’t recommend carrying less than $100,000 in property damage and your bodily injury should be more like $250k/$500k.

As you can see bodily injury and property damage liability is one of the most important coverages in your auto policy.  When making a decision regarding how much is right for you it is crucial to discuss your options with your insurance agent including your personal exposures such as being a family chauffeur for other people’s children to the soccer game or discussing your personal assets and how to ensure they are adequately covered should the unexpected happen to you.