Telematics Auto Insurance
Written by webtechs

Telematics Auto Insurance

Telematics, also known as a telematics system, is a technique for gathering data on your driving patterns and mileage. The majority of the time, insurers use telematics data to provide customized driving advice, safe-driving incentives, or potential price breaks on your auto insurance coverage.

Telematics may also come into play if your insurer offers mileage-based insurance policies (sometimes called “pay-per-mile insurance”) (sometimes called “pay-per-mile insurance”).

Usually, a mobile app or a small telematics device supplied by your insurance provider collects telematics data. If your insurance company offers an auto tracking device, you can connect it to your car’s OBD-II port, which is typically found under the dashboard. This port is typically found on vehicles manufactured after 1996. The Insurance Information Institute claims that in some cases, telematics data can also be obtained directly from your car manufacturer (III).

You consent to allowing the vehicle, gadget, or app to send this information to your insurance provider if you sign up for a telematics program with your insurer.

There could be three advantages if you look into your insurer’s vehicle telematics program:

1. Individualized driving criticism

Telematics data typically provides real-time details about your driving style and mileage. For instance, a telematics device or app logs your speed, distance traveled, and braking force. The time of day that you drive can also be examined by this technology. You can become a safer driver by becoming more conscious of your driving behaviors with the aid of this data.

You may be able to save money by choosing to participate in a program. If you avoid risky driving behaviors, you may save more on your auto premium than someone who is a riskier driver, according to the III. This is because some telematics data will likely incorporate your personalized driving behaviors into your insurance rating. You may have more control over your auto insurance costs as a result.

2. Savings on auto insurance or safe-driving incentives

According to the III, you might be eligible for discounts and rewards simply for enrolling in a telematics program and for future rewards for driving safely. Drivers might receive incentives for refraining from risky behaviors like hard stops, nighttime driving, or speeding, for example.

3. Car insurance based on mileage

Another essential component of pay-per-mile auto insurance is a telematics system (also known as usage-based insurance). Your insurer may use a mobile app or a device you plug into your car to track the number of miles you drive if you choose to participate in this type of program. For every mile you drive, you might be assessed a per-mile fee in addition to a daily base fee. You might be able to check your travel and daily expenses using an app or website provided by your insurer.

With pay-per-mile insurance, you typically only pay for the miles you actually travel. This frequently offers you additional cost savings if you’re a low-mileage driver. In other words, you might pay less if you drive less.

A telematics program could help you save money and improve your driving if you have safe driving habits.

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Extra insurance for a new car: 3 key coverages
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Extra insurance for a new car: 3 key coverages

There is nothing quite like a brand-new automobile, from its smell to its performance. What would you do if you had to replace your brand-new automobile? It’s difficult to imagine your brand-new vehicle being scratched, let alone totaled.

In addition to the state-required minimum auto insurance coverage for a new vehicle, you may be able to purchase three additional coverages that provide financial protection in the event that your vehicle is irreparably damaged. These policies include:

  • Automobile replacement coverage
  • Coverage for repair coverage and
  • Loan or lease shortfall coverage

Some insurers bundle these coverages together. When you should consider this type of package and what each coverage protects, continue reading.

How do insurance companies define “new car”?

The definition of a “new” vehicle differs between insurers. Before selling insurance policies designed for a “new” car, insurance companies may require one or more of the following:

  • The automobile model cannot be older than two or three years (for example, a “new” car insured in 2022 cannot have been manufactured before 2019)
  • The policyholder must be the vehicle’s original owner.
  • You should also be aware that typically, new car coverage expires when the vehicle is no longer eligible. Additionally, the coverage typically applies only to the new vehicle for which it was purchased, and not to all vehicles on the policy.

Isn’t standard auto insurance sufficient?

Certain coverages, such as collision and comprehensive, may help pay for repairs, minus the deductible and up to the policy’s limits. Nevertheless, if the vehicle is deemed a total loss, your insurance company will likely pay only its current market value (called the “actual cash value”).

This can be problematic for new car owners. According to the Insurance Information Institute, new vehicles can lose up to 20 percent of their value in the first year, and standard auto insurance policies typically cover the actual cash value, which is typically less than the purchase price.

This means that if your brand-new vehicle is destroyed in a covered loss, the insurance reimbursement check may not be sufficient to purchase another brand-new vehicle. If you also have an auto loan, you would be responsible for paying off the remaining balance regardless of whether or not you can use the vehicle.

Important coverages for a new automobile.

The following coverages may protect you financially and get you back on the road if your new vehicle is totaled or requires extensive repairs.

Coverage for the replacement of a brand-new vehicle.

This coverage may help pay to replace a totaled new vehicle. With this coverage, your policy may allow you to replace a totaled vehicle with a brand-new vehicle of the same make, model, and equipment, or it may specify whether a comparable model or a certain dollar amount is available.

Coverage for the provision of repairs.

Some policies may also cover the cost of repairs in the event that your new vehicle sustains a partial loss, regardless of its actual cash value. Repair provision coverage may help pay for repairs to a damaged vehicle based on its replacement cost, without depreciation taken into account. However, keep in mind that coverage limits still apply.

Loan or lease default protection.

Gap insurance may help pay the difference between the amount owed on a car loan or lease and the car’s actual cash value in the event of a total loss. Even if your vehicle is no longer operable, you are still liable for any outstanding loan or lease payments. Therefore, if the insurance company’s reimbursement check is insufficient to cover what you owe, gap coverage may help pay off the remaining balance on a loan or lease, so you are not left paying for a junked vehicle.

Driving a brand-new car can be a lot of fun, but replacing one may come with some unexpected costs, given that the average price of a new vehicle exceeds $36,000. Consider new car replacement coverage, repair provision coverage, and gap coverage, or a package that includes these coverages, if you have a new car.

Auto Insurance Quotes

From offering liability protection to you and your family to helping you get reimbursed for personal property damage, auto insurance provides many types of coverage. Learn more about Auto Insurance Coverage or get a free auto insurance quote from Klimes Insurance today.

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Extra insurance for a new car: 3 key coverages
Written by webtechs

Insurance for leased vs. financed cars

When deciding whether to buy or lease your next vehicle, it is essential to understand which insurance coverages may be required. Some coverages may be mandated by law or your lender, whereas others may be optional for a financed or leased automobile.

  • Insurance for a leased vehicle
  • According to the Insurance Information Institute, even though you do not “own” a leased vehicle, you are still required to carry your own insurance on it (III). Consider the following coverages for a leased vehicle.
  • Coverages for auto insurance mandated by law

Liability protection:

The majority of states mandate that drivers carry a minimum amount of liability insurance. If you cause a car accident that injures or destroys someone else’s property, liability coverage helps pay for their expenses.

Coverage for uninsured and underinsured motorists:

Depending on your location, you may be required by law to carry this coverage on your auto insurance policy. Uninsured motorist coverage may help pay for your medical expenses if you are struck by an uninsured driver. Underinsured motorist coverage functions similarly if you’re hit by an underinsured driver whose liability coverage limits are insufficient to pay for your medical expenses. In some states, personal injury protection may be required in lieu of or in addition to uninsured and underinsured motorist coverage.

Insurance protections required by your landlord

The leasing company is the owner of your leased vehicle. According to the III, to protect its financial interest in the vehicle, the finance company will likely require collision and comprehensive coverage as part of your auto policy.

Collision protection:

If you hit another vehicle or object, regardless of who was at fault, your insurance will help pay for the damages.

Comprehensive protection:

Helps pay for repairs if the vehicle is damaged by something other than a collision, such as vandalism, theft, or a falling object.

There may be insurance coverages included in your auto lease.

According to the III, many leasing companies automatically include gap coverage in your lease payments. Gap insurance helps pay off your auto loan if your leased vehicle is totaled and you are “under water” on the loan. The III recommends asking your leasing company if loan or lease gap coverage is included in your contract. If not, you may be able to purchase additional coverage through your auto insurance provider.

Auto insurance for a financed vehicle

When you purchase a vehicle, you must continue to carry liability insurance. Depending on where you reside, you may also need uninsured/underinsured motorist coverage and/or personal injury protection. Additional car insurance considerations depend on whether a car is purchased with a loan, in cash, or even the model year of the vehicle.

How auto loans affect coverage

Your lender may require comprehensive and collision coverage on your auto insurance policy if you obtain a vehicle loan. Once your car is paid off, you may be able to adjust these coverages on your auto insurance policy.

How purchasing a vehicle outright impacts insurance

Comprehensive and collision coverage are typically optional on an auto insurance policy if you purchase a vehicle without an auto loan or pay off your auto loan. A determining factor may be whether you can afford to repair or replace your vehicle out of pocket in the event of an accident.

How purchasing a new vehicle affects insurance

If you are the original owner of a vehicle that is only a few model years old, you may want to consider purchasing additional coverage for a brand-new automobile. For instance, if your brand-new vehicle is totaled, new car replacement coverage may help you purchase a comparable replacement vehicle.

What is the distinction between financing and leasing?

The primary distinction between leasing and financing is who owns the vehicle at the conclusion of the loan term. According to Consumer Reports, when you lease a vehicle, you do not own it and must return it to the titleholder when the lease period ends. During the lease period, you are essentially paying to “borrow” the vehicle, according to Edmunds. You may have the option to buy the vehicle at the conclusion of the lease.

When you finance a vehicle, you own it at the conclusion of the loan period (as long as you made all the required payments). Once you have paid off the vehicle in full, the lienholder’s name will be removed from the title, leaving only yours.

Should one purchase or lease a vehicle?

The advantages of purchasing versus leasing a vehicle depend on a number of variables, including the size of your down payment, the length of your financing agreement, and depreciation. Compare the estimated costs of a car loan versus a car lease using this calculator:

What are the advantages of leasing a vehicle?

According to Edmunds, several potential advantages of leasing a vehicle include:

  • Driving a new vehicle every few years, as lease terms are typically only two years.
  • Lower maintenance expenses, as the majority of leased vehicles are still covered by warranty.
  • Lower initial deposits and monthly payments

What are the advantages of financing an automobile?

  • According to U.S. News & World Report, some of the advantages of financing a vehicle are as follows:
  • The vehicle’s ownership at the conclusion of the loan period (assuming you made all required payments)
  • Most leases limit the number of miles a vehicle’s lessees are permitted to drive (for example, no more than 12,000 miles per year)

Auto Insurance Quotes

From offering liability protection to you and your family to helping you get reimbursed for personal property damage, auto insurance provides many types of coverage. Learn more about Auto Insurance Coverage or get a free auto insurance quote from Klimes Insurance today.

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Telematics Auto Insurance
Written by webtechs

What Is Comprehensive Insurance?

Comprehensive insurance helps pay to replace or repair your vehicle if it is stolen or damaged in a non-collision-related incident. Comprehensive coverage, also known as “other than collision” insurance, typically protects against damage caused by fire, vandalism, or falling objects (like a tree or hail). If you are financing or leasing a vehicle, your lender will likely require you to carry full coverage. If you own your car outright, this coverage is optional on your auto insurance policy.

Consider comprehensive coverage if you are shopping for auto insurance or reviewing your current policy. Discover what comprehensive insurance protects, how it differs from collision coverage, and how coverage limits and deductibles apply.

WHAT DOES COMPREHENSIVE INSURANCE COVER?

Comprehensive insurance helps cover non-collision-related damages to your vehicle, such as:

  • Theft
  • Vandalism
  • Fire
  • Natural disasters (like a hurricane or a tornado)
  • Dropping objects
  • Animal damage to your vehicle
  • A civil disturbance (like a riot that results in damage or destruction of your car)

WHAT IS EXCLUDED FROM COMPREHENSIVE INSURANCE?

  • Collision-related damage to your car
  • Collision-related property damage to another vehicle
  • Your (or your passengers’) accident-related medical expenses

DEDUCTIBLES AND LIMITS OF COMPREHENSIVE COVERAGE

When you purchase comprehensive coverage, you’ll choose a deductible, which is the amount you pay out of pocket for a covered claim. Consider a scenario in which you choose a $500 deductible and your vehicle is damaged by hail in a covered claim. If the cost to repair your automobile is $1,500, you would pay your $500 deductible and your insurance would cover the remaining $1,000.

The maximum amount your policy will pay for a covered claim is the limit of your comprehensive coverage. Typically, the limit of comprehensive coverage is the vehicle’s actual cash value.

If your vehicle is stolen, for instance, your insurance company will reimburse you for the depreciated value of your vehicle, less your deductible. In other words, if you wanted to replace your stolen vehicle with a newer make and model, you would likely need to use your own funds in addition to the insurance company’s reimbursement.

Remember that the comprehensive deductible and limit are distinct from the collision deductible and limit of your policy.

Selecting an All-Inclusive Coverage Deductible

Your insurer will offer comprehensive deductibles in increments of $500, $1,000, and $1,500, among others. Choosing a higher comprehensive deductible typically results in lower premiums, saving you money up front. However, you may be required to pay more for a covered claim. Similarly, selecting a lower comprehensive deductible will result in an increase in premiums. Your agent can assist you in determining the appropriate deductible and coverage limits.

HOW DOES COLLISION INSURANCE DIFFER FROM COMPREHENSIVE INSURANCE?

Collision coverage helps pay to repair your automobile if it is damaged in a collision with another vehicle or object, like a fence. Typically, collision coverage applies when a driver is involved in a car accident.

Comprehensive insurance is separate from collision insurance. It helps cover losses that are typically unrelated to driving the vehicle, such as theft, hail, and falling trees.

WHY OBTAIN COMPLETE COVERAGE?

If you’re unsure whether to purchase comprehensive coverage, consider the following factors:

Lenders of automobiles may require comprehensive coverage. Your lender may require you to maintain comprehensive and collision coverage on your vehicle until it is paid off if you are leasing or financing it.

How old is your automobile and what is its value? If your auto loan has been paid off, comprehensive coverage is optional. It may be prudent to determine your vehicle’s Kelley Blue Book value. If your vehicle were stolen or involved in an accident, would you be able to pay that amount to repair or replace it? If you cannot afford to make substantial out-of-pocket payments, it may be prudent to purchase optional coverages such as comprehensive coverage and collision coverage.

What are the annual premiums for collision and comprehensive coverage? The Insurance Information Institute suggests multiplying the annual premium for collision and comprehensive coverage by ten. Is your automobile worth less than that amount? Then collision and comprehensive coverage may not be a cost-effective choice for you. In other words, you may want to discuss with your agent whether it makes sense to add these coverages to your auto insurance policy.

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Telematics Auto Insurance
Written by webtechs

What is Collision Insurance?

Collision insurance helps pay to repair or replace your vehicle if it is damaged in a collision with another vehicle or object, such as a tree or a fence. When leasing or financing a vehicle, lenders typically require collision coverage. If your vehicle is paid off, collision coverage is optional on your auto insurance policy.

WHAT IS COVERED BY COLLISION INSURANCE?

Collision insurance helps cover the cost of repairing or replacing a vehicle damaged by:

collision with a second automobile

A collision with a solid object, such as a fence or a tree, could be fatal.

single-vehicle accident involving rolling or flipping

WHAT DOES COLLISION INSURANCE NOT COVER?

Not included in collision insurance coverage are:

Damage to your vehicle that is not a result of driving (examples: hail or theft)

Damage to another driver’s automobile

Medical expenses (yours or someone else’s)

COVERAGE DEDUCTIBLES AND LIMITS FOR ACCIDENTS

A collision coverage deductible is the amount you must pay before your coverage begins to pay claims. Typically, you can choose your collision deductible when you purchase coverage.

Depending on your insurer, you may have multiple deductible options, typically $0, $500, or $1,000. Choosing a lower deductible will likely result in a higher premium. Similarly, if you opt for a higher deductible, your premium may be lower. Keep in mind, however, that you will be required to pay your deductible out of pocket for covered auto repairs. Therefore, if you select a $1,000 deductible and your vehicle is later damaged in a covered accident, you will be responsible for $1,000 in repair costs. Typical deductibles range from $250 to $1,000; however, the value of your vehicle should be considered when determining your deductible amount.

There is a limit on collision coverage, which is the maximum amount your policy will pay for a covered claim. Your collision coverage limit is typically your vehicle’s actual cash value (its value minus depreciation).

For instance, suppose your vehicle is destroyed in a covered collision. Your insurer would send you a check for the depreciated value of the vehicle, less the deductible. Keep in mind that “depreciated value” may prevent you from replacing your old vehicle with a newer make and model. You would likely need to use some of your own funds to accomplish this.

WHY PURCHASE COLLISION INSURANCE?

If you owe money on your vehicle or are leasing it, collision coverage is typically required by your lender or leaseholder. If your vehicle is paid off, however, you have the option of purchasing collision coverage.

One factor to consider is how much it would cost to repair or replace your vehicle in the event of an accident. If you couldn’t afford to repair or replace your vehicle after an accident, collision coverage could provide you with peace of mind.

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Telematics Auto Insurance
Written by webtechs

What To Expect When You File A Car Insurance Claim

Even the most cautious drivers are susceptible to being involved in a car accident. At the scene of an accident, you should take several critical steps, including ensuring that everyone is safe, calling the authorities, and exchanging information with any other drivers involved.

When the time comes to file a car insurance claim following an accident, it’s also beneficial to understand what information you may be required to provide and how your insurance coverage works. Knowing what to expect can help to expedite the claims process and ensure that funds to repair your vehicle are received in a timely manner. Additionally, you may wish to inquire with your insurer whether they require you to report a claim within a specified time period.

Bear in mind that while each insurance company handles claims differently, many of the steps are the same. The following provides an overview of what to anticipate during the insurance claim process.

INFORM YOUR INSURER ABOUT THE ACCIDENT

When you submit a claim to your insurer, the Insurance Information Institute (III) states that you will be required to provide information and documentation regarding the accident. According to the III, you may wish to collect the following information:

Individuals involved in the accident should provide their names, contact information, insurance information, and vehicle information.

The location, the time of day, and the weather

Photographs of automobile damage

Officers’ names and badge numbers who responded to the incident

Obtain a duplicate of the accident report

CONTACT YOUR INSURANCE COMPANY WITH QUESTIONS ABOUT YOUR COVERAGE

Another critical aspect of the claims process is comprehending your auto insurance policy and its coverage provisions. The following are some points to consider or inquire about when filing a car insurance claim:

YOU ARE ELIGIBLE FOR A DEDUCTIBLE

When you purchased auto insurance, you chose deductibles for specific coverages, such as collision or comprehensive. Ascertain that you understand the amount of your deductible — this is the amount you will have to pay out of pocket for vehicle repairs before insurance coverage kicks in.

For instance, suppose you have a $500 collision coverage deductible and your vehicle sustains $1,500 in damage. Your deductible will be deducted from the amount of your covered claim, and your insurance company will pay for repairs up to $1,000.

COVERAGE FOR TRANSPORTATION EXPENSES

If your auto insurance policy includes transportation expense coverage (occasionally referred to as rental reimbursement coverage), it may help cover the cost of a rental car or other modes of transportation while your vehicle is being repaired. Inquire with your insurer about the reimbursement process, particularly before driving a rental car off the lot. Additionally, you should confirm the coverage limits of your policy (for example, your insurer may pay up to $30 per day for a rental car for a specified period of time).

PERIOD OF TIME IN WHICH YOU HAVE TO SUBMIT A CLAIM

It’s a good idea to inquire with your insurer about any time constraints on filing a claim, the III advises. That’s because if you do not submit your claim and all required documents within your insurer’s time limit, you may be ineligible for assistance with vehicle repairs or medical bills. Additionally, you should keep in mind that the deadline for filing a claim varies according to the type of claim you are filing. For instance, the timeline for filing vehicle damage claims may be different than the timeline for filing personal injury claims. The time period for filing a claim varies by insurer and is determined in accordance with any applicable state laws, according to Thomson Reuter’s FindLaw.

OBTAIN AN ESTIMATE FROM THE INSURANCE ADJUSTER AND COLLABORATE WITH HIM

Typically, your insurance company will send an adjuster to inspect your vehicle and determine what was damaged during the accident, as well as investigate the losses. This information assists the adjuster in determining who is to blame for the accident. They will also provide an initial estimate of the cost of repairs (parts and labor), according to the III.

Certain insurance companies may require you to obtain a repair estimate. Typically, the repair shop will inspect the damage and submit a report to the insurance company. According to the III, the insurance company will then consider the repair shop’s estimate when determining the amount of money they will pay toward your vehicle’s repairs.

REPAIR YOUR CAR

You have the right, under the III, to select the repair shop that will work on your vehicle. Additionally, you have the right to request that the body shop repair your car using original equipment manufacturer (OEM) parts rather than less expensive “after-market” parts. Bear in mind, however, that the OEM parts used by the shop may be new or recycled, depending on how your insurer has written the policy. Additionally, some insurers may write auto insurance policies that exclude OEM parts entirely. If you desire OEM parts in this case, you may be responsible for the cost difference between the parts included in the adjuster’s estimate and the OEM parts.

When it comes to vehicle repairs, your insurance company may pay the repair shop directly or may pay you and leave the bill to you.

If your vehicle is totaled in an accident covered by your insurance policy and you have comprehensive or collision coverage, your insurer will pay you the vehicle’s actual cash value (minus your deductible). The actual cash value of your vehicle is the depreciated value. This money would then be used to purchase a new vehicle. If you owe more on your car than it is worth, gap insurance may assist you in repaying your loan.

Following an accident, you’ll likely want your car insurance claim to proceed as smoothly as possible in order to get your vehicle repaired and back on the road. Contact your local insurance agent if you have any questions about the claims process or would like to review your auto insurance coverages.

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When Is A Car Considered Totaled?
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When Is A Car Considered Totaled?

In general, a car is considered totaled when the cost of repair exceeds the value of the vehicle. Certain states have enacted legislation defining a totaled vehicle according to specific thresholds. In Alabama, for example, a vehicle may be declared totaled if the damage exceeds 75% of its value. If a vehicle is worth $5,000 and the repair estimate is $4,000, it is likely to be considered totaled.

In other instances, the insurer determines whether or not a vehicle is a total loss.

Comprehensive and collision coverages assist in the cost of replacing a totaled vehicle. If you’re leasing or financing your vehicle, these two distinct coverages are typically required on your car insurance policy. They are not required if your car is paid off. However, if your vehicle is totaled and you lack comprehensive or collision coverage, you may have to pay for a replacement vehicle out of pocket.

WHAT IF MY CAR IS TOTALLY DESTROYED IN AN ACCIDENT?

If you’re involved in a car accident, there are a few basic steps you should take both before and after your vehicle is declared a total loss:

Contact your insurance agent to initiate a claim.

According to repair costs, your insurer will determine whether the vehicle is a total loss.

Your insurer will pay the actual cash value of the totaled vehicle, less your comprehensive or collision deductible.

HOW IS THE VALUE OF MY CAR DETERMINED?

To determine the value of your car (referred to as the “actual cash value” in insurance parlance) at the time of the accident, insurers typically consider a variety of factors, including the vehicle’s age, condition, mileage, and resale value, in addition to the selling price of comparable vehicles in your area.

DO I REMAIN RESPONSIBLE FOR PAYING A LOAN ON A TOTALED CAR?

If you’re financing a totaled vehicle, your insurance company will almost certainly make the claim check payable to both you and your lender, which means you’ll need to work out a payment arrangement with your lender. Typically, the lender will be reimbursed first, followed by payment to you of any remaining funds.

It is possible that you owe your lender more than the insurance payment received. In that case, you are responsible for the remainder of the lease or loan balance. For instance, suppose you owe $15,000 on your car loan but the value of your vehicle has depreciated to $13,000 when it is totaled. If you have collision coverage, your insurer will reimburse you for the vehicle’s actual cash value, which is $13,000 in this case. You would be required to pay that amount to your lender, as well as the remaining $2,000 out of your own pocket.

Adding loan or lease gap coverage to your auto insurance policy is one way to protect yourself from having to pay a lender directly for a totaled vehicle. Depending on your insurer, this optional coverage may be included in a package or purchased separately. Additionally, it may be available only for brand-new vehicles.

HOWEVER, WHAT IF THE ENTIRE LOSS WAS NOT MY FAULT?

In some instances, a totaled vehicle may not be the fault of anyone. As an example, suppose a tree falls on your parked car and your insurer declares it totaled. If you have comprehensive coverage on your car insurance policy, it is likely that you will be reimbursed for the vehicle’s actual cash value (again, minus your deductible).

If your car is totaled as a result of another driver’s negligence, your collision coverage may kick in first. Your insurer, on the other hand, may seek reimbursement from the other driver’s insurer to cover the loss. In some instances, this may imply that you will also be reimbursed for the deductible deducted from your insurance payout.

AIRBAGS HAVE BEEN DEPLOYED FROM MY CAR — IS THIS A TOTAL LOSS?

If the airbags in your vehicle deploy during a collision, this does not necessarily mean your vehicle is a total loss. Your insurance adjuster will evaluate the situation and determine whether the cost of replacing the airbags and repairing your vehicle will exceed the vehicle’s actual cash value. If the cost of repairs is less than the value of the vehicle, it is unlikely that the vehicle will be declared a total loss.

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When Is A Car Considered Totaled?
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Insurance For Leased Vs. Financed Cars

If you’re debating whether to buy or lease your next vehicle, you should be aware of the insurance coverages that may be required in either case. Some insurance coverages are required by law or by your lender, while others are optional for a financed or leased vehicle.

INSURANCE FOR A RENTED CAR

According to the Insurance Information Institute, even if you don’t “own” a leased car, you must maintain your own insurance coverage (III). For a leased vehicle, there are a few coverages to consider.

COVERAGES REQUIRED BY LAW FOR CAR INSURANCE

Liability insurance: Most states require drivers to have a certain level of liability insurance. If you cause a car accident that injures someone or damages their property, liability coverage can help pay for their expenses.

Uninsured and underinsured motorist coverage: Depending on where you live, having this coverage on your car insurance policy may be required by law. Uninsured motorist coverage may help pay your medical bills if you’re hit by a driver who doesn’t have car insurance. If you’re hit by an underinsured driver whose liability coverage limits aren’t high enough to cover your medical bills as a result of an accident they cause, underinsured motorist coverage kicks in. Personal injury protection may be required in some states instead of or in addition to uninsured and underinsured motorist coverage.

YOUR LEASE HOLDER REQUIRES INSURANCE COVERAGES

Your leased car is owned by the company that financed it. According to the III, the finance company will likely require you to carry collision and comprehensive coverage as part of your auto policy to protect its financial interest in the vehicle.

  • Collision coverage: Assists in the repair of your vehicle if you collide with another vehicle or object, regardless of fault.
  • Comprehensive coverage: Assists with the cost of car repairs if the vehicle is damaged by something other than a collision, such as theft, vandalism, or a falling object.

COVERAGES FOR INSURANCE MAY BE INCLUDED IN YOUR CAR LEASE.

According to the III, many leasing companies automatically include gap coverage in your lease payments. If you’re “under water” on your auto loan and the car you’re leasing is totaled, gap insurance can help you pay it off. Ask your leasing company if loan or lease gap coverage is included in your contract, according to the III. If not, your insurer may be able to provide coverage as part of your car insurance policy.

INSURANCE FOR A FINANCED VEHICLE

You will still be legally required to carry liability insurance when you purchase a vehicle. Uninsured and underinsured motorist coverage, as well as personal injury protection, may be required depending on where you live. Additional car insurance considerations vary depending on whether you buy a car with a loan or outright, as well as the model year of the car you buy.

HOW INSURANCE IS AFFECTED BY CAR LOANS

Your lender may require comprehensive and collision coverage on your car insurance policy if you take out a loan for a vehicle. Once your car is paid off, you may be able to change these coverages on your car insurance policy.

HOW DOES OUTRIGHT BUYING A CAR AFFECT INSURANCE?

Comprehensive and collision coverage are typically optional on your car insurance policy if you buy a car without taking out a loan (or if you pay off a loan). If you get into an accident, whether you can easily afford to repair or replace your car out of your own pocket may be a deciding factor.

HOW DOES BUYING A NEW CAR AFFECT YOUR INSURANCE?

If you’re the first owner of a car that’s only a few model years old, you might want to consider purchasing additional coverage designed for new cars. If your brand-new car is totaled, for example, new car replacement coverage may help you purchase a new vehicle of a similar make and model.

CAN YOU EXPLAIN THE DIFFERENCE BETWEEN LEASING AND FINANCING?

The most significant distinction between leasing and financing is who owns the vehicle at the end of the loan term. According to Consumer Reports, when you lease a vehicle, you do not own it and must return it to the titleholder when your lease period ends. According to Edmunds, when you lease a vehicle, you are essentially paying to “borrow” the vehicle for the duration of the lease. At the end of your lease, you may have the option to buy the vehicle.

When you finance a vehicle, at the end of your loan term, you own the vehicle (as long as you made all the required payments). The lienholder’s name will be removed from the vehicle title once you’ve paid off the loan, and the title will be solely in your name.

WHICH IS BETTER: BUYING OR LEASING A CAR?

The advantages of buying a car versus leasing one are determined by a number of factors, including the amount of your down payment, the length of your financing agreement, and depreciation.

WHAT ARE THE ADVANTAGES OF RENTING A VEHICLE?

The following are some of the potential benefits of leasing a car, according to Edmunds:

Because lease periods are typically only two or three years, you’ll be driving a new car every few years.

Because most leased vehicles are still under warranty, maintenance costs are lower.

Monthly payments and down payments are both lower.

WHAT ARE THE ADVANTAGES OF CAR FINANCING?

Some of the advantages of financing a car, according to U.S. News & World Report, include:

  • At the end of the loan period, you will own the vehicle (assuming you made all required payments)
  • There are no mileage restrictions: Most leases limit the amount of mileage a leaseholder can put on a vehicle (for example, no more than 12,000 miles per year)
  • Trying to decide whether to lease or buy a car? Speak with a local insurance agent for more information on insuring your preferred vehicle.

Auto Insurance Quotes

From offering liability protection to you and your family to helping you get reimbursed for personal property damage, auto insurance provides many types of coverage. Learn more about Auto Insurance Coverage or get a free auto insurance quote from Klimes Insurance today.

More Articles About Insurance

What Not To Say To An Insurance Company After A Car Accident
Written by webtechs

What Not To Say To An Insurance Company After A Car Accident

If you are involved in an automobile insurance company, your insurance company may be able to help you pay your medical bills and repair your vehicle. Conversations with your insurance company, on the other hand, should be strategic. Any of the following should be avoided:

Anything… Immediately Following an Accident

After an accident, don’t call your insurance company right away. You might be shocked, perplexed, or under a lot of pressure. Prioritize your medical needs while also safeguarding your legal rights. Then you can focus on getting in touch with the insurance company. Keep in mind that your goals and those of the insurance company are very different. The insurance company wants to settle the case as quickly as possible for the least amount of money possible, whereas your goal is to get the most money possible for your claim.

It was entirely my fault.

Avoid taking responsibility for the accident. When you do describe the accident, be as objective as possible and avoid adding personal opinions. The insurance companies can work out who was at fault for the accident among themselves. There could be factors you’re not aware of, such as faulty vehicle parts, a distracted driver, or a difficult-to-see traffic sign. Even if you are found to be at fault, the other driver may have played a role in the accident and be at fault as well. Avoid admitting fault in front of the other driver, police, or your insurance company, as these statements could be used against you later.

I’m not hurt.

Make no statements that you do not know to be completely true. While some injuries are obvious, others are not. You may be unaware that you have internal bleeding or a brain injury. Bruises and other signs of injury can take a long time to appear. It’s possible that your neck or back will start hurting a few days later. If you do experience pain, make an appointment with a doctor. You should not sign any medical release forms from the insurance company until you have spoken with an attorney.

This is my official declaration.

Wait until you’ve spoken with a personal injury attorney before making an official statement that will be recorded. It is not necessary for you to have your statement recorded. The insurance company may take what you say out of context or misinterpret it until it is manipulated to serve their goal.

I believe…

It’s fine to say “I don’t know” if you don’t have a factual answer to give. Don’t guess or opine on a solution. This could be true of your driving speed, distance calculations, or other estimates. Simply avoid making these kinds of guesses.

Other People’s Names

When dealing with your insurance company, stick to the basics. Don’t give them the names of your relatives, friends, or doctors. You may be asked to provide information about what you told these people and their contact information if you end up in court.

Accepted

The majority of insurance companies’ initial settlement offers are low-ball offers. Avoid accepting a settlement offer that does not fully compensate you for your injuries, even if you have mounting medical bills and are losing wages while out of work. Before accepting any settlements, consult with a personal injury attorney so that he or she can advocate on your behalf and negotiate a fair settlement.

I don’t have access to a lawyer.

The insurance company is more likely to treat your claim with respect and attention if you hire an experienced personal injury attorney. A personal injury lawyer often has more experience than a layperson with insurance laws and estimating the true value of a claim in order to account for both present and future damages. Damages may include loss of future earning potential, loss of enjoyment of life, loss of consortium, and pain and suffering, in addition to property damage, lost wages while you were recovering, and property damage.

Assistance with Legal Matters

It is critical to tell the truth and not lie when dealing with insurance companies. Individuals may, on the other hand, overindulge in information that is only used to harm them and their claim. Consult a personal injury lawyer about your case and get specific advice on what statements you should make to the insurance company.

Auto Insurance Quotes

From offering liability protection to you and your family to helping you get reimbursed for personal property damage, auto insurance provides many types of coverage. Learn more about Auto Insurance Coverage or get a free auto insurance quote from Klimes Insurance today.

More Articles About Insurance

Telematics Auto Insurance
Written by webtechs

Car Insurance Frequently Asked Questions

Depending on the coverages you choose, a car insurance policy may help protect you and your vehicle in a variety of situations. Occasionally, you may have questions about your coverage prior to an occurrence—for example, “I’m going to rent a car; do I need additional insurance?” However, more frequently than not, questions arise following a mishap—for example, “I collided with a deer. Am I protected?”

In either case, it’s a good idea to brush up on some frequently asked car insurance coverage questions now, so you’re prepared for either type of scenario in the future.

Pull a parade float.

As long as you are volunteering and not being compensated, insurance will typically cover you. In the event that something does occur, ensure that you understand how your insurance may assist in protecting you.

Rent a vehicle.

Typically, a personal auto insurance policy covers a rental car while you are in the United States. According to the Insurance Information Institute, if you pay for a rental car with certain credit cards, you may discover that they include complimentary insurance (III). However, it’s critical to review your insurance coverage to ensure you have the necessary coverage in place before declining the rental company’s additional insurance.

Rent a car in another country.

Generally, your own auto insurance policy will not cover you while traveling. Each country has its own set of standards. Prior to traveling, you may wish to contact the US embassy in your destination to ascertain any rental car insurance requirements.

A moving truck can be rented.

While some auto insurance policies may cover a moving truck, the National Association of Insurance Commissioners notes that certain exclusions may apply depending on the truck’s size (NAIC). Consult your agent to determine the size of trucks covered under your insurance policy.

Employed as a driver for a ride-sharing company.

According to the NAIC, if you use your car for business purposes, your personal auto insurance may not cover you. There may be discrepancies between the coverage provided by your personal car insurance and the ride-sharing company’s insurance. However, some personal auto insurers offer optional coverage to help cover those gaps.

WHAT IS COVERED BY CAR INSURANCE…

  • Is there hail damage?
  • The answer is typically yes, if you have comprehensive coverage. Comprehensive coverage may help cover the cost of repairing dents in your car, broken windshields, and even hail-related interior water damage.
  • Is there damage from potholes?
  • In general, collision coverage may help cover damage to your vehicle caused by hitting a pothole, but most car insurance policies exclude coverage for normal tire wear and tear caused by potholes.
  • Is your windshield damaged?
  • If you have comprehensive or full glass coverage, your insurance company may be able to assist you. These coverages may assist you in repairing or replacing your windshield.
  • Is there tree damage?
  • If you have comprehensive coverage, your insurance company may assist you in repairing or replacing your vehicle, as long as the damage does not exceed the value of your vehicle.
  • Are you going to hit a deer?
  • Typically, damage to your vehicle caused by colliding with a deer is covered under comprehensive coverage.
  • Is there squirrel damage?
  • If a squirrel chews on the wiring in your car, comprehensive coverage may help cover the cost of repairs.
  • Is this a case of hit-and-run?

Auto insurance may help protect you in the event that you are injured or your vehicle is damaged in a hit-and-run. Collision coverage may assist with the cost of car repairs following a hit-and-run. Uninsured and underinsured motorist coverage, as well as medical payments coverage, may assist you in paying for medical expenses following a hit-and-run.

Theft of catalytic converters?

Typically, comprehensive coverage will assist in covering the theft of automobile components.

A car that has been stolen?

Typically, comprehensive coverage assists in covering losses such as theft. If your car is stolen, contact the police and file a report. After filing the report, notify your insurance company, and if your car is leased or financed, notify the lender.

Is a friend wreaking havoc on my car?

If your friend was involved in an accident while driving your car, your insurance policy (not his) would almost certainly be used to cover any damage or injury costs incurred as a result of the accident. This, however, is contingent upon the specific coverages and limits of your insurance policy.

Bear in mind that the amount of coverage available to you will vary depending on the type of auto policy you have. If you are involved in an accident, keep in mind that you may be required to pay a deductible before your coverage kicks in fully.

If you’re unsure about the coverage included in your car insurance policy or the types of protection you may require, speak with your local agent. This way, you’ll be prepared for both future plans and accidents or damage.

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