Choosing the right coverage options for your auto policy…

Umbrella/Excess policies

This is a completely separate policy but it’s worth mentioning because they can work together with your auto insurance to provide you additional liability coverage.  They can also sometimes provide additional coverage for uninsured/underinsured motorists, which we will get into next.

Uninsured/Underinsured (UM) motorist coverage

Usually you are only able to purchase the same amount of coverage here as you carry for Liability.  So if you have, for example, $100,000/$300,000 you will likely be offered up to the same amount for this, or you can even choose to waive this coverage.  Before waiving it, consider that some studies suggest that as many as 1 in 3 drivers are either uninsured, or underinsured today (Google Ai results).  That is massive!  What is the difference between uninsured vs underinsured?

Uninsured motorist: No auto insurances

Underinsured motorist: Not carrying enough insurance based on their net worth exposure

Regardless of your political affiliation we can all admit we have invited a large number of people into America who have unfortunately been driving illegally, and without insurance.  They have unfortunately caused many deaths and injuries, and our hope is for this information to help you be better prepared.  Regardless of whether somebody is uninsured or underinsured, the net result is essentially the same to you if they do not have enough insurance to cover the value of the claim/injury they cause to you: You have out-of-pocket costs now.

Can I pursue an uninsured/underinsured motorist for injuries?

Yes, but what if they are here illegally?  Even if they are underinsured based on their net worth, consider the challenges with trying to get a garnishment of wage and/or liquidation of foreign assets, and then being able to follow through on that?  In any event our recommendation is to carry protection on your own insurance policy.  Your uninsured/underinsured coverage will likely pay out up to your total limit after any available liability insurance is exhausted from the other party first.  This can greatly help you, especially in the more likely scenario where the uninsured motorist does not have any assets or net worth to speak of.

Do I NEED medical coverage?

Well, what is your out-of-pocket max exposure on your health insurance?  Its okay if you don’t know!  We recommend contacting your health insurance provider and asking them this question.  Many people have between $3,000-$10,000 out-of-pocket max exposure.  Auto insurance medical covers your out-of-pocket costs related to injuries from a covered claim.  Things like:

• Ambulance ride

• Emergency room visit

• Medications

• Specialist services/surgeons

• Physical Therapy

• Prosthetics

• Etc. (casts, crutches, other surgeries, on and on)

Given the high-risk of injury from an auto accident we highly recommend carrying the right limit of medical coverage on your auto policy.

Accidental Death and Disabling Injury/Disability (ADD)

Did you know that for a usually small additional cost you can often add an additional limit of coverage for ADD?!  In many cases you can add up to an additional $25,000/person and often at a cost of less than $10/month!  When a covered injury occurs this pays out in addition to your other coverages which can hugely help you recover from an injury by being able to take time away from work and even home chores as-needed by giving you financial assistance to cover your bills and/or even hire somebody to come and assist you. 

Comprehensive vs. Collision coverage

Did you know you can often choose one or the other (some companies require you to carry comprehensive in order to add collision)?  How do they differ?

Comprehensive coverage is for things like weather-related damage, theft, vandalism, broken windshields from rocks thrown by other vehicles, potholes, etc.  Basically anything non-accident related as covered under your policy.

Collision coverage is from damage caused by an accident, which yes an accident can be single-vehicle (think about things like sliding off the road and hitting a tree).

You can often choose different deductibles for these coverages too.  Why would you want different deductibles?  Because you might perceive a different level of risk from one event vs the other.  Perhaps you think you are more exposed to a tree branch falling and damaging your vehicle in your driveway (Comprehensive) vs. getting into an at-fault accident (Collision).  You might consider carrying a $50 Comprehensive deductible and a $1,000 Collision deductible the this scenario.

Glass Coverage/Glass Deductible Buyback

Many insurance companies let you choose to add an additional coverage for just glass damage.  This includes coverage for side and rear windows, so whether you think somebody might try to smash in your side or rear window in an effort to vandalize your vehicle and/or steal from you, or go back to that falling tree branch scenario (we have seen moon roofs smashed out!) this can be a great value-add especially if you otherwise carry higher deductibles for comprehensive and collision.  Often times this coverage carries just a $100 deductible for glass-only claims.  

Did you know that windshields can cost hundreds, and sometimes thousands of dollars?!  Glass has become highly specialized as it has been modified to work with the additional safety and convenience systems offered by many auto manufacturers.  From projecting your dashboard display in front of you while driving, to detecting your distance from other vehicles and objects, and antiglare, antifog, and deicing systems, autoglass has become very expensive!  

Roadside Assistance vs. Separate roadside programs

Did you know you can add roadside to your auto insurance policy, and because auto insurance follows your vehicle this applies to roadside assistance for wherever your vehicle is located?  This can differ from separate roadside programs that offer coverage only for a certain distance from your home.  We recommend including Roadside on your auto policy, which often only costs a few dollars/month and can provide coverage for all of the following:

• Tire replacement

• Towing

• Out of gas

• Lockout assistance

Rental reimbursement vs. Loss of Use/Rental Alternative 

First, did you know there are different types of coverage for rental car?  Let me explain:

Rental Reimbursement: If you need a rental vehicle as part of a covered claim, you are responsible for paying the rental costs and submitting the receipt for reimbursement from your auto insurance company.  If your vehicle is in a covered repair status for weeks this could result in a very large out-of-pocket cost to you that you have to financially cover until you turn in the rental vehicle and can then submit your receipt for reimbursement.

Loss of Use/Rental Alternative: Some auto insurance companies offer what we believe is a better solution, which is to assign a daily cost value to you for each day that your vehicle is in a covered repair status, which can then be either applied fully to a rental vehicle, or can be paid out to you as an additional cash settlement, or split between these two!  

For example: Let’s say you have $75/day for loss of use, which is a wise choice if you sometimes need a larger SUV.  Let’s say though that when your claim occurs you only need a full size sedan and are able to find one for just $30/day.  You could have $30/day applied to the covered rental, and have the remaining $45/day paid out to you and the end of the claim!  If your repair period is 10 days that means you could get your rental vehicle covered and still get $450 paid out to you in addition!

*Bear in mind, rental companies will likely require you to provide a credit card to cover damage and incidentals, which are your responsibility.

Does my auto insurance cover a rental vehicle?

In general, yes, but there are some differences.  First, you should consider that many rental companies have a Damage Evaluator tool that they use to determine what types of damage they are required to repair.  This can include smaller scratches and dents that you might otherwise not want to file a claim to repair.  If this smaller type of damage occurs and they file a claim against your auto insurance, you are required to pay your deductible portion and will incur the impact of a claim against your auto insurance.

Also, if your covered rental period is 10 days but you keep the vehicle for 12 days you might be required to pay out-of-pocket for the additional days.  Also, if there is excessive amounts of dirt in the vehicle, the rental company can charge you directly for a cleaning fee, which can include smoke damage.