Nelson C. Barry Automobile Accidents Law Blog on Lawyers.com

SHOULD I GET THE "EXTRA" COVERAGE THAT IS OFFERED BY MY AUTO INSURANCE CARRIER? HOW ABOUT COLLISION COVERAGE?

Friday, June 26, 2009 by Nelson C. Barry

COLLISION COVERAGE is where your insurance company pays for the repair of you car regardless of how it gets damaged (i.e. your drunk cousin runs the car into the lake). This type of coverage is almost always required when you finance your car (i.e you have to make monthly payments for a year or two or three). In most cases, if your car gets wrecked, you still have to make your monthly car payments. If you have COLLISION COVERAGE, your insurance company will either repair your car or pay you the market value for it whichever is cheaper. If you still owe money on the car, the money from your company will allow you to pay off the note.

Many people with older cars or cars with lots of miles on them, decide it is not worth it to buy collision coverage. For these people, they can collect the cost of repairing their car from the person who caused the accident (if that person can afford to pay or from that person's insurance company but the insurance company almost always pays so little that many people are highly dissatisfied).

A common misunderstanding is that if you report the accident to your company, your rates will go up even if the accident was clearly the other guys fault. This is a mistake. If the accident is the other person's fault, I recommend you get your repairs done through your company because they will pay for the repairs to your car (or, as noted above, will pay you the value of the car if it is a total loss) and then seek to be reimbursed by the company for the guy who caused the accident. Your company almost always gets their money back so you don't have to worry about your rates going up. Your company will also be much easier to deal with and much more responsive (i.e. faster) than dealing with the other guy's company.

The amount of collision coverage is easy to determine; namely get enough to cover the cost of your car if it ever gets totaled. That way if it is totaled you get enough money to replace it (and more than enough in cases where the car is damaged but not so much as to classify it as a "total" job). And get the tow coverage (almost always included automatically but check with your agent to be safe) and the rental car coverage (so you can get a Mustang convertible and look good as you tool around while your car is in the shop.) One caveat to the rental car coverage; be sure to be on the same page as your company when it comes to how much they will allow daily for rental car coverage (usually it is about $20/per day) and as to how long they think it is reasonable for you to have the car. Almost always this depends on how long the mechanic is going to take to repair your car (but people's mechanics who take too long to fix the car usually wind up having to argue with their company about who is going to pay for the extra car rental - and the companies usually win so be sure to check in with your adjustor every few days while you are using a rental car to make sure they are ok with you continuing to use a rental car).

Ok, that is it for today. Be on the look out for my next posting where I will recommend what you should do if someone else hits you and it is their fault! (i.e. get the contact information for them and their insurance company, get prompt medical attention and take lots of pictures of the cars, the area where the accident happened, and call a lawyer who is experienced in personal injury cases to get him or her on board early).

For more information about this or other automobile accident related topics, feel free to contact me or visit my website www.nelsonbarry.com.

Posted at 13:57 PM

Topic: Automobile Accidents