Are You Really Covered For That Accident?
No one plans for an accident; however, statistics show that most people will have one every thirteen years or so. Because it’s not an event that happens on a regular basis (hopefully, anyway!), those involved in an accident are confused who to contact and whose guidance is best.
Many people assume that because they have paid into their insurance company for so many years that they will take care of everything, so they call them first. Depending on your insurance policy, many things may be covered, but what people forget is that insurance companies want (have to) remain profitable to remain in business. That means they (need to) take in more money than they pay out.
No matter what their tagline, “We’re a good neighbor,” “On your side,” “You’re in good hands,” make no mistake about it. Their bottom line means the claims adjuster is going to start with the lowest possible payout. Often they have relationships with various shops around the area that agree to use generic parts that will ultimately reduce the value on your vehicle even if it looks okay.
You wouldn’t go to a loan shark for financial advice, so why would you talk to you insurance company about a fair settlement for repairing your car? Here are some things you want to ensure you have on your policy in order to get the best results if you have a claim.
OEM endorsement on your auto policy means that you are paying a little extra to ensure that you are receiving a guarantee that the repair shop use original manufacturer parts for your car, not generic aftermarket parts. If you do not choose this option, the wording in your policy will probably say that you agree to aftermarket parts unless none are available.
You’ll read a lot of articles about raising your deductibles to $1000 or even higher to save money each month on your policy. However, if you have a decent driving record and at least three years of driving experience, it’s unlikely you will save that much to make it worth it. You also need to consider there is a possibility that you may end up paying two deductibles. If you had prior damage you didn’t claim, you will have to pay the deductible to fix the old damage and then the new deductible for the new damage.
Even if you are only responsible for one deductible, you still may end up with additional out-of-pocket costs. For example, if your accident ruined one or more of your tires, the insurance company is not going to pay for four brand-new tires. They are going to take a look at only the damaged tire(s), determine how much wear is left, and give you a small amount towards purchasing a tire to replace the one or two damaged. Replacing all your tires so they are all the same with same tread could cost you thousands more.
Did you get the extras?
Many companies offer bonus coverage with Collision and Comprehensive such as roadside assistance, towing reimbursement, rental car coverage, and gap insurance. Very often these extras only cost you a few dollars extra each month, but are worth hundreds if you should have to use them. If you are a one-vehicle household, it would be a huge hassle to not have rental coverage. While your car is in the shop for repairs, rental coverage will pay up to the daily limit for a rental car and cover it as they would your own vehicle.
Roadside or towing reimbursement is usually an option, one or the other. Towing only will pay you back when you submit a receipt up to the allowable limit. Roadside often is contracted with a roadside company that you can call and they can tow you up to 100 miles. However, do not let the insurance company dictate what place they tow you to. Make sure they take you to the shop you want to do the repairs.
Gap insurance is very important if you have a loan on your car. If the worst happens and your car is totaled, the insurance company is going to seek to pay out the lowest possible amount for the value of your car. You will be stuck with the loan balance if the value is less than the loan. If there is any discrepancy between the value and the loan, this coverage would be important so you can pay off the loan and be free to replace your car without having to pay for two loans.
Speaking of repairs, here are three important tips to keep in mind when you are negotiating for a claims settlement and repairs.
- If you already have a relationship with a body shop, call them first, even before your insurance company. An honest body shop is worth his or her weight in gold. Make sure you get their advice. If they are an above-board business, they already know how to ensure your claim is entered and received properly with accurate estimates.
- Go to the dealership that specializes in your vehicle. If you have an Audi, you wouldn’t want your insurance company to cut you a check for Joe Blow Auto Repair who may or may not have experience with an Audi. The dealership mechanics and repair are often more costly, but at least you know they will use the right parts and do it right.
- Get referrals and check credentials. If neither of the first two options apply to you, you still do not want to make the mistake of letting your insurance company take full control of the payout and choosing the repair shop. Unless you purchased an auto policy by some obscure company, you choose who you want to fix your car. Check around for referrals and then check each shop’s credentials. Are they certified? Do they specialize in your model vehicle.