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Also see Renters Insurance: Shattering A Few Myths

Filing Your Auto Insurance Claim

     What Are The Basic Types Of Claims?

There are two basic types of claims. The first involves loss or damage to your automobile. The second type is a liability claim which arises when someone else suffers an injury or damage to their property because of something you did or didn't do. For example, if you run a stop sign and hit another vehicle, you could be liable for the damages to that vehicle and any injuries that may have occurred. Liability claims may result in a lawsuit against you. To cover these two key areas, most auto policies subdivide the coverage into the following categories:

  • Auto liability covers damage to other people's property and injuries to the people.
  • Collision covers damage to your own vehicle.
  • "Other than collision" or "Comprehensive" coverage pays to repair damage to your car caused by fire, theft, vandalism, natural disaster or similar events.
  • Medical payments, termed "good faith" coverage, guarantees immediate medical payments for you, your passengers and other parties involved in the accident, regardless of who was at fault. The point is to help someone who is injured get the necessary medical attention and deal with the issue of fault and insurance later.
  • Uninsured and underinsured motorists coverages protect you if you are in an accident with others who themselves do not carry enough insurance or have no liability insurance.

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What Should I Do Immediately After An Accident?

For several reasons, the first conversation you have should be with your agent. Chances are your policy includes a stipulation that the insurance company be notified promptly. Conversations with others about the situation can inadvertently waive some of your rights in the case.

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When Do I File The Claim?

If you do suffer property damage or injury or incur liability, it is time to file a claim. You will be asked to fill out a claim form - the formal document on which you request benefits to be paid according to the terms of the policy. Be complete and supply as much detail as you can and, of course, be truthful. All this will help your adjuster do his or her job and therefore speed the process.

To support your claim, it may be necessary to supply the insurance company with some documentation such as "proof of loss" form, auto repair and medical bills and a copy of the police report.

Be sure to keep a copy of your claim and any associated paperwork for your records. You may need to refer to these materials in the future.

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What is a Deductible?

When you file a claim for an automobile loss, the payment made by the insurance company is subject to a deductible. Basically, when you purchase your policy, you agree to pay the first specified amount of any damage as your share of the cost repair or replacement. The insurance company adjusts its rates accordingly, charging less for those who agree to pay a larger first share or deductible. For example, if your car should sustain damages costing $2,000 to repair and you have a deductible of $250, you would pay $250 and the insurance company would pay you $1,750 which is the $2,000 minus your deductible.

What's a Claim Adjuster?

Once you have reported your claim to your agent, he or she will contact your insurer's claim adjuster - usually within the hour. The adjuster will begin the settlement process, the length of which will depend on the cooperation of the other party, if any. While some claims are relatively easy and straightforward, others are more complicated.

Your adjuster is charged with investigating the claim and then making a recommendation to the insurance company. The recommendation can be to accept the claim and pay the full amount requested, accept part of the claim and make partial payment or refuse the claim and make no payment. The insurance company will then make a decision regarding your claim and notify you of its final decision.

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What If You Don't Agree With The Adjuster?

The amount of compensation offered can vary according to the adjuster's analysis of your claim. Keep in mind, if you feel it is too low, you do not have to accept the first amount offered. While you may have to do some research to prove a higher payment is valid, it may be worth it. Your agent should be able to assist you in reaching a fair settlement.

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Also see Filing Your Auto Insurance Claim

 Renters Insurance: Shattering A Few Myths

Do renters need insurance?

Many renters overlook or underestimate their insurance needs because they believe only "homeowners" need insurance. However, just as most of us would not think of owning an automobile with insurance, renters need protection for their personal possessions and from liability. Even the smallest apartment can easily contain personal items worth thousands of dollars. And all of us are at risk for liability.

At least once during a lifetime most people will rent a home. Paying rent instead of a mortgage payment does not make your personal belongings any less valuable. Should your belongings be damaged or destroyed, should someone suffer an injury in your home, renters insurance can off the peace of mind of knowing that you are protected.

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What are the common myths regarding renters insurance?

  • Myth #1 - Insurance is too expensive. Some renters fail to insure their personal possessions because they believe insurance is too expensive, but renters insurance is typically available for as little as $125 a year.Myth #2 - My landlord's insurance protects me. Many renters think they are protected under their landlord's policy. However, the property owner's insurance covers the building itself and seldom covers a tenant's possessions. Clarify this with your landlord before signing a lease.
  • Myth #3 - My landlord is liable if someone trips in my apartment and gets injured. Again, the owner's policy may specifically exclude liability for something that occurs within your rented residence. You could be held liable for injury to another's property if the incident occurred within your rented residence.

How much will renters insurance cost me?

Renters Insurance, because you are not insuring a building, is surprisingly inexpensive. Of course, like all property protection policies, the value of property to be insured and other risk factors are weighed by the insurance company to determine your premium. As with your automobile insurance, your renters deductible is the amount you agree to pay in the event of a loss. For example, if your $2,000 stereo is stolen from your apartment and you have a deductible of $250, the insurance company would pay you $1,750, which is $2,000 minus your deductible.

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What is covered by renters insurance?

Renters Insurance offers the same general personal property coverage and liability protection as a homeowners policy. Property insurance covers the cost of repairing or replacing personal property that has been damaged, destroyed or stolen. Your property is covered both within your home and when you are traveling.

You also receive liability protection. If someone suffers an injury or damage to their property because of something you did or did not do, you could be liable. If, for example, your grandmother's oak dresser dents the walls in your apartment's lobby while you are carrying it into the building, you could be held liable. Likewise, if a fire starts in your apartment and spreads throughout the building, and you are deemed at fault, you could be held liable for damage to the entire building.

In addition, most renters policies include coverage for additional living expenses (also called "loss-of-use" coverage) if you are forced by fire or other damage to temporarily live elsewhere.

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What if the limits of the policy are not enough to cover some of my more valuable items? What are "floaters" and "endorsements?"

Most policies limit the amount of reimbursement for theft of valuable items, such as jewelry, furs, silverware and guns. If you have some particularly valuable items in these categories, you may need to purchase additional coverage called a "floater." These types of policies cover each item individually and are usually quite expensive.

Other additions to your renters insurance that add or change the policy's provisions are called "endorsements." Some endorsements extend the number of risks insured against, some cover property otherwise excluded and some increase the amount the insurer will pay for a covered loss.

Also, it is important to note that the standard policy excludes damage from earthquakes and floods, so talk to your agent about coverage for those incidents.

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How is the value determined?

If your property does get damaged, destroyed or stolen, the insurance company will use one of two ways to determine its value:

  • Actual Cash Value - The replacement cost of the item minus depreciation. For example, a new television set may cost $500. If your 7-year old TV set gets damaged in a fire, the value might have depreciated 50%. Therefore, the amount of your coverage for that item would be $250.
  • Replacement Coverage - The cost of replacing an item without deducting for depreciation. So today's cost for a TV set with features similar to the 7-year old one damaged by fire would still determine the amount of compensation. If it still costs $500 today, that would be the amount of coverage.

You can select which type of coverage you would prefer. Having replacement coverage adds only about 10%-15% to the premium and may well be worth the slight increase.

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