Auto Insurance Explained!
Thread Starter
Three Wheelin'
Joined: Jul 2010
Posts: 1,562
Likes: 85
From: Minneapolis, MN
Auto Insurance Explained!
Auto Insurance For Dummies And Noobs!
This is a LONG read but could save you in the long run, and you may learn something!
With all accidents I have been reading about and all of the confusion about auto insurance I thought I would take the time and clear up the haze that is auto insurance! Keep in mind the from state to state and company to company coverage’s vary and this should be used as a guide and not a be all and end all. You should ALWAYS read your policy and see what you are agreeing to, it’s a long read but could save your ass in the event that you do have an accident.
The Basics:
Coverage’s
A. Collision Coverage (Coll):
This covers any damage from a collision! A collision includes but is not limited to: contact with another car, hitting a stationary object (Garage, parked car, pole, ect), hitting a dead animal or something in the roadway. Like a said there is more but these are the basics.
B. Comprehensive (Comp):
This covers any “Act of God”. A Comp claim includes but is not limited to: Animal hit (live animal), Hail, Fire, Storm damage (Inc Flood), Vandalism, and Theft. Keep in mind this does not cover theft of items in a vehicle that are not a “part” of the vehicle (i.e. CD’s, GPS, MP3 players, and in some cases sub woofers/amps).
C. Bodily Injury /Property Damage (also known as Liability):
This covers any damage to another person’s vehicle or objects. Self explanatory. If you hit someone’s car, house, motorcycle, or anything this is the coverage that covers you from having to cover the cost to fix said object or pay their medical bills! Also where the money comes from if they sue you!
This has different limits listed for example: 100/300 and a flat 100. This means you have coverage for 100,000.00 per person injured, 300,000.00 max per accident. And 100,000.00 in property damage (i.e. Vehicles, homes, signs, guard rails, ect).
D. Medical Payments:
This is coverage so if your hospitalized you auto insurance will pay up to this amount before you health insurance will take over.
E. Underinsured Motorist:
This covers if the person that hits you does not have very good coverage’s and it will cost more then they have to fix your vehicle or pay your medical bills.
F. Uninsured Motorist:
Insurance in case someone hits you and they don’t have insurance. (For medical bill, loss of wage, ect)
This was and explanation for the basic coverage’s. You will have to choose a deductable for Collision and Comprehensive. Liability has no deductable. You will have to choose you’re deductable for what you can afford. I have people all the time choose higher deductable just so they can afford a nicer car and then are screwed when they get in an accident!
CUTOM PARTS AND EQUIPMENT (CPE):
This is in all caps as this is what we here and Acurazine are all about! Most insurance companies off a policy rider or extra coverage for custom parts. Most insurance companies have a 1,000.00 standard for custom parts on their collision coverage. (look into yourself not all have this). This covers but is not limited to: ANY NON OEM BOLT ON PART ADDED TO THE VEHICLE. These items MUST be “part” of the vehicle to have coverage (that means it must be secured to the vehicle (by bolts ect)). Here is the kicker about this coverage. Let’s say you total your car and you have 2,000.00 in CPE coverage and it has and exhaust system, tint, tail lights, and NOS.
There are two forms of CPE:
Type R (Replacement): This is any part that was taken off the car and replaced with the aftermarket part. (Lighting, Exhaust, Hoods, ect)
Type A (Additional): This covers items added to the vehicle. (Tint, Turbo, NOS, Supercharger, ect)
Now using the example above lets say these are prices: Exhaust 1200.00, Tint 250.00, Tail Lights 200.00, and NOS 500.00. This is how it works. For the Type R parts (Exhaust and tail lights) the company will compare the part price to the OEM and if you paid more then it cost to replace it OEM (or Aftermarket) then you get the difference. So let’s say your OEM exhaust is 1100.00 and the taillights are 400.00. You would get the 100.00 more you paid for your exhaust and you would get nothing for the taillights. Now for the Type A you would get the whole 750.00 as this was added to the vehicle. You would get 850.00 extra on top of what the car is worth!
To be safe keep ALL your invoices for custom parts you buy so you can prove what is in and on your vehicle in case of theft or any other loss. Pay more and take out the proper coverage for your parts or you have no room to bitch!
AFTERMARKET CRASH PARTS:
This covers those aftermarket parts what everyone dreds. I am not talking the parts you added to your car these are replacement parts made by any other source then OEM. This is were reading your policy comes in VERY handy. 100% of insurance companies require aftermarket parts to be used in repairs. Now the ONLY way to get around this is to buy an OEM Endorsement. This is extra coverage that you pay for that will make it that the insurance company has to use all OEM parts in the repair of your vehicle. Not all companies have this but its worth looking into! If you don’t have this, by you paying your insurance you are agreeing to use these “alternative” parts. END OF DISCUTION!
USED OR LKQ PARTS:
Personally I am not sure why people get so bent out of shape about these parts! These are from salvage yard. When your car is totaled or deemed a total loss the insurance companies sell your car off to salvage yards and that’s where these parts come from. When an insurance company uses these parts they are NOT allowed to use any part under the Grade A class and it must be off the same make and model or newer. These are OEM parts!!! I would prefer these over Aftermarket ANYDAY! By using only grade A it must not have rust dings or dents. Now if your body shop gets something different then it’s on them not the insurance company!!!
TOTAL LOSSES:
A total loss is not what everyone thinks it is. It means that the cost to repair the vehicle exceeded the cost to pay for what it is worth. Everyone thinks that total loss means the car is not repairable, almost all cars are repairable it’s a choice on whether or not it’s cost effective. When writing an estimate it is standard that the insurance company takes the ACV (Actual cash value) and deduct what’s called salvage value from it. Salvage value is what the company would sell the car for in its wrecked state to salvage yard ect for parts. To get the ACV most companies use NADA to get the value. (Keep in mind NADA is your car in PERFECT condition, the insurance company can deduct value for dents and any previous damage). Now let’s say your car is worth 10,000.00 and there is a salvage value of 3,000.00 for your car the way it sits. The insurance company will write and estimate up to 7,000.00 before your car is deemed a total loss!
The is also title branding which will vary from state to state but is same model year and 7 year older. This is where the insurance company can only write and estimate to 70% (WI) of the ACV before it is branded a total loss. Anything older then 7 years is written to the ACV less salvage value.
I hope this can help a lot of you with insurance questions and there is WAY more I could get into other then this but it should help a lot of you. If you have more questions feel free to ask and ill help the best I can. If you have questions with something you are going through PM me and I will be happy to help the best I can I just don’t want “bla bla bla happened to me what can I do” all over this thread! I want specific questions in here that other people can learn from!
LIKE I SAID I CAN ONLY HELP SO MUCH AS INSURANCE WILL VARY STATE TO STATE! Remember you will always get farther with your insurance company by keeping a level head and just explaining where you’re coming from!
This is a LONG read but could save you in the long run, and you may learn something!
With all accidents I have been reading about and all of the confusion about auto insurance I thought I would take the time and clear up the haze that is auto insurance! Keep in mind the from state to state and company to company coverage’s vary and this should be used as a guide and not a be all and end all. You should ALWAYS read your policy and see what you are agreeing to, it’s a long read but could save your ass in the event that you do have an accident.
The Basics:
Coverage’s
A. Collision Coverage (Coll):
This covers any damage from a collision! A collision includes but is not limited to: contact with another car, hitting a stationary object (Garage, parked car, pole, ect), hitting a dead animal or something in the roadway. Like a said there is more but these are the basics.
B. Comprehensive (Comp):
This covers any “Act of God”. A Comp claim includes but is not limited to: Animal hit (live animal), Hail, Fire, Storm damage (Inc Flood), Vandalism, and Theft. Keep in mind this does not cover theft of items in a vehicle that are not a “part” of the vehicle (i.e. CD’s, GPS, MP3 players, and in some cases sub woofers/amps).
C. Bodily Injury /Property Damage (also known as Liability):
This covers any damage to another person’s vehicle or objects. Self explanatory. If you hit someone’s car, house, motorcycle, or anything this is the coverage that covers you from having to cover the cost to fix said object or pay their medical bills! Also where the money comes from if they sue you!
This has different limits listed for example: 100/300 and a flat 100. This means you have coverage for 100,000.00 per person injured, 300,000.00 max per accident. And 100,000.00 in property damage (i.e. Vehicles, homes, signs, guard rails, ect).
D. Medical Payments:
This is coverage so if your hospitalized you auto insurance will pay up to this amount before you health insurance will take over.
E. Underinsured Motorist:
This covers if the person that hits you does not have very good coverage’s and it will cost more then they have to fix your vehicle or pay your medical bills.
F. Uninsured Motorist:
Insurance in case someone hits you and they don’t have insurance. (For medical bill, loss of wage, ect)
THERE ARE MORE STATE SPECIFIC COVERAGES BUT THESE ARE THE ONES I DEAL IN EVERYDAY AND KNOW ABOUT!
This was and explanation for the basic coverage’s. You will have to choose a deductable for Collision and Comprehensive. Liability has no deductable. You will have to choose you’re deductable for what you can afford. I have people all the time choose higher deductable just so they can afford a nicer car and then are screwed when they get in an accident!
CUTOM PARTS AND EQUIPMENT (CPE):
This is in all caps as this is what we here and Acurazine are all about! Most insurance companies off a policy rider or extra coverage for custom parts. Most insurance companies have a 1,000.00 standard for custom parts on their collision coverage. (look into yourself not all have this). This covers but is not limited to: ANY NON OEM BOLT ON PART ADDED TO THE VEHICLE. These items MUST be “part” of the vehicle to have coverage (that means it must be secured to the vehicle (by bolts ect)). Here is the kicker about this coverage. Let’s say you total your car and you have 2,000.00 in CPE coverage and it has and exhaust system, tint, tail lights, and NOS.
There are two forms of CPE:
Type R (Replacement): This is any part that was taken off the car and replaced with the aftermarket part. (Lighting, Exhaust, Hoods, ect)
Type A (Additional): This covers items added to the vehicle. (Tint, Turbo, NOS, Supercharger, ect)
Now using the example above lets say these are prices: Exhaust 1200.00, Tint 250.00, Tail Lights 200.00, and NOS 500.00. This is how it works. For the Type R parts (Exhaust and tail lights) the company will compare the part price to the OEM and if you paid more then it cost to replace it OEM (or Aftermarket) then you get the difference. So let’s say your OEM exhaust is 1100.00 and the taillights are 400.00. You would get the 100.00 more you paid for your exhaust and you would get nothing for the taillights. Now for the Type A you would get the whole 750.00 as this was added to the vehicle. You would get 850.00 extra on top of what the car is worth!
To be safe keep ALL your invoices for custom parts you buy so you can prove what is in and on your vehicle in case of theft or any other loss. Pay more and take out the proper coverage for your parts or you have no room to bitch!
AFTERMARKET CRASH PARTS:
This covers those aftermarket parts what everyone dreds. I am not talking the parts you added to your car these are replacement parts made by any other source then OEM. This is were reading your policy comes in VERY handy. 100% of insurance companies require aftermarket parts to be used in repairs. Now the ONLY way to get around this is to buy an OEM Endorsement. This is extra coverage that you pay for that will make it that the insurance company has to use all OEM parts in the repair of your vehicle. Not all companies have this but its worth looking into! If you don’t have this, by you paying your insurance you are agreeing to use these “alternative” parts. END OF DISCUTION!
USED OR LKQ PARTS:
Personally I am not sure why people get so bent out of shape about these parts! These are from salvage yard. When your car is totaled or deemed a total loss the insurance companies sell your car off to salvage yards and that’s where these parts come from. When an insurance company uses these parts they are NOT allowed to use any part under the Grade A class and it must be off the same make and model or newer. These are OEM parts!!! I would prefer these over Aftermarket ANYDAY! By using only grade A it must not have rust dings or dents. Now if your body shop gets something different then it’s on them not the insurance company!!!
TOTAL LOSSES:
A total loss is not what everyone thinks it is. It means that the cost to repair the vehicle exceeded the cost to pay for what it is worth. Everyone thinks that total loss means the car is not repairable, almost all cars are repairable it’s a choice on whether or not it’s cost effective. When writing an estimate it is standard that the insurance company takes the ACV (Actual cash value) and deduct what’s called salvage value from it. Salvage value is what the company would sell the car for in its wrecked state to salvage yard ect for parts. To get the ACV most companies use NADA to get the value. (Keep in mind NADA is your car in PERFECT condition, the insurance company can deduct value for dents and any previous damage). Now let’s say your car is worth 10,000.00 and there is a salvage value of 3,000.00 for your car the way it sits. The insurance company will write and estimate up to 7,000.00 before your car is deemed a total loss!
The is also title branding which will vary from state to state but is same model year and 7 year older. This is where the insurance company can only write and estimate to 70% (WI) of the ACV before it is branded a total loss. Anything older then 7 years is written to the ACV less salvage value.
I hope this can help a lot of you with insurance questions and there is WAY more I could get into other then this but it should help a lot of you. If you have more questions feel free to ask and ill help the best I can. If you have questions with something you are going through PM me and I will be happy to help the best I can I just don’t want “bla bla bla happened to me what can I do” all over this thread! I want specific questions in here that other people can learn from!
LIKE I SAID I CAN ONLY HELP SO MUCH AS INSURANCE WILL VARY STATE TO STATE! Remember you will always get farther with your insurance company by keeping a level head and just explaining where you’re coming from!
Learned a couple things. What is the minimum coverage one has to have in order to drive...do they need just collision coverage or more?
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Thread Starter
Three Wheelin'
Joined: Jul 2010
Posts: 1,562
Likes: 85
From: Minneapolis, MN
Liability is what is needed in order to drive in any state. most of the time if you have a loan on your car your lien holder will require liab, comp, and coll.
I am glad you learned something! At least i helped someone!
I am glad you learned something! At least i helped someone!
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