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Understanding Insurance – Part I

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Many people who have been in a car accident will tell you that car insurance companies are difficult, at best. In a typical accident, you will have to deal with the other driver’s insurance company and his passenger’s carrier. Should that convoluted situation ever arise, here are some things you need to understand about insurance, how it works, what it covers, and what you can do to improve your claim’s chances.

Getting the Right Coverage

How well you’ll be treated in an auto accident is almost always a function of what your insurance covers. In theory, insurance is peerless in terms of the assistance it can bring you should you find yourself in an accident. These companies have the mammoth resources and finances to cover all the losses and damages that an ordinary person might not afford on the dot.

More than many things, insurance brings a profound sense of security. You can afford to travel with the knowledge that should you inadvertently cause some form of harm or injury, someone else with deeper pockets has your back.

Still, on balance, insurance is pure business, and at the end of the day, it’s still about the bottom line. Hence, as a general rule, these firms will hesitate to pay upfront for a claim and will go to great lengths to avoid paying, if they can.

One of the best ways to counteract this is to stay on top of the nitty-gritty of your policy, how it works and what ought to be covered. Therefore, if you are shopping for an insurance package, you should not only look at the rates but get recommendations from a reliable source on what these companies are like.

Understanding Insurance

On paper, your insurance company, up to a point, assumes all liabilities and obligations arising from your acts or your properties. In return, you undertake to pay a fixed amount, monthly or per annum, for a specific policy. Here are some of them and what they cover:

PIP or Medical Payments ­– PIP simply means Personal Injury Protection. This policy will help you with medical expenses incurred for injuries arising from an auto accident. Generally, this policy will answer for medical costs regardless of the presence of or degree of negligence on your part. If you already have a medical insurance policy, you may want to opt out of this to avoid redundancy, especially when you’re already paying a hefty sum.

Damage to Property – This type of coverage will pay for the damages your car or bike might cause to another person’s property. Generally, it will pay for the cost of repairing the other party’s car or its full value in case it’s totaled. However, in exceptional cases, this policy will also cover houses, fences, stores, boats, trailers, or other personal property. Some carriers apply this policy as well to attorney’s fees in case the other driver sues you.

BI or Bodily Injury ­– Not unlike property damage policies, this coverage will pay for whatever medical cost and other similar expenses that may arise should you accidentally injure the other driver, his passengers, or pedestrians.

Collision Coverage – This is not to be confused with policies applicable to property damages. This type of coverage will pay for or at least reimburse you for the expenses you might incur for repairing your own vehicle.

Comprehensive Coverage – Strictly speaking, comprehensive coverage is not an umbrella policy, though it operates in much the same way. If you live in a town or city where fires, flooding or earthquakes are common, then this policy is a must. As a general rule, it will pay for any damages that you might suffer other than from a car accident. These damages range from vandalism, hurricanes or or in some cases, accidentally hitting a passing cow or deer.

If you or someone you know is involved in a car or truck accident case contact the St. Louis Personal Injury lawyers at the Law Office of James M. Hoffmann. If you wait to contact an attorney you may end up being barred by the statue of limitations. Contact us today at (314) 361-4300.

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Updated: December 22, 2022