Automobile Insurance and Car accidents

By Mary Thompson, Capstone Brokerage President February 19, 2015

A “safe driver” is every insurance companies dream client. They, much like the good driver, are easy to insure. The safe driver doesn’t typically get in car accidents, harm other drivers on the road, or receive moving violations. These factors make a “safe driver” the best candidate to offer insurance to in the insurance companies mind. Accidents do happen and sometimes a safe driver is at fault. Having an accident on a drivers record isn’t the end of the world but it will more then likely raise the driver’s premium.

Let’s say you are running late to work and accidentally run a red light, hitting another car. You cause extensive damage to the other vehicle and the other party is also injured. You are labeled the “at-fault driver”. Let’s explore how both drivers will be covered by the at fault drivers insurance.

Bodily injuries that are a result of the accident are covered under a policy’s liability coverage. It is required by law to carry liability coverage on an automobile policy. Each state sets its own minimum limits. Here in Nevada it is required to have coverage with the following minimum limits:

– $15,000 Bodily Injury per person
– $30,000 Bodily injury per occurrence
– $10,000 Property damage coverage

Most insurance companies recommend that an individual carry more then the required state limits. For a more in-depth look into why visit, (Link: http://expertim.wpengine.com/why-should-i-carry-more-auto-insurance-then-legally-required/). So depending on the state in which the accident happens, the liability coverage can vary.
Now what about the damage to the vehicles?

The first thing to understand is how your insurance company will cover you if you are found to be at-fault. Depending on the type of coverage in place several scenarios are possible. The damage to the “at fault” driver’s vehicle is covered if the policy includes collision coverage. If this is the case the driver will be responsible for the deductible then the insurance policy will pay anything over that amount to repair the vehicle up to its value. If the at fault driver does not carry collision coverage on their policy then the driver is responsible for repairing the vehicle out of pocket.

Next it is important to look at, how the “at-fault” driver’s insurance will cover the other person’s vehicle. This is when the property damage coverage comes into play. The other driver is not required to pay a deductible. Keep in mind that the insurance company will only pay out to the maximum limit that the driver has on their policy. It is not uncommon for this not to be enough. Any remaining damages would then be covered under the other drivers’ personal auto policy and they may be required to pay their deductible.

What happens to premium when a driver is in an at fault accident?
When a driver with a history of having a safe driving record is in an at fault accident they should be prepared to pay for an increase in premium. Not always, but most times insurance companies will increase premium to ANY driver who has an “at-fault” accident on their driving record.

Having an educated agent is always helpful when working through an accident claim. The knowledge an agent can provide will make the process easier to understand and help the driver know what to expect. Follow our Capstone Insights Blog (link) for more information on this topic in the coming weeks.