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NEWS you can use

The Anatomy of an Auto Insurance Policy

7/11/2019

18 Comments

 
Not all auto insurance policies are the same. Types of coverage vary. So does the amount of coverage.

Ask yourself — Do I have the right coverage? That’s why it’s important to understand what is available and how much of it you need in order to get you back to where you were before your auto accident.
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Here’s a breakdown of the five parts of an auto policy
Coverage for the other party:
1. Liability — provides coverage for the other party if you are responsible for the accident.

Coverage for you:
2. Other Than Collision (OTC) or Comprehensive — provides payment for the loss or damage to the policyholder’s vehicle caused by something other than collision such as:

  • Fire
  • Damage caused by severe weather events such as hailstorms, hurricanes, lightening, tornadoes, etc.
  • Animal collision
  • Flood
  • Vandalism or riots
  • Stolen vehicles
 
Although optional, Comprehensive Coverage is most likely mandatory by your lender if your vehicle is leased or still financed.

3. Collision — provides coverage for your insured vehicle if it is physically damaged due to colliding with another vehicle or object, or if the vehicle is overturned.

4. Uninsured/Underinsured Motorist — reimburses the policyholder, covered family member or your passengers for bodily injury if they are the victim of an accident caused by a hit-and-run. It also covers the same if a driver who doesn’t have any insurance (uninsured motorist) or a driver who doesn’t have high enough limits to cover the damages or injuries (under insured motorist).

5. Medical Payments — Covers costs for the treatment of injuries to the driver, passengers or struck pedestrians/bicyclists of the policyholder’s vehicle no matter who is at fault, up to the limit of coverage. It also covers ambulance transportation, which is NOT covered under an auto policy.

The takeaway
Choose coverage(s) based on your circumstances, the vehicle use and its age. Then, choose your deductible, which is the amount you pay before the policy reimburses you for your claim.
Ask a Connecticut Insurance Exchange licensed agent to help you choose the best options for your situation. They're here to help and it won't cost you a penny more for their expertise!

Auto Policy Tips
  • The higher the deductible, the lower the premium
  • Review your auto policy coverage when circumstances change such as buying a new car, adding a new driver, or buying a new home
You should also consider adding a personal umbrella policy to cover your assets when your auto policy coverage reaches its limits.

An umbrella policy works like this:
Let’s say you're at fault in a car accident that injures another driver. The other driver’s injuries are severe and cost $450,000. Your automobile insurance will cover the other driver up to the limit of your policy (let’s say that amount is $300,000), minus your deductible. Without an umbrella policy, you would be liable to pay the $150,000 difference out of your own pocket, but the umbrella policy would cover you for the difference up to the limits of its policy (usually $1,000,000).

Related Links:
Medical coverage: PIP vs MedPay
Know your limits!
Why it's VITAL to understand this often misunderstood coverage

18 Comments

Is a credit score the same as an insurance score?

7/9/2019

1 Comment

 
No. A financial credit score factors in your payment history, the amount of credit you owe, the length of your credit history, the types of credit you have and the amount of credit for which you apply. On the other hand, an insurance score is a three-digit number used to estimate the likelihood of you filing a claim. Your insurance score is a combination of your credit score and your insurance claims history.

Insurance companies began incorporating financial credit scores a few years ago, because studies have shown people with a lower credit score have a greater chance of having more claims than those with a higher credit score.
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Just like credit scores from companies Experian, TransUnion and Equfiax may be similar but not the same,  insurance scores differ as well because no two insurance companies use the exact same method to calculate your score. Some may also include information of other policyholders with similar traits to yours. Because Connecticut Insurance Exchange represents over 20 A+ rated insurance companies, we are able to match you with the best company in light of your credit score. So, having a low score is not necessarily a deal killer — having a good driving record and minimizing homeowner risks matter.

Want to improve your insurance score? Check out these tips:

For your auto
  • Drive safely and avoid moving violations
  • If possible, keep your car garaged or covered to avoid weather-related damage
  • Tire traction matters — replace worn out tires, especially in the winter
For your home
  • Discourage burglars by leaving a light on when not home; Better yet, install a security system
  • Install smoke detectors and keep a fire extinguisher handy, especially in the kitchen
  • Before a big storm, put away toys and tools, and secure patio furniture
  • Keep your walkways, driveway and steps free of ice and anything that can cause slips and falls
 For your credit score
  • Pay your bills in time
  • Reduce the balances on the credit you owe
A borrower who has a good mix of secured credit (such as a home or car) and unsecured credit (credit cards) scores better than someone who has only credit cards

Related links:
Moving violations can cost more than you realize
Distracted driving
Homeowner summer safety

1 Comment
    News you can use from Connecticut Insurance Exchange covering topics ranging from your home, auto, business, liability and more.

    Author

    Melanie Thomson-Tregoning is a Licensed Insurance Agent and VP of Marketing for Connecticut Insurance Exchange, Ltd.

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  • Home
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