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  • What to expect from your insurance company after a car accident

    When we were rear-ended a couple of weeks ago, I really didn’t know what to expect in terms of our insurance claim because it had been over ten years since I’d been in an accident. Obviously, I’ve been paying for car insurance during all of those years, and I expected our insurance to cover most of the repair costs. But I was clueless when it came to details. Here’s what I’ve learned so far:

    You have the choice of proceeding through your own insurance company or working directly with the other party’s insurance company. Our insurance agent said that if the other company makes it easy, then it’s better to work directly with them – you’ll get the money sooner, and you won’t have to pay your deductible, then wait to get reimbursed.

    If you go through your own insurance company, you’ll have to pay your deductible. But you might get it back. It sounds like you get reimbursed for your deductible after your insurance company has received money from the other party’s insurance company – and apparently that takes months. In our case, we’re still not sure if the other party was actually covered at the time of the accident, and we’ve been told that we might get our deductible back if he turns out to be an uninsured motorist (apparently that’s a term of our policy).

    You’ll probably get the repairs done fastest if you go through your own insurance company. This is what we’re doing, because we didn’t want any delays in getting the car repaired. It would have taken at least one additional week, and probably more, if we’d tried to work things out with the other insurance company.

    In California, you have the right to choose the repair shop. In other words, your insurance company can’t make you use a certain shop, although you may have to pay the difference. In our case, we chose a body shop that’s not preapproved by our insurance company, but the body shop accepted the insurance company’s estimate without quibbling so we are only on the hook for our deductible. We’ve received notice from our insurance company that this is California law, but if you live in another state, you’ll have to check your own state law to see if that’s the case where you live as well.

    Your insurance company will handle all communication with other parties and their representatives. One of the nicest moments in this experience was being able to tell the insurance company for the driver of the car that we were pushed into to call our insurance company instead of talking to us directly.

    Your insurance company will reimburse you if you have to replace any car seats. I’m still deciding which seat to get, though.

    It’s good to have good insurance. This accident has served as an excellent illustration of why insurance is so important. As it turns out, the total cost of the repairs will be a few thousand dollars, an amount that we could have paid out of pocket if necessary. But what if the accident had resulted in greater damage or even injury? You never know when an accident is going to happen, and I know that we were lucky that no one was hurt. And that’s why we pay good money for insurance.

    All in all, this has been a relatively painless experience thus far. Hopefully, we’ll get the car back within two weeks, our deductible will be reimbursed without too much delay, and we can put this whole incident behind us.

    More on Social Security Disability

    When I was filling in for JLP at All Financial Matters last week, I discussed Social Security Disability benefits and they actually sounded pretty good. But it looks like they might be rather difficult to get. Beachgirl just shared that her dad, who hasn’t been able to work for some time now, was just denied disability benefits. And from what I can gather, he’s not able to work at all.

    It would be one thing if the Social Security Administration’s letter said that since he still has cognitive abilities, he could find a different job. But if I’m reading the portion she posted correctly, they’re saying that they think he could still do his job as a maintenance worker. Huh?

    Fortunately, her parents have consulted an attorney, who believes they have an excellent chance of winning an appeal. I hope he’s right!

    Are college students covered by their parents’ insurance policies?

    If you’ve got a child headed off to college in the fall, it’s not too early to start looking into their insurance coverage while they’re away. I found a handy little column in the June issue of Westways, so I’ll share what they say:

    • Health insurance – Most health insurance policies cover dependents up to 25 years of age if they’re in school full-time. You’ll want to check your own plan for its specifics, though, and talk with your child about what “full-time” means. (One dropped class could mean no health insurance – yikes!) You should also take a look at what out-of-network costs might be if your child’s school is far away. If your policy doesn’t cover your child, or you’re worried about those out-of-network costs, you can purchase a temporary policy – I seem to recall my schools always offered one, though I never bought it (they always seemed a little shady to me – maybe they were actually catastrophic policies? – so make sure you read the fine print).
    • Property insurance – If you can still claim your child as a dependent, she will most likely be deemed part of your household and her possessions will be covered under your homeowner’s policy while she’s away at school. But the coverage might be limited, so check your policy and decide whether renter’s insurance might be a better bet. In this situation, I would probably call up my insurance agent for guidance.

    One final note: If you’re bearing any kind of responsibility for your child’s college education, you may want to make sure your life insurance coverage is adequate. It’s occurred to me that our very first term policies will expire just as our oldest heads off to college, and the polices that we acquired shortly after his birth will expire while he’s still in school. I expect our finances to be such that we won’t need additional policies at that point, but if we aren’t as financially secure as I hope we’ll be, I’ll consider five-year term policies so that money won’t be a source of stress in the event of the unthinkable.

    Car insurance that works the way it’s supposed to

    Remember that tiny dent that I mentioned our oldest boy put into the car parked next to us a few weeks ago because I wasn’t watching closely enough? Well, the other car’s owner went ahead and called his insurance company, and our insurance agent called us.

    And although I wasn’t looking forward to the call, it wasn’t so bad.

    First of all, I want to say that I love our insurance agent. He’s nice, professional and competent, and he’s also straightforward and helpful.

    With that in mind, he gave me the option of deciding whether to claim the incident on our insurance or handle it ourselves. And he helped me make the decision by giving me all of the information I needed.

    The damage to the other car is $300. Our deductible applies only to damage to our own vehicle, so the insurance company will cover the entire cost. Because the claim is a low amount, it won’t impact our premiums.

    The only thing to be concerned about is the possibility of losing our good driver discount if there’s another incident in the next three years. (The discount is $80 per year.) Hopefully, that won’t be something we have to think about again, though!

    One thing I wish I could find out is what the other car’s owner thought about before he filed his claim with his insurance company. He did absolutely nothing wrong (both our cars were parked within the lines) so it seems like the claim shouldn’t impact his policy at all. And since we’ll pay for the damage, his insurance company isn’t out any money either. But I’ve read that multiple small claims can result in higher premiums – although this could apply only to home insurance policies, since there will rarely be a responsible third-party to absorb the cost of those claims. Hm, does anybody know?

    All in all, I’m really pleased that our car insurance policy seems to be doing exactly what it’s supposed to do, even in a very minor incident!

    10 Tips for Minimizing Life Insurance Costs

    After my friend’s husband died last week, I wrote about figuring out how much life insurance you need and what kind of policy you should get. Since I’ve hopefully spurred at least some of you to get new policies if you need them, I figured I’d better share some tips for saving money on your premiums:

    1. Buy term. – It’s much more affordable than whole life. (But find out why you may want or need a whole life policy.)
    2. Shop around. – While you want to make sure you get coverage with a reputable company that’s going to be around for the full duration of your policy, you also want to get the best deal. Different insurers charge different premiums. One possible easy way of comparing prices might be to work with an independent insurance agent. Some “independent” agents work almost exclusively with only one or two companies, so be sure to ask for quotes from several insurers.
    3. Check with your employer and/or union. Your employer or union may automatically provide you with a policy, or at least offer a reasonably priced policy that you can purchase. While you don’t want to assume that it’s the best policy for you, it’s definitely worth looking into. If this policy is relatively inexpensive up to a certain amount, you could always use it in combination with other life insurance policies.
    4. Pay your premium annually. – The more payments you make each year, the more convenience fees the insurer probably charges. The best thing about this tip is that it’s one you can take advantage of even after you’ve purchased your policy.
    5. Be in (or get in) good health. – This is rather obvious, but healthy people pay lower premiums. While you can’t do anything about your family’s medical history, you can make sure that you are a healthy weight, and keep your cholesterol and blood pressure at a healthy level.
    6. If you smoke, quit. – Enough said.
    7. Don’t engage in overly risky activities. – For instance, if you skydive, fly private planes, or have a dangerous job, your premiums will be higher.
    8. Consider giving plenty of details to the insurer’s representative who questions you. – “Have you seen a therapist?” is apparently as standard question, and I have had to disclose that I have. But I explained that it was to help me work through the grief of two miscarriages. I also explained that my dramatic weight gain and loss was due to pregnancy. I don’t know if these explanations made a difference, but they certainly didn’t hurt – I was classified in the lowest risk category.
    9. Find out if rates are lower for multiples of $250,000 of coverage. – For example, $500,000 of coverage might cost the same or less than $450,000 of coverage.
    10. Don’t buy more than you need. – Unless it costs less, of course, as in Tip #9. While I emphasized that it’s important to have enough, you’ll just be throwing money away if you buy too much insurance.
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