Auto Accident Insurance: Are You Covered?

Auto Accident Insurance

Accidents happen every day. According to statistics, nearly 3700 people die globally daily due to auto accidents. Some occur naturally, while many others are caused by negligence.

While there’s no way to stop accidents, we can take steps to mitigate the risks. One way of doing so is by getting auto accident insurance.

Now, let’s talk about auto accident insurance. What is it? What does it cover? How can one get it?

What is auto accident insurance?

Auto accident insurance is an arrangement or agreement between an insurance company and a car owner for protection against financial losses following an accident. The two parties formulate and agree to specific terms to govern the insurance policy. The policy works when you get involved in an accident.

The car owner must pay a specified amount of money (premiums) at an agreed period. In most cases, you’ll be asked to pay premiums either monthly, bi-annually, or annually.

Some of the factors that determine the amount of premiums to pay for auto accident insurance include;

  • The type of vehicle you have
  • Your driving habits
  • Driving experience
  • Demographic factors
  • Driving history

Are You Covered in Auto Accident Insurance?

It depends on the type of coverage you take. Auto accident insurance consists of various coverages. They include;

1. Personal injury protection

Personal injury protection insurance covers the policyholder and the passengers, or those named in the insurance policy. It is part of auto accident insurance, but the premiums are charged separately.

If you’re involved in an accident, personal injury protection will cover the following;

  • Hospital bills
  • Medical bills
  • Lost wages
  • Other costs not included in your health insurance
  • Funeral expenses

Personal injury protection, also known as no-fault insurance, only covers personal injuries. It does not cover your vehicle or property damage. With personal injury protection, you’re covered even if you’re not in your vehicle, perhaps, if you are injured when riding a bike or just taking a walk.

Personal injury protection does not consider the faulty party. As long as you’ve sustained personal injuries and you have the policy, you’re covered.

2. Bodily injury liability Insurance

Bodily injury liability insurance covers third parties. For instance, if you’re driving and accidentally hit someone, or their vehicle, bodily injury liability insurance will help you cover the expenses. Even if the person sues you, all the legal charges will be settled by the insurance company.

Some states have minimum limits for bodily injury liability insurance. However, you can still go past the limits to get extra coverage by paying more.

Bodily injury liability insurance covers;

  • Hospital expenses for the other party
  • Lost wages/income
  • Legal fees, if you get sued

3. Property damage liability

If you cause an accident that damages someone else’s car or property, the losses and damages are covered under property damage liability insurance.

In most states, it is a requirement for vehicle owners to have this type of auto accident insurance.

If someone, perhaps your friend or family member, borrows your car and damages someone else’s property, property damage liability insurance will still cover the losses and repairs.

It’s worth noting that property damage liability insurance does not cover damages on your vehicle. Properties covered under this policy include;

  • Other person’s vehicle
  • House
  • Store
  • Office
  • Fence
  • Lamp posts
  • Trees

4. Collision insurance

Although this type of auto accident insurance is not mandatory, it is still beneficial to car owners. Collision insurance covers damages on your vehicle after an accident. For instance, if you’re hit or hit another car, collision insurance will cover the cost of repairs on your car.

Also, if you damage your vehicle, say by hitting an object like a tree or fence, collision damage will cover the cost of repairs or replacement of the car.

However, collision damage does not cover;

  • Damage to another vehicle
  • Medical expenses (yours and the other persons’)
  • Damages not related to driving like theft or burglary

If you’re leasing a vehicle, it’s essential to have collision coverage. If your car has already been paid off, you have the option of either retaining or dropping your collision insurance.

Some of the things to consider when getting collision insurance include;

  • The cost of the coverage
  • Affordability of repair or replacement services of the vehicle
  • The type of car you own

5. Comprehensive coverage

Comprehensive insurance covers your vehicle against non-collision-related factors. It helps settle the cost of repairs or replacements resulting from things like;

  • Theft
  • Fire
  • Hail
  • Hitting an animal
  • Vandalism
  • Damage caused by civil disturbance like riots
  • Damage caused by falling objects like trees

Collision damage is sometimes called ‘other than collision’ or ‘own damage’ insurance. It is the best protection you can give your car.

Collision coverage does not cover depreciation, electrical or mechanical damage, legal fees, medical expenses, wear and tear of the vehicle, among other things.

6. Underinsured or uninsured motorist coverage

If you get into an accident with a driver who has insufficient or no insurance to cover the damages, uninsured/underinsured motorist coverage will settle the costs.

Also, if someone hits you and runs away, this insurance will cover the costs of damages caused.

What is not covered under auto accident insurance?

Some things are not covered by auto accident insurance. These include;

1. Natural calamities

Auto accident insurance does not cover damages to you or your vehicle due to natural calamities like tornados, earthquakes, floods, and many more.

Many insurance companies include an “Act of God” clause in auto accident insurance describing natural disasters. Natural calamities are permanent exclusions in auto accident insurance.

It is highly advisable to go through the terms and conditions of the insurance policy before agreeing with an insurance company.

2. Personal belongings

Most insurance policies cover the vehicle and the persons in it and not the personal belongings in the car. For instance, if your car is stolen or vandalized, and your personal belongings such as laptops, phones and car seats get lost, you won’t be compensated.

What to do after an accident

Insurance companies have strict rules and guidelines governing the policies. Such rules must be followed for you to receive compensation.

Here is what you need to do after an accident to make sure the insurance company accepts your claim.

1. Stop and protect the scene

Whether it’s a major or minor accident, do not move away from the place of the incident. Arrange for the scene to be protected. Unless your vehicle interferes with the traffic, do not move it away from the scene. Be careful not to cause further accidents in the process.

Call the police to help keep people away from the scene. The police will help you identify the person at fault.

Also, you’ll need a police report to file an insurance claim. Get a copy from them before they leave or ask them where/when you can get one.

2. Get help

After an accident, you may suffer major or minor injuries. These may be internal or external. Internal injuries are hard to detect and may show up a day or two after an accident. Do not gamble with your life.

Whether it’s a minor or major accident, you must seek medical help. If you or the other passengers are badly injured in the accident, you’ll need an ambulance to take you to a hospital.

If you feel that you’re not hurt, you still need to see a doctor for an examination to be sure that you’re safe from injuries.

3. Alert your insurance company

Your auto accident insurance provider should be among the first people to be informed of the accident. The insurance company will send insurance adjusters to identify the extent of the accident and the amount of money the insurance company will pay for the damages.

Also, you can call your personal injury lawyer for assistance. It’s possible to get confused after an accident. Again, if you’re seriously injured in the accident, you won’t be able to file an insurance claim.

Additionally, get some details about the accident, including the place of the accident, the date, plate numbers of the fault parties, among other things. If possible, take pictures as evidence. Take the names and addresses of the witnesses, if there are any. They’ll help you when making your auto accident insurance claim. You’ll need the witnesses if the matter is taken to court.

4. Request for roadside assistance

Once everything has been captured by you, the police, and your insurance company, and the emergency services have evacuated the injured, you’ll need to move your vehicle from the accident scene.

But if the accident was severe and your vehicle is badly damaged, you’ll require roadside assistance to tow the vehicle.

If your vehicle needs to be towed, who is going to pay for the towing fees? Ordinarily, you’ll need to pay for the towing fees out of your own pocket. However, there are some cases where your insurance company will pay for the towing fees. But for this to happen, you need to follow specific guidelines.

For instance, you’ll have to use a specific towing company recommended by your insurance company. Also, you may be required to tow the vehicle to a specific location. If you don’t follow the guidelines, your insurance provider may decline to pay the towing charges.

If the money is coming out of your pocket, agree on the cost before the vehicle leaves the accident scene.

Bottom Line

Auto accident insurance helps car owners mitigate risks and settle financial losses resulting from car accidents. There are various types of auto accident insurance which include collision coverage, comprehensive coverage, bodily injury liability insurance, and many more. The coverage depends on the kind of car insurance you have and the premiums you pay.

When involved in an accident, do not move away from the scene. Call the police and the emergency services and alert your insurance provider. Your personal accident lawyer might also come in handy.


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