Insurance 101

[RvRWill]

I work at State Farm. My dad is an agent and i am in agency training to become an agent in the next few years. After reading a few threads about accidents i thought i would make a small thread to help people with their insurance. No, this is not a sales pitch. And i know most of you know your policies but here are some basics just so everyone can be sure they are covered.

The most typical words you will ever hear an insurance company tell you is that you have what is called "Full Coverage". When you get a quote with a small admitted company like Freeway insurance they most likely will quote you with having "Full Coverage". Do not be fooled. Full coverage means nothing more than you have liability with comp and collision. Having those basic coverages is "Full Coverage". But your liability limits are what you need to focus on. The minimum requirement in california is 15/30/25. This is what your limits mean.

BI BI PD
15/30/25 =
"BI" 15- Bodily Injury Per Person. Not To Exceed $30,000 As Stated Below.
"BI" 30- The Maximum Amount For Bodily Injury Per Accident.
"PD" 25- The Total Amount Per Accident For Property Damage.

(BI - Bodily Injury. PD - Property Damage)

These numbers differ but they still apply to the same thing. Remember liability never pays directly to you. It protects you by paying out to a third party.

Comprehensive or "Comp" & "OTC" (Other Than Collision) coverage covers everything other than collision. This includes Fire, Theft, Vandilisn and glass breakage. The most common deductable is $500.

Collision coverage coveres your vehicle if its struck by another vehicle or the other way around. Striking a poll is also collision and rolling your vehicle is covered under collision (With most companies). Most common deductable is also $500.

Watch your deductables. Your deductable is the amount you must pay out first before the insurance company steps in. If you hit a poll and do $600 hundred dollars in damage with a $500 deductable you will pay the first $500 and the companie would pay the remaining $100. Having a high deductable will reduce your premium but make sure you select a deductable that you can manage.

Uninsured Motor Vehicle coverage. Usually the same limit as your liability limits. This is a must. Having Uninsured Motorist coverage protects you from people that have no insurance. And a recent poll our office recieved shows that over 10,000 people in california are on the road WITHOUT insurance. You may also get Uninsured Motorist Property Damage coverage.

In closing i know that most of you have familys and children. New drivers on a policy can be pricy. So if you have a new driver in the household make sure you add them as a driver.

We drive BIG TRUCKS. That means that we liable to do more damage then a small economy car. I myself have 100 /300 /25 on my truck with Uninsured at 100 /300. You want to make sure your vehicles are properly covered. They are very expensive and you want to protect yourself. Its not something we think about often but being under insured can be devastating.

You all have familys and assets you need to protect because you can be sued and taken to court and believe me i have seen it happen. Take the time to talk your agent or company. Make sure you understand your policy and what it coveres. If you have alot of assets and children who drive you might even want to get an Umbrella Policy. This is a policy that offers broader and higher coverage for your Home and Auto policies. Dont be afraid to ask your carrier about getting an Umbrella.

[dezzrats]

Take a look at what you could be sued for if by any reason an accident is you and your big trucks fault. I am a single home owner and have uped my liability to several times over what is the California min. Big horsepower, big tires, $50,000 worth of truck means you will be sued

State Farm 20+ years "you get what you pay for"

[RvRWill]

Take a look at what you could be sued for if by any reason an accident is you and your big trucks fault. I am a single home owner and have uped my liability to several times over what is the California min. Big horsepower, big tires, $50,000 worth of truck means you will be sued

State Farm 20+ years "you get what you pay for"

You get a gold star! hehe. Always good to see happy clients. And i say clients because to most companies you are a "Policy Holder" but to a state farm agent you are a Client.
Thanks dezzrats for your support :yay:

[hotstik]

Thanks! That's some good info. I've had State Farm for 13yrs now.

Just out of curiosity,how are things like suspension modifications (lifts etc.) and aftermarket parts (engine mods, stereo upgrades, etc.) typically dealt with after an accident?

Are these items scrutinized as being a factor in the accident?

Are such items covered under the typical policy if they are damaged or destroyed?

I keep getting conflicting information on these questions...

Thanks!

[RvRWill]

Thanks! That's some good info. I've had State Farm for 13yrs now.

Just out of curiosity,how are things like suspension modifications (lifts etc.) and aftermarket parts (engine mods, stereo upgrades, etc.) typically dealt with after an accident?

Are these items scrutinized as being a factor in the accident?

Are such items covered under the typical policy if they are damaged or destroyed?

I keep getting conflicting information on these questions...

Thanks!

With State Farm if the vehicle is road worthy by law then any claim is based on cash value. Anything you do to the vehicle has to be documented. In other words any lift kits or anything you have put on, save the paper work and invoices. Our claims department will need those documents in the event of a loss. Same thing as stereo equipment. All stereo equipment has to be permanently attatched to the vehicle. Same thing with engine mods. Has to be legally road worthy.

[K5Cruiser]

RvRWill - Thanks for posting up this information. It's not the most interesting topic for most car / truck / diesel guys, but it's definitely a good one to be knowledgeable in.

[fords4life]

My parents and grandparents have been with State Farm ever since I've known what insurance is and I will do the same if things go as they have in the past, which I think they will. They might not be the cheapest, but whoever said cheapest is best? My mom has had 2 major collisions (1 others fault, and 1 her fault), and I had a rollover less than 6 months after I got my license, luckily for me someone saw the other party that caused me to lose control and stopped to tell the cops about it. In all 3 cases things happened quickly and we were well taken care of. In my case the corporate office tried to up my rates, but my agent fought for me since it wasn't my fault even though it was single car, they came to a compromise, and my rates didn't go up.

One thing that I think parents need to know is that they need to get kids on insurance as soon as possible. Some people think that insurance rates drop at 25, which is incorrect, it's after 9 years of experience, waiting till the kids are older doesn't help any. Parents also need to really encourage their kids to get good grades, the good student discount is a good one, and after I graduated college while maintaining the good student discount since the day I started driving, I got to keep my good student discount for life with a copy of my diploma! Trust me that's a lot of savings over a lifetime. The other tihng about statefarm is that I received all of my parents discounts because I was on the same account. They also gave me a huge break at 7 years(20%) because I had kept my record clean and been in good standing.

[junior323]

Thanks for the Info RvRWill

-Junior

[Thumperer]

With State Farm if the vehicle is road worthy by law then any claim is based on cash value. Anything you do to the vehicle has to be documented. In other words any lift kits or anything you have put on, save the paper work and invoices. Our claims department will need those documents in the event of a loss. Same thing as stereo equipment. All stereo equipment has to be permanently attatched to the vehicle. Same thing with engine mods. Has to be legally road worthy.

Hey RvRWill, I've got a general question about insurance companies. What is the policy on the pay out for a loss like theft? Do they try to give you low blue book or what? If they do can you try to negotiate a better settlement?

[RvRWill]

Hey RvRWill, I've got a general question about insurance companies. What is the policy on the pay out for a loss like theft? Do they try to give you low blue book or what? If they do can you try to negotiate a better settlement?

Thats a good question. In the old days it was exact replacement cost. Now what happeneds is when you total a vehicle or its stolen its replacement cost - depreciation = Payout. Each company has their own total loss rules and guide lines so i cannot really speak for all carriers out there. With State Farm its pretty fair. You are able to discuss the settlement but rarely ever do the companies give in for a higher sum. Our good buddy totalled his F-150 and he ended up getting over a grand more than what he spent it on. Funny thing is he bought that truck from sunrise ford haha.

Thumperer, you really have to look at the company. This is where that shopping for price and shopping for value comes in. Take the time to understand your policy by talking to your agent or carrier. Usually the smaller companies that offer the super low rates take care of you but i have been told that they give you that low rate but when it comes time to pay a claim... well good luck.

To answer your question in a nutshell, some might and some might not. State Farm actually give's its policy holders a list of similar cars for sale and their re-sale price for you to compare. If the product they are selling is as good as they say it is then they should be more then happy to service you. Remember insurance is all about claims. Many companies will suck you in with the "Lowest" rate around but its in the time of a claim when they really show what kind of company they are.

Talk to your agent/carrier and see what they say when you ask them how much in the event of a claim would you be standing to get in the event of a total loss or theft. :D

[sbchero]

great thread. i my self being in the ins industry have answered many of the above questions for others.

and fwiw the CA min is 15/30/5. and 5k dont get that far these days.

[RvRWill]

great thread. i my self being in the ins industry have answered many of the above questions for others.

and fwiw the CA min is 15/30/5. and 5k dont get that far these days.

Boy that could not be anymore true. One of the most repeated statements in any carriers office from a client is "I dont need that much coverage i hardly drive or its a cheap car"

Remember liability protects you by paying to a third party. You want to have AT THE LEAST $50,000 coverage for property damage. Most new cars on the road are about 20 - 50 grand to replace if destroyed.

and BTW sbchero i was trying to keep 15/30/5 out of everyones minds lol. But thats true that is the lowest.

[sbchero]

Boy that could not be anymore true. One of the most repeated statements in any carriers office from a client is "I dont need that much coverage i hardly drive or its a cheap car"

Remember liability protects you by paying to a third party. You want to have AT THE LEAST $50,000 coverage for property damage. Most new cars on the road are about 20 - 50 grand to replace if destroyed.

and BTW sbchero i was trying to keep 15/30/5 out of everyones minds lol. But thats true that is the lowest.

oops :blush: sorry about that.
ya the minimum limit is 50/100/50. ;)
i hear ya on limits. i roll w/ 300/500/100 but thats b/c i know first hand what it can cost for a bad accident. i dont even own a house or have that many assets, but for the cost that it is it saves me from a hassle if something bad happens (god forbid it be my fault) is worth the difference.

[RvRWill]

oops :blush: sorry about that.
ya the minimum limit is 50/100/50. ;)
i hear ya on limits. i roll w/ 300/500/100 but thats b/c i know first hand what it can cost for a bad accident. i dont even own a house or have that many assets, but for the cost that it is it saves me from a hassle if something bad happens (god forbid it be my fault) is worth the difference.

Yea when i was taking the classes back in the day and they said that if you were under insured, they could legally deduct hundreds of dollars from your paycheck for years. I have then increased my set coverage lol.

[Samuel1941]

I guess some people think that insurance is insurance...but, they fail to realize the dollar amount there are getting!!!

Personally I have 500,000/1,000,000/500,000 and a $1 million umbrella policy over everything!! It really doesn't cost that much more for a lot of peace of mind!!

Insurance is one of those funny things that you pay for, but hope you never have to get your money's worth!