Crash Course: Car Insurance
Insurance can be confusing to navigate between sorting through different kinds of auto coverage, policy names, and other mumbo jumbo. However, it’s vital to have the right car insurance in case you get into a car accident. It gets even trickier when your insurer wrongfully denies your claim.
Don’t sweat it – to help you out, we’ve put together a crash-course (no pun intended) of the most important terms to know when it comes to car insurance.
“Full Coverage”
Despite its name, full coverage car insurance does not always cover all damages. Full coverage is generally a policy that contains more than one type of coverage. There is no such thing as an all inclusive type car insurance that covers 100% of all kinds of damages which covers every possibility. You protect yourself by adding on the other coverages we are discussing.
Collision Coverage
Collision coverage pays for damages to your vehicle, regardless of who is at fault for the accident. If you have a fairly new or expensive vehicle, collision coverage may be a good call to make. Collision coverage is optional in Missouri, however, most car loan lenders will require you to have it before providing the loan.
Comprehensive Coverage
This type of car insurance coverage pays for damages to your vehicle that have been caused by anything but a car accident. For example, things like storm damage, hitting a deer, or vandalism would all be covered, but getting in a traffic accident most likely would not. Comprehensive coverage can be used as a safety net for car owners who are still financing the vehicle.
Liability Insurance
In the event of an accident, liability insurance covers the other driver’s damages and personal injuries when you are completely or even partially at fault. This type of coverage can save your neck if you cause an accident. In Missouri, it’s actually illegal not to have liability insurance. Missouri law mandates that drivers have a minimum of $25,000 per person for bodily injury and property damage coverage. Not only is it against the law to drive without liability coverage, doing so reduces the damages you can recover from the other driver if you are not at fault.
Gap Insurance
If you’re paying off a loan for your vehicle, you’re going to want to consider gap insurance. If you get into an accidentthat totals your car and the car is not worth as much as your loan balance, gap insurance covers the difference.Since your car is worth less than you paid the moment you drive it off the lot, a wreck can leave you paying the difference between your car’s value and the loan if you don’t have gap insurance.
Uninsured Motorist
If you have liability insurance in Missouri, you automatically have uninsured motorist coverage as well. This covers you if you are hurt by an uninsured driver, a phantom vehicle, and even if you are a pedestrian or a passenger in an uninsured vehicle. Because this insurance protects you, it is smart to buy as much coverage as you can afford.
Underinsured motorist coverage
If your injuries exceed the at fault’ driver’s liability insurance coverage, underinsured motorist coverage helps cover your damages. It is one of the few types of automobile insurance, like uninsured motorist and medical payments coverage, that pays you when you are injured due to someone else’s negligence. It usually costs in excess of $25,000 for an emergency room visit after a car crash and if the other driver has minimum limits, you will be stuck covering your damages out of your own pocket if you don’t have underinsured motorist coverage. As with uninsured motorist coverage, buy as much as you can afford.
Medical Payments Coverage
This coverage pays you for your medical bills regardless of who is at fault. It also covers your passengers. Policies vary and some only cover the payments in excess of your health insurance so ask questions before you buy medical payments coverage.
What If My Claim is Denied?
If you get into a car accident and your insurer denies your claim even though your policy covers it, you may be experiencing bad faith or vexatious refusal.
Bad Faith
Bad faith describes when a third party is denied their claim even though it is within the policy limits of the first party. For example, Driver A is injured by Driver B. However, even though by law Driver B’s insurer is supposed to cover the damages and personal injuries suffered by Driver A, they try to deny a claim or refuse to pay the full value ofdamages. A bad faith claim holds the insurance company accountable for “gambling” with your wallet.
Vexatious Refusal
Vexatious refusal to pay describes incidents when a first party claim is wrongfully denied. For example, if a person files a fire or theft claim against his or her own insurance company and they refuse to pay without having a logical reason.
A few common indicators of bad faith include as follows.
- Unnecessary delays and failure to investigate the claim fully before denying it.
- Stating that your claim isn’t covered, even though you have a policy that applies.
- Claiming that the insurer’s policy has somehow changed, but you had not been notified.
Missouri laws regarding bad faith and vexatious refusal are always changing. It’s important to have a personal injuryattorney well versed in these cases on your side to ensure that you get the compensation you deserve. If you’ve been injured in an accident, contact us today to schedule your initial consultation for free legal advice from a St. Louis attorney near you.