Auto Insurance: Does Your Coverage Really Protect You?

Auto insurance is a necessity for car owners, and there are many companies offering a range of coverage options and discounts. Some of the top auto insurance companies include Progressive, Nationwide, USAA, Travelers, Erie, and Geico. These companies offer various benefits such as affordable rates, accident forgiveness, and bundling options. When choosing an auto insurance company, it is important to consider factors such as price, service, and the level of customization offered.

Discounts and savings

Types of Discounts

Auto insurance discounts fall into a few categories, and there may be dozens of possible discounts within those categories. The categories range from auto insurance discounts for your driving habits to car features. Here are some common types of discounts:

• Multi-policy or bundling discounts: These are for having more than one type of insurance with the same company.
• Safe driver/good driver discounts: For drivers with a clean record, no tickets or accidents in the past three to five years.
• Student discounts: For high school or college students (usually under the age of 25) with good grades.
• Electronic/paperless billing discounts: For receiving insurance bills and policies electronically.
• Senior/mature driver discounts
• Profession/occupation/group membership/education discounts: Discounts through your employer, school, team, club or other membership.
• Driver education/defensive driving discounts: For completing an approved driver safety course. May be limited to seniors, teens or inexperienced drivers.
• Early signing/renewal discounts: For signing or renewing before your policy expires.
• New vehicle discounts: For owning a car that is three years old or newer.
• Multi-car discounts: For insuring more than one car on a single auto insurance policy.
• Anti-lock brake discounts: For cars with anti-lock brakes.
• Anti-theft system discounts: For cars with a built-in anti-theft system.
• Daytime running lights discounts: For vehicles equipped with daytime running lights as standard equipment.
• Seat belt use discounts: For drivers and passengers who always wear seat belts.
• Good student discounts: For full-time students with good grades.
• Driver affiliation discounts: For active military personnel and their households.
• Customer loyalty discounts: For customers who have been with the company for a certain number of years.

The amount you can save with car insurance discounts varies. Some of the bigger discounts include safe driver, accident-free driver, student, home and auto insurance bundle, and multi-car discounts. Other discounts might save just 2%. It's important to note that advertised discounts might not apply to your entire insurance bill. There may also be a limit on the overall discount you can get on a policy. For example, some insurers permit total discounts of no more than 25% or 30%.

Your savings may also depend on where you live; not all discounts are offered in all states.

Coverage options

Auto insurance coverage options vary depending on the insurance company and the state in which you live. However, there are some standard coverage options that are widely available.

Liability Coverages

Liability coverages include bodily injury liability and property damage liability. The former pays damages for bodily injury or death resulting from an accident for which you are at fault, while the latter pays for damage to someone else's property resulting from an accident for which you are at fault. It is a good idea to have the same level of bodily injury coverage for all your cars and consider an umbrella policy for additional coverage in more serious accidents and lawsuits.

Medical Payments Coverage

Medical payments coverage may pay for medical and funeral expenses for you, your family members, or passengers.

Personal Injury Protection Coverage

Personal injury protection (PIP) is offered in some states and protects you in a similar way as medical payments coverage, but with additional benefits.

Uninsured Motorist Coverages

Uninsured motorist coverage may help compensate you for your injuries or property damage caused by a driver without insurance, while underinsured motorist coverage can protect you from at-fault drivers with insufficient insurance coverage to pay your claim.

Collision Coverage

Collision coverage pays to repair or replace your damaged vehicle if you collide with another object or vehicle.

Comprehensive Coverage

Comprehensive coverage protects your vehicle from events out of your control, including fire, theft, vandalism, and more.

Additional Auto Insurance Coverages

Other additional auto insurance coverages include emergency road service, rental reimbursement, and mechanical breakdown insurance.

When choosing your auto insurance coverage, it is important to consider your state's requirements, your lienholder's coverage requirements, the value of your vehicle, and your budget.

Customer satisfaction

Amica Mutual, State Farm and USAA are often named as the companies with the best customer service. Amica Mutual has received the highest score in the J.D. Power Auto Insurance Study for 10 consecutive years and is praised for its high customer satisfaction ratings and quick claims handling. State Farm is one of the few national insurers to make the list and ranks above average in overall customer satisfaction in 10 out of the 11 regions surveyed. USAA is only available to military members, veterans and their families, but it has high customer satisfaction ratings and military-specific perks, such as a discount for storing your car on a military base.

Other auto insurance companies that are rated highly for customer satisfaction include:

• Erie Insurance: Erie has been rated the top auto insurer by Insure.com, receiving 4.67 out of 5 stars. It was rated the best for customer satisfaction, ease of service, and most trustworthy. 100% of customers surveyed said they were renewing their policies and would recommend the company.
• NJM Insurance: NJM Insurance has received high customer satisfaction ratings and has fewer customer complaints than expected for a company of its size.
• The Hartford: The Hartford has received the highest score in the Northwest region and in Florida in the J.D. Power Auto Insurance Study for 2022. It offers a 24/7 car insurance claims hotline and a wide range of coverage options.
• Auto-Owners Insurance: Auto-Owners Insurance has received high ratings for customer satisfaction and is ranked highly for affordable monthly premiums and trustworthiness.
• Wawanesa: Wawanesa has received the highest score in California in the J.D. Power Auto Insurance Study for three consecutive years (2020, 2021 and 2022). It may offer cheaper rates as it only insures good drivers and offers multiple discounts.

Claims

When it comes to auto insurance claims, there are several key points to keep in mind. Firstly, it is important to understand the circumstances under which a claim should or should not be filed. In the event of an accident involving injuries to any party, a claim must be filed immediately, as medical expenses can quickly accumulate. If fault is unclear, a claim should also be filed, as insurance companies will work together to assign responsibility and arrange payouts. Additionally, if the vehicle is deemed a significant or total loss, a claim should be filed through collision or property damage coverage. On the other hand, if only your own vehicle is damaged and no one is injured, it may be more cost-effective to pay for repairs out of pocket, especially if the damage is minimal, as filing a claim can result in increased insurance premiums.

When filing a claim, it is crucial to act promptly and provide accurate information. Contact your insurance company immediately and gather all the necessary documents, including a police report if available. Keep track of any deadlines for submitting forms and supplying additional information. It is also worth looking into rental car reimbursement options through your policy. Remember that lying to your insurance company or providing false information is considered fraud and can lead to serious consequences.

Understanding the claims process and your coverage is essential. Liability insurance is mandatory in almost every state and covers damages to others in the event that you are at fault. Collision and comprehensive insurance are optional but cover damages to your vehicle. In no-fault states, personal injury protection (PIP) or medical payments (MedPay) coverage is used for injury claims, and you can only sue the other driver if certain qualifications are met. Underinsured motorist coverage can protect you if the at-fault driver doesn't have sufficient insurance.

If your claim is denied, don't panic. Request the reason for denial in writing and review the evidence. You may need to submit additional information or appeal the decision, and consulting an attorney is always an option. Remember that insurance companies are required to pay all claims promptly and reasonably, but the specific timeframe may vary depending on the circumstances of each claim.

Additional services

Auto insurance companies offer a variety of additional services and add-ons to their policies. These services vary across companies and are designed to meet the specific needs of their customers. Here are some of the additional services offered by auto insurance companies:

Roadside Assistance

Roadside assistance allows customers to contact a third-party roadside contractor for help in case their vehicle breaks down. This service typically includes towing the vehicle to a repair shop, replacing a flat tire, and providing fuel if the vehicle runs out of gas. Some companies may have certain limitations, such as towing only within a specific radius or providing only enough fuel to reach the nearest gas station.

GAP Coverage

Guaranteed Asset Protection (GAP) coverage is typically offered for new vehicles. When you purchase a new car, its market value is lower than the price you paid. If the vehicle is totalled in an accident, GAP coverage will pay the remaining amount between the market value and the loan balance, as insurance companies usually only pay out the market value. GAP coverage is not necessary if your car loan is not underwater.

Vanishing Deductible

The vanishing deductible is a relatively new concept in the auto insurance industry. It is usually offered only on premium insurance plans. With this add-on, the insurance company rewards customers for each renewal period they drive without accidents, tickets, or claims by reducing their deductible. The amount of reduction and the limitations on how low the deductible can go vary across insurance companies.

Uninsured and Underinsured Motorist Coverage

Uninsured motorist coverage protects you in case you are hit by a driver who does not have insurance. Underinsured motorist coverage, which may be offered separately or in conjunction with uninsured motorist coverage, covers the difference when the at-fault driver's insurance is not sufficient to cover the damages.

Rental Car Reimbursement

Rental car reimbursement insurance covers the cost of renting a vehicle while your car is being repaired after an accident. This service may have certain limitations, and it is important to check if it is automatically included in your policy or needs to be added separately.

Personal Injury Protection (PIP)

Personal Injury Protection (PIP) covers your medical costs and a portion of your lost wages if you are injured in a motor vehicle accident, regardless of who is at fault. PIP is mandatory in some states but not in others.

When considering additional services and add-ons, it is important to evaluate their value and how they align with your specific needs. While these services can provide extra coverage, it is worth assessing if the long-term costs outweigh the potential benefits.

Frequently asked questions