Bbb Auto Insurance: What You Need To Know

The Better Business Bureau (BBB) provides resources for businesses and consumers. While the BBB does not handle auto insurance directly, it offers a directory of auto insurance companies and agents, as well as general tips on purchasing insurance. The BBB also provides ratings and reviews for insurance companies, helping consumers make informed choices. It is important to note that the BBB is not an insurance provider but a resource for consumers to find trustworthy businesses.

No-fault insurance and insurance pricing policies

No-fault insurance, also known as personal injury protection (PIP), covers medical expenses for the policyholder and their passengers after a crash in a no-fault state. It is available in 12 US states: Florida, Hawaii, Kansas, Kentucky, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Dakota, Pennsylvania, and Utah. In these states, each driver files a claim with their insurance provider, regardless of who is at fault. No-fault insurance covers medical expenses, lost wages, housekeeping and childcare expenses, and survivor benefits. It does not cover damage to your vehicle or personal property.

No-fault insurance is mandatory in some states and optional in others. The cost of no-fault insurance varies based on the insurer, coverage limits, and location. While in theory, it is supposed to lower insurance costs, in practice, rates are generally higher in no-fault states compared to at-fault states. This is because these states require drivers to purchase more coverage.

No-fault insurance works to reduce the demands on the court system associated with car accident-related lawsuits. It also lowers premium costs by avoiding expensive litigation over the causes of collisions, while providing quick payments for injuries or loss of property. However, no-fault insurance typically doesn't pay damages for pain and suffering.

Insurance requirements

The Better Business Bureau (BBB) is a great resource for finding insurance companies and understanding insurance requirements. BBB provides a directory of accredited insurance businesses, allowing consumers to make informed choices.

When it comes to auto insurance, BBB offers a comprehensive list of companies that provide various types of vehicle coverage, including auto insurance, property insurance, and homeowners insurance. These companies are spread across different states, ensuring that individuals can find local options.

It is important to note that insurance requirements may also depend on the insurance company and the specific policy chosen. For example, some insurance companies may offer additional coverage options, such as collision coverage, comprehensive coverage, or personal injury protection, which may be required in certain situations.

Furthermore, insurance requirements can be influenced by factors such as the age and value of the vehicle, the driving record and claims history of the policyholder, and the presence of safety features or anti-theft devices in the vehicle. It is always advisable to review the specific insurance requirements with the chosen insurance provider to ensure adequate coverage.

Types of auto insurance

Auto insurance is a requirement in most US states, and while the specific requirements vary, there are several types of auto insurance that are commonly available. Here is a list of some of the most common types of auto insurance:

Liability Insurance

Liability insurance is a legal requirement in most US states. It covers the cost of injuries and property damage to others resulting from an accident where you are at fault. Liability insurance usually consists of two parts: bodily injury liability insurance and property damage liability insurance. The former covers the medical expenses of the other driver in an accident where you are at fault, while the latter covers the cost of repairing damage to their property.

Collision Insurance

Collision insurance covers the cost of repairing or replacing your car after an accident involving another vehicle. It also covers accidents involving objects, such as trees or guardrails. Collision insurance is not required by law in any state but is usually required by lenders if you lease or finance your vehicle.

Comprehensive Insurance

Comprehensive insurance provides additional coverage in the event of an accident involving another vehicle. It helps pay for damage to your car resulting from incidents other than collisions, such as vandalism, certain weather events, and accidents involving animals. Like collision insurance, comprehensive insurance is not required by any state but is usually mandated by lenders if you lease or finance your vehicle.

Uninsured Motorist Insurance

Uninsured motorist insurance protects you and your car in the event of an accident caused by an uninsured driver or a hit-and-run driver. This type of insurance is often paired with underinsured motorist insurance, which covers accidents with drivers whose insurance is insufficient to cover the costs.

Medical Payments Coverage (MedPay)

Medical payments coverage helps pay for medical expenses and funeral costs resulting from a covered accident, regardless of who is at fault. MedPay is optional in most states but mandatory in some. It does not cover lost wages or other expenses related to the accident.

Personal Injury Protection (PIP)

Personal injury protection insurance covers certain medical expenses, funeral costs, and loss of income resulting from a covered accident. PIP is mandatory in some states, typically those with no-fault insurance laws, which require each driver's insurance to cover their own injuries and property damage, regardless of who is at fault.

Other Types of Auto Insurance

In addition to the types mentioned above, there are several other optional types of auto insurance available, including:

• Towing and labor insurance: Reimburses you for towing and repair costs.
• Rental reimbursement insurance: Helps pay for a rental car if your vehicle is undrivable after an accident.
• Classic car insurance: Specialised coverage for vintage and classic cars, including agreed-upon full appreciated value.
• Roadside assistance: Covers towing, flat-tire assistance, battery jump-starts, and help with vehicle lockouts.
• Gap insurance: Covers the difference between the actual cash value of your vehicle after an accident and the amount remaining on your car loan or lease.

Choosing an insurer and policy

When choosing an auto insurance policy, it is important to consider your needs, what you can afford, and which insurance company to go with. Here are some steps to help you choose the right insurer and policy:

Determine the Level of Coverage You Need:

Firstly, you should understand the different types of auto insurance coverage available. The basic coverage is usually liability insurance, which covers the damages you cause to others in an accident. However, it is important to note that each state has its own minimum car insurance requirements, so be sure to check the specific requirements for your state.

In addition to liability coverage, you may also want to consider the following types of coverage:

• Collision coverage: This pays to fix your car if it is damaged in an accident, regardless of who is at fault.
• Comprehensive coverage: This covers damage to your car caused by something other than a collision, such as natural disasters, theft, or vandalism.
• Uninsured/underinsured motorist coverage: This covers your injuries and property damage if you are hit by a driver without insurance or with insufficient insurance.
• Personal injury protection (PIP): This covers your medical bills, lost wages, and other expenses after an accident, regardless of who is at fault.

Consider Your Budget:

When choosing an auto insurance policy, you need to balance your budget with the level of coverage you want. Try to purchase the maximum coverage you can comfortably afford to ensure you are protected in most scenarios. A good rule of thumb is to buy enough insurance to cover the costs you could incur in a lawsuit if you are at fault in an accident.

Research and Compare Insurance Companies:

It is important to research and compare multiple insurance companies to find the best fit for your needs. Some factors to consider include:

• Financial health: Check the financial strength and stability of the insurance company to ensure they will be able to pay out claims. You can refer to ratings from independent agencies like A.M. Best, Fitch, Moody's, and Standard & Poor's.
• Customer service: Look into the company's customer service reputation, including their claims service and responsiveness.
• Discounts: Find out what discounts each company offers, as this can significantly impact your premium. Common discounts include good student discounts, low mileage discounts, safe driver discounts, and more.
• Coverage options: Ensure the company offers all the types of coverage you need.
• Price: Compare quotes from multiple companies to find the most competitive rates.

Choose Your Deductible:

When selecting an auto insurance policy, you will need to choose your deductible, which is the amount you will pay out of pocket per claim before the insurance company covers the rest. Typically, deductibles are $500 or $1,000, but they can vary depending on the company and the type of coverage. A higher deductible will result in a lower premium, but you will need to pay more out of pocket if you need to make a claim.

By following these steps, you can make an informed decision when choosing an auto insurance company and policy that best suits your needs and budget.

Understanding your policy

Understanding your auto insurance policy is important to ensure you know exactly what your coverage includes and what it excludes. Auto insurance policies are often filled with legal jargon that can make them confusing to understand. Here are some tips to help you understand your policy better:

Review the Declarations Page

The declarations page is a crucial part of your auto insurance policy. It summarizes your coverages, limits of liability, premiums, and deductibles. It also includes personal information such as your name, address, and policy number. The declarations page also lists the insured drivers and vehicles, along with their details. This page is typically the first page of your policy documents and is clearly labeled. Review this page periodically to ensure accuracy and make any necessary changes.

Understand Key Terms and Definitions

Auto insurance policies often contain a definitions section that clarifies key terms used in the policy. Pay close attention to this section as it defines who and what is covered by the policy. Bolded or defined words are important to understand, as they may have specific meanings relevant to the policy. For example, understanding what is considered a "family member" or "insured driver" is crucial. Additionally, be aware of phrases such as "does not apply to," "except," "all," and "however," as they can significantly change the meaning of coverage explanations.

Know the Coverage Types and Limits

Your auto insurance policy will outline the different types of coverage you have, such as liability, collision, comprehensive, medical payments, and uninsured/underinsured motorist coverage. Understand the limits and deductibles associated with each coverage type. Liability coverage, for instance, is typically divided into three amounts: per-person limit for bodily injury, per-incident limit for bodily injury, and a property damage limit. Know the recommended amounts and ensure your coverage is adequate.

Understand Exclusions and Endorsements

Exclusions are situations or circumstances that are not covered by your policy. Common exclusions include intentional damage to others or property, damage to your own property, accidents caused while performing illegal activities, and personal property not permanently attached to the vehicle. Endorsements, on the other hand, are optional additions to your policy, such as roadside assistance or rental car reimbursement. Understand what is excluded from your coverage and consider adding relevant endorsements to enhance your protection.

Contact Your Insurance Provider

If you have any questions or uncertainties about your auto insurance policy, don't hesitate to contact your insurance provider. They can clarify specific terms, conditions, and exclusions and ensure you fully understand your coverage. It's important to have a clear grasp of your policy to avoid any surprises in the event of an accident or incident.

Frequently asked questions