Understanding Auto Insurance: What Is Afa Coverage?

AFA, or the Air & Space Forces Association, offers a range of insurance programs for its members, including auto insurance. The association has partnered with USAA to provide industry-leading service and coverage for members' homes, cars, and belongings, designed to fit their budgets and needs. AFA members can also take advantage of flexible dental insurance coverage and various life insurance plans, including 10-year level term life, decreasing term life, and term life insurance.

What is included in auto insurance coverage?

Auto insurance provides financial protection in the event of an accident or theft. The exact details of what's covered will depend on the minimum coverage requirements of the state in which the policy was purchased, and any additional coverage options included.

Nearly every state requires car owners to carry bodily injury liability coverage and property damage liability coverage. Bodily injury liability covers costs associated with injuries or death caused by the policyholder or another driver operating their car. Property damage liability reimburses others for damage caused by the policyholder or another driver operating their car to another vehicle or other property, such as a fence, building, or utility pole.

Many states also require medical payments or personal injury protection (PIP) coverage, which reimburses medical expenses for injuries to the policyholder or their passengers, as well as lost wages and other related expenses.

Uninsured motorist coverage is also frequently required. This reimburses the policyholder when an accident is caused by an uninsured motorist or in the case of a hit-and-run. Underinsured motorist coverage, which covers costs when another driver lacks adequate coverage, can also be purchased.

While basic auto insurance covers damage to other vehicles, it does not typically cover damage to the policyholder's own car. Collision coverage and comprehensive coverage are two types of optional auto insurance that can be purchased to cover damage to the policyholder's car. Collision coverage reimburses the policyholder for damage to their car resulting from a collision with another vehicle or object, while comprehensive coverage provides protection against theft and damage caused by incidents other than a collision, such as fire, flood, vandalism, or natural disasters.

Customizing Coverage

Auto insurance coverages are typically priced individually, allowing policyholders to customize coverage amounts to suit their needs and budget. While state-required minimums may be sufficient for some, others may want to consider purchasing higher levels of coverage to protect against the costs of a serious accident.

Who is Covered?

An auto insurance policy will cover the policyholder and other family members on the policy, whether driving the insured car or someone else’s car with their permission. The policy may also provide coverage if someone not on the policy is driving the insured car with the policyholder's consent.

Personal auto insurance policies generally only cover personal driving and do not provide coverage for commercial use, such as delivering pizzas or providing transportation through ride-sharing services. However, some auto insurers now offer supplemental insurance products that extend coverage for vehicle owners providing ride-sharing services.

What is excluded from auto insurance coverage?

Auto insurance exclusions are provisions written into your car insurance policy that outline what is not covered by your insurance company in the event of an accident. Exclusions are typically listed in the "Exclusions" section of your policy. Understanding these exclusions is important so that you can ensure you have the necessary coverage in the event of an incident.

Types of Exclusions

Individual Drivers

An insurance company may exclude coverage for a particular driver, often a high-risk driver with a history of DUIs, multiple traffic violations, or accidents. Excluding these drivers helps insurance companies manage risk and maintain reasonable premium rates. In some cases, the insurance company may require the exclusion of certain drivers, while in other cases, policyholders may choose to exclude a driver to lower their insurance rates. It is important to note that excluded drivers are not covered even if they drive the insured vehicle with the owner's permission.

Certain Types of Damages or Injuries

Liability property damage policies, for example, typically exclude damages to the insured's own vehicle in an accident, as they only cover damages and injuries to other drivers and their property. Medical payments clauses may also have exclusions, such as not covering medical expenses if the insured was driving for business use, performing stunts, or driving without the owner's permission.

Weather Events or Natural Disasters

Collision insurance usually does not cover damages caused by hurricanes, floods, or tornadoes. Comprehensive coverage is needed to protect against these types of natural disasters.

Livery Conveyance

Some insurance companies will exclude coverage if the insured vehicle is used to carry passengers or materials for compensation.

Fraud or Intentional Acts

Intentional damage, fraud, or using a vehicle for criminal activities are typically excluded from coverage.

Certain Vehicles or Vehicle Types

Vehicles that are regularly used but not listed on the policy may be excluded from coverage. Additionally, vehicle types such as motorcycles typically require a separate endorsement or policy.

Certain Uses of the Vehicle

Engaging in drag racing or other high-risk behaviours while driving may void coverage in the event of an accident.

Catastrophes

Damages caused by specific catastrophic events, such as nuclear exposure, are generally excluded from standard policies.

Custom Equipment

Custom parts and equipment on a vehicle are often excluded from coverage unless a separate endorsement is purchased.

Understanding Your Policy

It is important to carefully review your auto insurance policy to understand all the exclusions and ensure you have the necessary coverage. While exclusions are typically listed in the policy, they may not always be easy to find, so reading the fine print is essential. If you have any questions or concerns, it is recommended to speak with your insurance agent to clarify what is and is not covered.

What is the process for making a claim?

The process for making a car insurance claim can be daunting, but it doesn't have to be. Here is a step-by-step guide on what to do if you ever find yourself in this situation:

Soon After the Crash:

• Collect Information: Gather as much information about the crash as possible, including photos from the scene, names of other drivers, witnesses, and responding police officers, license numbers for all vehicles involved, and the other driver's insurance company (if they are at fault).
• Contact Your Insurance Company: Report the incident to your insurer as soon as possible. They can assist with arranging a tow truck and repair shop recommendations. If your car is not drivable and your policy includes rental coverage, they can help arrange a rental car. Contacting your insurer early will also help you learn about critical deadlines, such as time limits for filing claims and submitting bills.
• Protect Your Vehicle: If your car is still drivable and hasn't been taken to a repair shop, you are responsible for preventing further damage. For example, if there are broken windows, you'll need to keep rain from getting in, as any subsequent damage may not be covered by your insurance.

During the Claim Process:

• Insurer Review: A claims adjuster from your insurance company will review your policy to determine coverage and deductibles, as well as the accident report to establish fault. They will contact you for additional details, speak with other parties involved, and may send an adjuster to review the damage and make an initial repair cost estimate.
• Repair Shop Estimate: The repair shop will inspect the damage and provide an estimate of the cost of repairs. If your car is still drivable, inform your insurer of the repair shop location for the estimate. You may prefer to use Original Equipment Manufacturer (OEM) parts, but depending on your policy, you may need to pay the difference between aftermarket parts and OEM parts.
• Vehicle Repairs: The time it takes to complete repairs will depend on the severity of the damage. It could be 14 days or more before your vehicle is ready.
• Payment to Repair Shop: Depending on your policy, your insurance company may pay the repair shop directly. If not, you will need to pay and then get reimbursed by your insurer. They will send you a check or deposit the claim amount into your account electronically.

Remember, if you have any questions or concerns during the claim process, don't hesitate to reach out to your claims adjuster or a manager for clarification. If your claim is denied, ask for a written explanation, and consider disputing the decision or seeking legal advice if necessary.

How much does auto insurance coverage cost?

The cost of auto insurance coverage varies depending on several factors, including the type of coverage, the driver's age, gender, driving record, credit score, and location. Let's take a closer look at these factors and break down the cost of auto insurance coverage.

Types of Coverage

The cost of auto insurance coverage depends on the types of coverage you choose. Liability coverage, which is mandatory in most states, typically includes bodily injury and property damage liability. The recommended coverage limits for bodily injury are $100,000 per person and $300,000 per accident, while for property damage, it is recommended to have at least $100,000 in coverage. Uninsured or underinsured motorist coverage, personal injury protection, collision insurance, and comprehensive insurance are other types of coverage that can be added to your policy, each with its own cost.

Age and Gender

Age and gender also play a role in determining the cost of auto insurance coverage. Younger drivers, especially teens, tend to pay more for auto insurance due to their higher risk of being involved in accidents. As drivers gain more experience, rates usually decrease until they reach their 70s, when rates may increase again due to potential age-related issues such as decreased reaction time and poorer eyesight. In terms of gender, men tend to pay more for auto insurance than women, as data shows they are more likely to engage in riskier driving behaviors. However, the difference in rates between men and women tends to decrease as they get older.

Driving Record

Your driving record can significantly impact the cost of auto insurance coverage. Drivers with a clean driving record typically pay lower rates than those with accidents, speeding tickets, or DUI convictions on their record. An at-fault accident can increase your rates by around 44%, while a DUI conviction can result in a 94% increase in premiums.

Credit Score

In states where credit score is allowed to be considered when determining insurance rates, drivers with poor credit may pay significantly more for auto insurance than those with good credit. This is because drivers with poor credit are seen as more likely to file claims, posing a higher financial risk to insurers.

Location

The cost of auto insurance coverage also varies by state and even by city. The average annual cost of full coverage auto insurance in the United States is $2,348, while minimum coverage costs around $639 per year. However, these rates can differ significantly from state to state. For example, Idaho has one of the lowest average annual rates for full coverage at $1,326, while New York has one of the highest at $3,757.

Other Factors

Other factors that can influence the cost of auto insurance coverage include your occupation, annual mileage, marital status, vehicle type, and the coverage limits and deductibles you choose. Additionally, insurance companies may offer discounts for various reasons, such as being a good student, having a clean driving record, or bundling multiple policies.

In conclusion, the cost of auto insurance coverage depends on a combination of factors, and it is essential to compare quotes from multiple insurance providers to find the best rates and coverage options for your specific situation.

What factors influence the cost of auto insurance coverage?

Auto insurance rates are calculated based on several factors, each of which indicates the likelihood of a driver filing a claim. While some of these factors are within the driver's control, others are not. Here are some of the most common factors that influence the cost of auto insurance coverage:

Age

Age is a significant factor in determining insurance rates, especially for young and older drivers. Teen drivers tend to pay the highest insurance premiums as they are considered very risky and potentially expensive clients. Statistically, they are more likely to drive recklessly and get into accidents. After the age of 25, a driver's insurance rates start to decrease as they gain more driving experience and are seen as less risky. However, insurance rates may increase again after the age of 65, as older drivers are more likely to get into accidents and suffer injuries.

Driving Record

A driver's history, including traffic violations, accidents, and claims, significantly impacts insurance rates. A clean driving record can result in lower premiums, while multiple infractions or accidents can increase costs by up to 200%. Insurance companies view a driver's past as a predictor of future performance, and even a single accident can raise rates for 3-5 years.

Credit History

An individual's credit score is a statistical tool used by insurers to predict the likelihood of filing a claim. Drivers with poor credit scores tend to pay higher insurance rates, as data shows they are more likely to file expensive claims. In most states, credit history is a significant factor in calculating insurance premiums, with drivers with poor credit paying up to 71% more than those with good credit.

Vehicle Type

The type of vehicle being insured also affects the cost of coverage. Insurers consider the safety ratings, likelihood of theft, repair costs, engine size, and overall safety record of the vehicle. Safe vehicles with high safety ratings may qualify for premium discounts, while vehicles with high repair costs or poor safety records can increase insurance rates.

Location

The location of the driver, including the state and zip code, plays a role in insurance rates. State requirements for minimum coverage vary significantly, with a difference of up to 318% in premiums across states. Additionally, urban drivers often pay higher insurance prices than those in rural areas due to higher rates of vandalism, theft, and accidents. The specific zip code can also impact rates, with higher rates in areas with higher population density, crime rates, or natural disaster risks.

Gender

In some states, gender influences insurance rates, particularly for young drivers. Male teen drivers often pay higher premiums than female teen drivers, as they are perceived to be more likely to take risks and have more accidents. However, the gender gap tends to even out for drivers in their 30s.

Marital Status

Married drivers often benefit from lower insurance rates, as they are seen as less risky. Historical data suggests that married couples share driving duties and have fewer accidents, with up to 50% fewer accidents compared to other drivers.

Annual Mileage

The number of miles driven annually can also impact insurance rates. Drivers who use their vehicles for long commutes or work are on the road more often and, therefore, have a higher chance of being involved in an accident. As a result, insurance companies may charge higher premiums for those with longer commutes or higher annual mileage.

Insurance Coverage

The type and amount of insurance coverage also influence the cost. The more coverage a driver adds, the higher the insurance premiums will be. This includes factors such as collision coverage, comprehensive coverage, and liability insurance. Additionally, higher coverage limits and lower deductibles can also increase the overall cost of insurance.

Insurance Company

The choice of insurance company can also significantly impact the cost of auto insurance. Rates can vary substantially between companies, and it is essential to compare quotes from multiple providers to find the most affordable option.

Frequently asked questions