What emergency road service is, how it works, should you just use your auto club’s service, and questions to ask before signing up.

Looks like he needs some emergency road serice.

Once upon the time emergency road service, aka ‘emergency roadside service’ was the exclusive domain of auto clubs such as the American Automobile Association (AAA).

Today these services are increasingly offered by auto insurance companies as well. To further blur the lines, AAA and other auto clubs have entered the auto insurance field in many states.

How Emergency Road Service Works

Auto insurance traditionally considers regular automobile maintenance to be an exclusion (a situation that is specifically not covered by the policy). While this remains the case with nearly every auto policy, many companies now offer emergency roadside assistance.

Emergency roadside assistance is covered in much the same way as towing. Depending on the company and whoever is actually providing the service, the claim is either paid directly to the roadside assistance service, or more typically to the policyholder as a reimbursement once the claim is made.

Emergency roadside assistance is paid on a per occurrence basis and capped at a modest amount, typically $100, depending on the company. This limit is generally not available in other amounts. You either have emergency roadside assistance or you don’t. Claims usually require little more than a copy of the receipt provided to the insurance company.

Auto Club or Insurance Coverage?

Like other secondary auto insurance coverages, emergency roadside assistance is often quite inexpensive. It’s also very useful. However, it’s by no means necessary in all instances.

Obviously, if you’re already a member of an auto club that provides emergency roadside assistance, there’s no need to have it on your insurance too. Depending on your area, auto clubs may offer a better emergency roadside assistance program anyway. If you’re looking at the coverage, checkout the auto club first.

What Exactly does Emergency Road Service Cover?

Also check to see exactly what is covered by your insurance company’s emergency roadside assistance. These are all good questions to ask of both the insurance company and the auto club:

• Will they provide gas if you run out?
• Will they tow your car if necessary, or is the towing coverage separate?
• What if you break down in a rural area, or out of state?

It stands to reason that older cars are more likely to break down on the road than newer cars. If you have a newer car, you may want to take that into consideration. Also, if you’re handy with vehicles on your own, you may be your own best emergency roadside assistance.

Consider all these factors before signing up for emergency roadside assistance with your insurance company.

What is a car insurance deductible, different levels, making changes, and why the comprehensive deductible is different.

How much will you pay out on your next accident?

Insurance is not only a business of statistics – it’s a business of terminology as well. Learning insurance jargon is a big part of  insurance education.

One of the most important of these terms is “deductible.” Especially in auto insurance, it comes up again and again. Every insurance agent needs to know it inside and out. That’s a good idea for everyone else as well.

What is a Deductible?

In simplest terms, a deductible is predetermined amount that you agree to pay on any claim before the insurance company kicks in. Deductibles feature prominently in just about all property and casualty insurance lines, including homeowners, commercial and inland marine policies in addition to auto insurance.

Different deductibles often apply to different insurance coverages, even within the same policy. For example a typical full coverage auto insurance policy may feature a $500 collision deductible and a $100 comprehensive deductible at the same time.

Deductibles in Auto Insurance Policies

Usually deductibles in auto insurance policies apply to the full coverage lines, namely collision and comprehensive. While exact offerings vary from company to company, auto insurance deductibles are generally available in $0, $100, $250, $500 and $1,000 levels.

Higher deductibles are occasionally found in commercial auto policies, but for personal auto policies the $1,000 deductible is usually the highest available. The $1,000 deductible is also usually the upper limit allowed by auto loan creditors, or “lienholders.” Lienholders contractually require full coverage insurance until the car is paid off.

As it implies, a $0 deductible means the insurance company pays for everything on a full coverage claim. (Unless they find an exclusion in the policy). The true full coverage option is also the most expensive. Because of this the $0 deductible is not very common.

Making Change to Deductibles

Remember, the higher the deductible the lower the premium. In order to maximize cost savings many people choose the highest deductible available. This is usually $1,000. While this is fine if you’re comfortable with paying up to $1,000 for each and every claim, it can cause gaps in coverage.

For example, if you receive a repair bill for $750 on an otherwise covered event, because you have a $1,000 deductible there’s effectively no coverage. When choosing deductibles to lower your premiums, choose the highest one you’re comfortable with then go no higher.

Deductibles can be changed at any time and for any reason. There’s no need to wait for policy renewal. All you have to do is contact your company and request it. Don’t worry about putting them off; they do this sort of thing all the time.

Just remember that any changes made can’t be undone when you have an accident. If you changed your collision deductible from $100 to $1,000 yesterday and had a minor $750 accident today, it’s too late to change your mind. You can get the $100 back for tomorrow, but you’re stuck with the $1,000 deductible today.

The Comprehensive Deductible

Comprehensive deductibles are usually available in the same levels as collision deductibles, but many people choose lower comprehensive deductibles. Comprehensive claims are typically much smaller than their collision counterparts. They also often don’t count towards future premium ratings.

You could theoretically file a comprehensive claim every day and never see your auto insurance rates go up (We don’t recommend actually doing that – it’s likely to generate unwanted attention).

In addition many companies offer a different deductible scheme for auto glass claims, which are by far the most common comprehensive insurance claim. Auto glass deductibles of $0 are often quite reasonable, and sometimes even included in the policy. Make sure you know what’s available for auto glass coverage when considering your comprehensive deductible.

Med pay in no-fault states, how it works, and the critical need for getting medical payments coverage on your motorcycle policy

Somebody may need 'med pay' after this accident.

Medical payments, aka “med pay”, coverage is one of the least understood yet potentially most important secondary coverage on any auto insurance policy.

In order to maximize its use, one needs to not only know what it does, but what it doesn’t do and even when you don’t need it.

The No-Fault Question on Med Pay

Many people believe if they’re in an accident that their liability coverage will cover them and their passengers if they’re injured. This is only partially true.

If you live in a “no fault” auto insurance state this is indeed the case. No fault liability auto insurance by definition pays for your car and your interests only. Because of this, there is no need for separate medical payments coverage in no fault states. If you live in one of these states, you can skip the rest of this article.

However, most people live in a “traditional tort” auto insurance state, or a state where auto liability insurance only pays for injuries and damages to others if you’re found at fault. If you or your passengers are injured, there is no coverage under your traditional tort liability auto insurance policy. This can pose a significant problem for both you and your friends if you’re in an accident.

Never fear, however. Insurance agents in traditional tort states offer an optional coverage designed to “keep your friends your friends.” Hence, medical payments coverage is widely available as an option.

How Medical Payments Coverage Works

Similar to auto liability, medical payments coverage is offered as a limit rather than a deductible. While exact options range from company to company, these limits range from a modest $1,000 to a more robust $10,000 or more.

Medical payments coverage is often quite inexpensive. Many agents often include it in their quotes whether you ask for it or not. They do that not because they’re trying to gouge you (they actually don’t make that much on it to begin with), but rather because they think it’s that important.

Remember medical payments coverage covers both you and any passengers. It also covers you above and beyond any medical insurance you may have. If you have excellent, low deductible medical insurance, you may want to consider a low medical payments limit or dropping it entirely. If not, you definitely want the medical payments coverage.

Medical Payments and Motorcycles

To state the obvious, motorcycle drivers and riders are much more exposed to the elements than their contemporaries in cars and pickups. Logic follows they’re therefore considerably more likely to sustain personal injury in an accident.

As a result, when considering bike insurance one should also consider the highest medical payments limits available. It’s definitely more important on a motorcycle policy than an auto policy.

What is a declarations page, how to read it, and how it’s different from an auto insurance policy.

How the Declarations Page gives you a snapshot of your policy.

When your auto insurance policy is written, you get a large booklet detailing your policy conditions, terms, exclusions, and so on. Have you read it cover to cover to understand exactly what your auto insurance does for you?

Yeah, we haven’t either.

Fortunately, there is a simple way to determine what auto insurance coverages you have. It’s the declarations page.

What is a Declarations Page?

Simply put, a declarations page is a summary of your auto insurance. It shows what autos and drivers are insured, the liability limits you have, your full coverage deductibles, as well as basic policy levels for other coverages such as uninsured and underinsured coverage, medical payments, towing and other auto insurance options.

How to Read a Declarations Page

The look of a declarations page is different from company to company but usually follows pretty straightforward conventions. Insured automobiles with full VINs are clearly indicated. Drivers are typically noted by name as well. Children and other non-driving family members are often listed on the declarations page as secondary coverages such as accidental death and dismemberment may apply to them.

Large numbers such as liability limits are typically expressed in thousands. For example, if your declarations page states your liability insurance coverage is “50/100/50,” that means you have $50,000 in personal injury coverage for any one person in an accident, $100,000 in personal injury coverage for any group of people in a single accident, and $50,000 in property damage coverage.

If you have full coverage, your deductibles are clearly noted. Many people have a $500 collision deductible and a $100 comprehensive deductible. If that’s what you have, your declaration page will say so. The declarations page is also where to find how much in towing, roadside assistance or other you have. If it’s not listed, chances are you don’t have it.

The Difference Between Declarations and Policy

Your policy booklet is often a general, boilerplate explanation of your policy. It’s written for a general audience. In fact, chances are everyone with an auto policy with your company gets a copy of the exact same thing. In fact, terms specific to your policy are usually not to be found in that booklet. The declarations page fills that need.

Remember declarations pages can and do become outdated. Every time your policy renews you’ll get a new declarations page. Every time make a policy change, no matter how small, you’ll get a new declarations page as well. Declaration pages are dated and should clearly indicate your policy term. Make sure you have the most recent copy on hand. If you don’t have one, don’t be afraid to ask your insurance agent for a copy.

How to get cheaper auto insurance, when you should lower your liability limits, raise deductibles, or drop full coverage altogether

When to consider cutting auto insurance out of the budget.

No one wants to pay too much for car insurance. After all, if one can save some money by eliminating unnecessary expenses, why not consider your insurance bill?

It’s not always a good idea to skimp on car insurance. Being cheap is great – being dumb is not. The ideal is to purchase coverage that will be there for you in a worst-case scenario in the most cost-effective manner possible.

In order to properly budget car insurance, the trick is to know how car insurance works. The main ways people save on their premiums are to either lower their liability limits or raise their collision and comprehensive deductibles.

Other types of coverage, such as uninsured and underinsured coverage (UM/UIM), and medical payments in states that don’t have “no-fault” laws, represent a small percentage of the auto insurance premium and therefore don’t generate significant savings when changed. These are best left alone.

Lowering Liability Limits If It Makes Sense

Liability limits are often expressed in a group of three numbers, such as 25/50/15. This example represents limits of $25,000 in injury coverage to one person in an accident, $50,000 in injury coverage to any number of persons involved in a single accident, and $15,000 in property damage. This 25/50/15 level is the state liability minimum in Idaho and several other states. Some states have even lower minimum liability requirements.

In other words, keeping your insurance at state liability limits is often insufficient for anything other than minor accidents. If you’re found at fault totaling a new Mercedes and injuring three people, the state minimums will be exceeded very quickly. You will probably be personally liable for the difference. Accordingly many insurance agents recommend carrying liability limits of no less than 50/100/50 – often more in metro areas.

Raising Deductibles if You Can

If you’re still making car payments, your bank will require you to carry full coverage. If you don’t, your lienholder has the right to “force place” insurance on your car and bill you for it. Force placed insurance is almost always very expensive. Keeping your own full coverage is a much cheaper alternative.

Fortunately most lienholders only require deductibles of $1,000. In addition, most personal auto insurers offer $1,000 as their highest deductible. This gives you some leeway in maximizing your insurance value.

When considering your deductible, ask yourself how much you are willing to personally pay to get your car fixed and then set your deductible accordingly. Deductibles are typically available in $0, $250, $500 and $1,000 levels, although your company may offer something different.

To minimize your insurance cost don’t set your deductible any lower than what you’re comfortable with, and to give you peace of mind don’t go any higher. Also remember collision and comprehensive deductibles are different and separate. Many insurance companies cover glass repair (but not replacement) at a $0 deductible for a small cost or even no additional cost at all. Many people keep their comprehensive deductible lower than their collision deductible.

Consider Dropping Comprehensive and Collision?

No state requires collision or comprehensive coverage. Once the car is paid off, you can consider dropping full-coverage entirely. However, if you do this know there’s no coverage if your car is stolen or vandalized, and no coverage to fix your car unless someone else hits you and is found at fault.

In this situation ask yourself if you would be OK walking away from the vehicle if something major happened to it. If you can afford it, then dropping full coverage may be a good idea. Alternatively, it is often possible to drop collision coverage but keep comprehensive, or vice versa. Talk to your agent for more information on that.