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Insurance - Head Matters


6. Auto Insurance

In some states, such as Colorado, automobile insurance is based on the principle of fault. The person who is at fault in an accident must pay for the damages that result. While this may sound like a very easy process to implement, insurance companies often use lengthy court cases to prove who was at fault. Injured people often must wait a long time before they get settlements.

Several states have implemented no-fault laws. These laws don’t eliminate the principle of fault but require insurance companies to pay their own policyholders the damages sustained in accidents. Insurance companies are not allowed to sue each other if the damages are below a minimum amount, but they can sue if the damages are above the minimum. In either case, policyholders do not have to wait to get settlements.

Types and cost

Auto insurance coverage is offered in different coverage types. It is usually easiest to determine what you are required to purchase. Then, you determine what you have that needs to be additionally protected.

Auto insurance premium costs or rates can vary greatly from person to person and vehicle to vehicle. Auto insurance rates take into account where a person lives, the driving records of anyone living at that residance who might be driving the vehicle, previous insurance history and credit score

Submitting a claim

When an insured vehicle is in an accident or needs to use their insurance for any reason, a claim is submitted. A claim is a notification to an insurance company requesting payment of an amount due under the terms of the policy. Once the claim is submitted the insurance company will work with their client to settle the claim according to the terms of the policy and the laws in the state.

When you make a claim and your insurance company pays for damages based on that claim, you will usually be required to pay a deductible. Deductibles keep insurance costs down for insurance companies and for policy owners. The higher your deductible, the more you are responsible to pay when you have a claim. However, when you have a higher deductible you usually pay a lower premium. To keep your insurance costs down but also make sure that you'll be able to recover from an accident, theft or other incident, decide how much you could reasonably afford to pay and make sure that your deductible matches that amount.

On the following pages is a breakdown of each car insurance coverage type to help you understand more about what each type of coverage protects. 

At the Scene of an Accident 
Knowing what to do if you are involved in an accident can save lives and make the claims process easier.
  1. Stop your car and find out if anyone is injured.
  2. Call 911. Tell them how many people were hurt and the types of injuries. The police will notify the nearest medical unit.
  3. Cover injured people with a blanket to keep them warm.
  4. Try to protect the accident scene. Take reasonable steps to protect your car from further damage, such as setting up flares, getting the car off the road and calling a tow truck.
  5. Ask the investigating officer where you can obtain a copy of the police report. You will probably need it when you submit your claim to your insurance company.
  6. If necessary, have the car towed to a repair shop. But remember, your insurance company probably will want to have an adjuster inspect it and appraise the damage before you order repair work done.
  7. Make notes. Keep a pad and pencil in your glove compartment. Write down:
    • license plate numbers
    • the names and addresses of all drivers and passengers involved in the accident
    • the make and model of each car
    • driver's license numbers
    • insurance information
    • the names and addresses of witnesses
    • the names and badge numbers of police officers or other emergency personnel.
  1. If you run into an unattended vehicle or object, try to find the owner. If you can't, leave a note containing your name, address and phone number. Record the details of the accident.
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