Understanding Bodily Injury Liability Coverage

Bodily injury liability coverage provides compensation for injuries to others, related legal expenses and damages your vehicle does if you cause an accident.

Auto insurance is meant to protect you by covering your bills after an accident. However, the amount of compensation can vary greatly depending on the type of claim that’s made by insurance carriers and the value of your vehicle. The decision to have your vehicle repaired or declared a total loss directly impacts how much you receive.

Determining a Claim

If you’re in an accident, the at-fault driver’s insurance carrier will analyze the approximate value of your vehicle before the accident as well as the cost to repair it afterward. Typically, the pre-accident value of your vehicle is determined by finding its actual cash value. This value is found by taking the price of a similar replacement vehicle in your area and then subtracting any pre-accident depreciation, such as your vehicle’s mileage and history.

If the cost to repair your vehicle is less than its actual cash value, insurers will usually opt to compensate you for the repairs. However, if the cost is too high or if the vehicle can’t be restored to a safe condition, insurers may declare it a total loss.

Total Loss Claims

If your vehicle is declared a total loss, you’ll be compensated with the full actual cash value of your vehicle, minus any applicable policy deductible. 

However, if a financed or loaned vehicle is declared a total loss, the insurer will pay the remaining balance to the finance company first. Here’s a breakdown of the two most common scenarios that occur when a financed vehicle is declared a total loss:

• The actual cash value of the vehicle is greater than the remaining balance of the loan. In this scenario, the insurer pays off the loan and then gives you the amount by which the actual cash value exceeds the loan balance.
• The actual cash value of the vehicle is less than the remaining balance on the loan. In this scenario, you are responsible for the difference between the actual cash value and the remaining loan balance.

Repairs and Diminished Value Claims

Getting a check for the full cost of your vehicle’s repairs may seem like a best-case scenario. However, repairs can substantially reduce your vehicle’s value. Even if it drives better than ever after being repaired, the fact that it was in an accident will taint its history and lead to a lower price if you ever choose to sell it. However, you can file a diminished value claim against an insurance carrier to try to recover any value that’s lost as a result of repairs.

Most states and insurance contracts prevent policyholders from bringing diminished value claims against their own insurers. However, if another driver is at fault for an accident and his or her insurance pays for your repairs, you may be able to use a diminished value claim to recover any lost value.

Because few vehicles are appraised immediately before they’re involved in an accident, it can be hard to prove that value has been lost after they’re repaired. Here are some tips you can use before and after an accident to prepare yourself for a successful diminished value claim:

• Check third-party websites to get an approximate value for your vehicle’s make and model.
• Take your vehicle to a pre-owned dealership after an accident for an appraisal. You can then ask for a letter that shows that your vehicle’s lower-than-average value is due to its repairs or accident history.
• Keep documentation about any repairs or enhancements to your vehicle. These documents can help show a more detailed history of your vehicle when determining its value.
• Contact us at (508) 358-5383 for more information about diminished value claims and to discuss the specifics of your situation.

WHAT TO DO IF YOU HAVE A CAR ACCIDENT

If you are in a car accident, you can contact our agency directly to report claims during regular business hours. You can also file a claim anytime. Visit our auto insurance claim reporting page to find your insurance company contact information, and report the acccident directly to your company.

DOWNLOAD A MASSACHUSETTS CRASH REPORT

Be Prepared

There are few things more dangerous and stressful than getting into an accident. Contact us at (508) 358-5383, and we will provide you with a variety of resources.

From our Trusted Choice friends

As the summer holiday season approaches, millions of Americans will take to the roads to visit family and friends. Since many will make the trip in a rented car, it’s an appropriate time to discuss one of the most frequently asked questions of agents and brokers all over the country: “Should I buy the insurance from the rental car company?”

Following are a few considerations when mulling this important decision:

Damage Waiver & Your Personal Auto Policy  

First, the good news: In many cases, a personal auto insurance policy will cover damage to a rented vehicle. That said—don’t get too comfortable! There are other costs associated with damage to a rented vehicle that the policy will not cover. For this reason, careful consideration should be given to purchasing the damage waiver offered by the rental car company.

On your personal auto policy, “Collision” insurance covers your vehicle for damage resulting from a collision with another object. “Comprehensive” (sometimes called “Other Than Collision”) covers your vehicle for theft, vandalism, falling objects and other causes not resulting from a collision. If you have a car loan, your lender will require you to purchase both. If you pay the loan off, the choice to purchase collision or comprehensive—and both or neither—is up to you.

Your personal auto policy will only cover damage to the rental car if you have the appropriate coverage type on at least one vehicle you own. For example, if you damage the rental car in a collision, you must have “collision” coverage on at least one vehicle covered by your personal auto policy. But if the rental car is stolen, vandalized, or damaged in any way not resulting from a collision, you must have “comprehensive” coverage on at least one vehicle covered by your personal auto policy. The key point: If your personal auto policy excludes the coverage type that damages the rental car—and you reject or violate the damage waiver—you will become personally responsible for paying all costs related to the damaged rental car out of your own pocket! In contrast, the damage waiver usually offered at the rental counter will cover the damaged rental car regardless of what’s covered by your personal auto policy.

Limitation in Your Personal Auto Policy

What else could you possibly owe the rental company following an event or crash? These include administrative fees and the depreciated value of the vehicle after repairs—neither expense is covered by your personal auto policy. In addition, most personal auto policies only pay up to the actual cash value (ACV) of the damaged vehicle. If the contract requires the damaged rental’s replacement, the ACV payout may not be sufficient to cover the entire expense.

Again, in contrast, the damage waiver will cover all such expenses.

Also, the rental contract likely will require you to pay the rental company’s “loss of use.” These are expenses they incur resulting from the inability to earn income from the damaged rental. This cost could be hundreds of dollars or more. Some personal auto policies will pay a limited amount for this expense (such as $20 per day or $600 total). Others will not cover it at all.

In contrast, the damage waiver will pay the full cost of the rental company’s loss of use.

No Claim Necessary

If something happens to the rental car, purchasing the damage waiver gives the rental agency management of the process. This will allow you to avoid filing a claim and possibly help keep the cost of your insurance from going up. It also will keep your deductible in your pocket.

Limitations in the Damage Waiver

Don’t forget that the rental car company’s damage waiver is a contract. It will include a list of restrictions that, if violated, may terminate the waiver and leave you personally responsible for paying the costs associated with the damaged rental car. Examples of such restrictions may include:

•             Damage to rental while driven by someone not specifically named on the contract.

•             Damage to rental while driven on unpaved roads.

•             Damage to rental while it’s being occupied by more passengers than available seatbelts.

•             Damage that occurs while pushing or towing.

This list is only a sample; the typical damage waiver may include additional restrictions.

Moreover, the car rental company’s loss damage waiver covers “diminished value,” the economic reduction in value of a repaired auto due to it having been damaged. Almost all auto policies and many credit card coverages exclude diminished value. What’s the impact to you? If you don’t take the damage waiver, you could get hit with a diminished value claim of $1,500 or more, depending on your type of damaged rental car.

Damage Waiver Covers Vehicle Damage Only

Perhaps the most important fact to remember is that the damage waiver only applies to damage to the rented vehicle. It is not a substitute for liability, medical payments, uninsured motorist, personal injury protection, and any other personal auto insurance coverage.

Other Products Offered by Rental Company 

In addition to the damage waiver, most rental car companies offer a few optional insurance-type products. For example, some may offer a liability enhancement that gives you the option to increase the liability limits you already carry on your personal auto insurance policy. Depending on your available auto liability insurance, this option may be worth consideration.

Others may offer options such as accidental death, trip cancellation, or damaged luggage insurance during the rental period. Such options vary by company and may provide insurance dollars you cannot get elsewhere. However, they should not be purchased without first reviewing your current home, health and auto insurance policies as there may be duplication.

Conclusion

In light of the information above, you should seriously consider—and probably buy—the damage waiver from the rental car company. Deciding whether to purchase other products from the rental firm, however, depends largely on the insurance already available to you from other sources. For assistance in determining coverage you already have and comparing it to the rental company’s options, call your Baldwin / Welsh & Parker Trusted Choice® independent insurance agent today.

Business Travel Note: When you rent a car on a business trip, that’s an entirely different set of decisions, so again please talk with your agent.

Potholes and poor road conditions aren’t just an inconvenience, they are an expensive and dangerous result of harsh winters. Winter wrecks havoc on our roadways. The cycle of freezing and thawing, and snow, sleet, and rain, bring Springtime potholes that can do significant damage to your car. Severe potholes have led to accidents which may impact your insurance rates, as premiums are determined by past claims, accidents and driving violations. Here are important tips to keep in mind. 

Make sure you contact one of our Baldwin / Welsh & Parker Insurance Agents to make sure you have the right amount of coverage.

The Massachusetts Department of Transportation has repaired more than 1,300 potholes this winter, including 210 on the MassPike from Springfield to Weston in the last two months, and now the agency is asking the public to report more of these pavement craters.

MassDOT has expanded its online and telephone pothole information system to all areas of the state.

Potholes can be reported through MassDOT's Pothole Hotline number at 857-368-6999.  Potholes can also be reported to MassDOT by calling 857-DOT-INFO (857-368-4636) or 877-MA-DOT-GOV (877-623-6846) or by contacting MassDOT online at http://www.massdot.state.ma.us/ContactUs.aspx#Contact.

Pothole Driving Tips

1. Properly inflated tires hold up better against potholes than tires that have too much or too little air.
2. If you can’t avoid a pothole, slow down before you hit it. But don’t brake directly over a pothole, which can actually cause more damage.
3. When driving over the pothole, hold the steering wheel firmly to avoid losing control.
4. Use caution when driving over a puddle of water because it might be a pothole in hiding.
5. Report potholes to MassDOT.  

And, if you have hit a pothole and notice any of these problems, take your car to a repair facility to have it checked for damage by a professional.

Report Potential Damage  

• Bulges or blisters on the tire sidewalls.
• Dents in the wheel rims.
• Undercarriage damage, including fluid leaks and wear that could lead to rust.
• Odd noises coming from the exhaust system due to dents or punctures.
• The car pulling toward the left or right, instead of going straight, which could indicate an alignment problem.
• Uneven tire wear, which could indicate an alignment problem.

While waiting for your vehicle replacement part/s, you may choose to rent a car if one is not available from your dealership. Here are the most frequently asked questions and answers about your insurance coverage while renting a replacement vehicle.

Q: If I am involved in an accident with the rental car would any loss of use or administrative fees be covered under the collision or comprehensive coverage?

A: Loss of Use and admin fees are not covered under an Auto Policy. The insured can check with their carrier to see if they may have coverage through an enhancement endorsement.  Loss of Use is charged by the Rental Company. If there is an accident with the Rental Car and the car is being repaired, the Rental Company can charge “Loss of Use” for the amount of time that vehicle is not available to be rented. Loss of Use is charged regardless of who’s at fault for the accident.