What Superlative Would Your Insurance Win?

November 13, 2009

Car insurance may not be all that glamorous, it probably would not win “Most Fun” in the high school yearbook and it may not be the hottest industry on the stage.  When the spotlight hits, though, it is undeniable what a star good insurance coverage can be.  Understanding the ins and outs of insurance can be complex, but it is of utmost importance to keep yourself educated about what your insurance policies are doing for you and how they will perform when you need it most.

Why Is it So Important? Like a good doctor, insurance is in place to heal you when you’ve been broken. It’s there to fix the worst case scenario. The goal of both medicine and insurance is to pick up the pieces and put them back together so that you look the same as you did before the loss occurred. Doctors may mend a broken arm or leg, while insurance fixes a broken car or home. What we must remember is that insurance is an important part of restoring your life, but it can be equally important when you are not the victim in an accident.

Car insurance liability limits are in place to pay for any bodily injury or property damage that you cause (and are found legally liable for) to another person. People often think that because they have insurance, they are covered, plain and simple. The fact is, though, that insurance has LIMITS. If the costs to rectify an accident fall outside of those limits, the victim may have no choice but to sue you for the remainder, causing you complete financial devastation. No bueno.

Want Some Examples?  My friend, [Low Limit] Lisa works for an NFL team and I recently discovered that her car insurance liability limits are shockingly low.  Her limit is 25/50/50: her insurance company will pay up to $25,000 to each person injured, but they will only pay a maximum of $50,000 total per accident (so they’ll only pay a max of $25K to two people) and they will pay a max of $50,000 for damage caused to property.  Let’s play pretend and imagine that she is pulling out of the player parking garage…

  • Lisa hits a player, damaging his $100,000 car and breaking his $10 million running back leg
  • Player sues Lisa for damages in court
  • To fix the car, pay for his medical bills and make up for the wages he is losing while out of work, the court awards $500,000
  • Lisa is now liable for $425,000 out of pocket
  • Superlative: Most Likely to Drive Lisa into Deep Debt for Decades

We may not all work for professional sports teams, but we do interact with people and face risks on a daily basis. This one is a true story:

  • My friend–we’ll call him Crash–was in a car accident last year
  • He was at fault for hitting a Mercedes-Benz operated by a NYPD detective
  • The accident wrecked the Benz, injured the detective’s shoulder, put him through surgery and rehabilitation and kept him out of work for 6 months
  • The court awarded the detective $90,000 in a settlement.
  • Crash’s insurance company paid for an attorney to represent
  • Crash’s liability limit was a Combined Single Limit (as opposed to the split limits of 25/50/50 we saw earlier) of $500,000
  • Superlative: Most Likely to Suffer NO Financial Loss

Another example:

  • A restaurant owner has a teenage son who drives his car into someone’s luxury home
  • Their insurance carries a $100,000 liability limit on property damage 
  • Homeowner sues and court awards $2 million in damages
  • Superlative: Most Likely to Foreclose Their Home and Sell Their Restaurant In Order to Pay the Remaining $1.9 Million

We never expect that we’ll be in such a position, but that is why insurance is so essential: it is our backup plan when the unexpected actually happens. Increasing your liability limits will cost a little more, but it is the smartest, easiest way to truly protect yourself and the life you’ve built in the event that the unthinkable occurs. Think of ways to cut back in other areas of your life–maybe you can put that Starbucks money toward having coverage that wins “Most Likely to Succeed.”

Talk to your insurance agent or call/e-mail us for guidance: 914-598-3004 or jaime@assetsecurityrm.com


NJ Motorists Must Comply w/ New Law or Get Caught on Thin Ice

October 21, 2009

NJ Legislators have passed a law requiring drivers to clear snow and ice from cars or be subject to a fine.

Let me set the scene: It’s the day after a snow storm and you need to head to the market, so you’re shoveling your driveway and digging your car out of the snow.  You clean off the snow and ice that have accumulated atop your vehicle and then you finally hit the road (if you haven’t stopped to take another shower and a nap because all that work got you perspiring and tired!).

You’re on the road now and even though the snow has stopped, you see snow and ice flying at your car from all directions because the cars in front of you failed to clear their cars of the wintery mix. Besides being a nuisance, snow and ice on cars presents a serious safety hazard. In the event that a sheet of ice becomes dislodged from a car, it could find its way to another car’s windshield, causing property damage, an accident or injury.

In an effort to protect drivers from this hazard, a recent New Jersey law requires motorists to make all reasonable efforts to remove ice or snow from vehicle or face a fine.  The lawstates that a police officer may stop a motorist whose vehicle has accumulated ice or snow which may pose a threat to persons or property.  The driver will be subject to a fine of not less than $25 or more than $75 for each offense, regardless of whether any snow or ice actually dislodged from the motor vehicle.  The law assures “no motor vehicle points or automobile insurance eligibility points shall be assessed for this offense.”

Though you may not live in New Jersey, take it upon yourself to clear your car of snow and ice before driving. The consequences of failing to do so could be much greater than a $75 fine.  If a piece of ice takes flight from your car, you could be held liable for damaging one’s property or causing bodily injury to another.


OH, DEER…

October 6, 2009

The Insurance Information Institute (III) reported that deer-to-vehicle collisions are on the rise, spiking 18.3% over the last five years. The average property damage cost of these incidents was $3,050 and if your policy does not cover deer collision, guess who’s paying. Unless you can harangue that deer to write you a check for a cool $3,000, the money will be coming out of your pocket.

Here’s How it Works:

  • All states require motorists to have liability insurance. This means that if you are responsible for causing an accident, your insurance company will pay for any bodily injury or property damage to others…
  • …But there is no mandate that you must insure against damage to your car.  Even the most cautious and conscientious driver can be involved in an accident, though, so you may consider securing collision and comprehensive coverage.  
  • Collision coverage pays for loss due to collision with another vehicle or object (like a tree that came out of nowhere!). It also covers loss due to upset (if your car does a triple lutz or a back flip).
  • Comprehensive coverage provides coverage for any direct damage to your vehicle other than collision. This includes: fire, theft, explosion, earthquake, windstorm, missiles (whoa), falling objects, hail or water, flood, vandalism, riot and civil commotion, glass breakage, contact with birds or animals (oh deer!)

Contact us for a complimentary policy review to ensure that your coverage protects your car adequately: 914-598-3004 or jaime@assetsecurityrm.com

Take Preventative Measures:

The III offers these defensive driving tips to avoid hitting a deer:

  • Be especially attentive from sunset to midnight and during the hours shortly before and after sunrise. These are the highest risk times for deer-vehicle collisions.
  • Drive with caution when moving through deer-crossing zones, in areas known to have a large deer population and in areas where roads divide agricultural fields from forestland. Deer seldom run alone. If you see one deer, others may be nearby.
  • When driving at night, use high beam headlights when there is no oncoming traffic. The high beams will better illuminate the eyes of deer on or near the roadway.
  • Slow down and blow your horn with one long blast to frighten the deer away.
  • Brake firmly when you notice a deer in or near your path, but stay in your lane. Many serious crashes occur when drivers swerve to avoid a deer and hit another vehicle or lose control of their cars.
  • Always wear your seat belt. Most people injured in car/deer crashes were not wearing their seat belt.
  • Do not rely on devices such as deer whistles, deer fences and reflectors to deter deer. These devices have not been proven to reduce deer-vehicle collisions.

If your vehicle strikes a deer, get your car off the road, if possible, and call the police.

Happy and safe driving!