The average person is involved in a car accident every 7 years.  It is important to know the proper steps to both expedite passing of your unpleasant experience and minimize the financial impact. It is best to have a general idea of what to do both at the scene of the accident and in the aftermath. 

At the Accident Scene:

• Stop immediately but do not obstruct traffic. Be careful to not expose yourself to further injury.
• ASK if the other person is okay. (It is NOT a good idea to say “I’m sorry.” It CAN be perceived as an admission of fault.)
• Assist any injured person—call 911.
• Record the names, phone numbers, addresses of other drivers, witnesses, and injured persons EVEN IF THE POLICE OFFICER IS DOING THE SAME. This information is not always properly transferred to a police report and may become vital later.
• Record the make, model, and license numbers of all cars involved.
• Make a rough drawing of the accident scene while your mind is fresh. Clearly show positions of cars and other details. Take pictures with your phone’s camera to capture the accident scene, the vehicle damage, the location, etc.
• Resist the urge to wash your car if you were in a collision with an animal until a claims adjuster has been able to examine it. The animal matter that remains on your car could be the difference between an “at fault collision” accident on your driving record or a less severe “comprehensive claim.”
• Remain calm, courteous, truthful, and consistent in your description of the accident.
   

After the Accident:

• Call your AGENT for advice, not your insurance carrier.
• Do not accept well meaning advice from the police to “call your insurance carrier” if you are NOT at fault.  (Claims subrogation sounds convenient, but it costs you money in higher insurance premiums later).
• Consider your deductible and the impact on your insurance premium before you determine if you should report the claim to your insurance carrier.
• Do not immediately contact an attorney. If the insurance claim is simple, uncomplicated, and straightforward based on the police report and witness statements, an attorney’s involvement will significantly delay the processing of your insurance claim.

The Bottom Line:

• Your insurance agent is your best resource. He or she will have contacts to the best repair shops and will know your insurance carrier’s process for filing a claim as well as if that is in your best interest.
• Treat your attending officer with utmost respect, but realize that he or she (while with best intentions and very professional) is not a licensed insurance agent. You may be advised to turn things in to your insurance for convenience or to give a tow truck driver your insurance information.  The officer may also insist on exchanging your insurance information with the other driver on the police report. If you know that the accident is not your fault, politely request that this “standard practice” be waived so that no false claims are reported to your insurance company.
   

             Be the FIRST to get your statement in to the insurance company. If the other driver is at fault, call their carrier directly and tell your story. Offer the supporting evidence you collected to the claims adjuster. If you were at fault, (after calling your agent) call your carrier’s claims department immediately and report the accident.

 ​      As I sit on my front porch tonight, I find myself reflecting on this summer day exactly one year ago when the state I proudly call home was pelted several days and nights in a row with thunderstorms and heavy rainfall, resulting in some of the worst flooding West Virginia has ever seen. Ironically, it’s raining tonight and the forecast for the week ahead calls for more rain. I can’t help but wonder how many of my neighbors may also be praying for sunny days and hoping for respite this time.

     On the eve of the June, 2016 floods anniversary, I thought it fitting to highlight the protection of flood insurance and how the coverage is often misunderstood. My office received many calls both during and after the flooding last year. We counseled, we worked hard, we prayed, we cried, we cleaned up our community, and along with our fellow mountaineers we came together.  During this time it became painfully apparent to us that many folks believed they had the coverages they needed when in fact they did not.  In an effort to quickly share pertinent information, I made a brief Facebook post. It was shared several times and the information was apparently so sought after that I decided to expound upon it here.

     Flood insurance is regulated by FEMA. According to FEMA’s website, a flood is simply an excess of water on land that is normally dry. Per the National Flood Insurance program, a flood is (1) “A general and temporary condition of partial or complete inundation of two or more acres of normally dry land area or of two or more properties (at least one of which is your property) from a. overflow of inland or tidal waters; b. unusual and rapid accumulation or runoff of surface waters from any source; or c. mudflow*. (2) collapse or subsidence of land along the shore of a lake or similar body of water as a result of erosion or undermining caused by waves or currents of water exceeding anticipated cyclical levels that result in a flood as defined in A.1.a. above.”
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     A few facts about flood insurance you should know are:
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1. Often, flood insurance policies come with a 30 day waiting period. This is waived if a lender is requiring the coverage during the initial purchase or refinancing of a loan.
2. Flood insurance CAN cover contents, but that coverage must be purchased separately and the limit of coverage must be selected. *Side note: A lender does not require you to purchase contents coverage, only coverage for what is financed—typically just the structure. If contents coverage is needed, you must add this with your agent! *
3. Flood insurance is not a valued policy. “A valued policy pays the limit of liability in the event of a total loss. For example: Your home is totally destroyed by a fire and it costs $150,000 to rebuild it. If your homeowners insurance policy is a valued policy with a $200,000 limit of liability on the building, you would receive $200,000. Flood insurance pays the replacement cost or ACV (actual cash value) of damages, up to the policy limit.” (www.FEMA.gov).
4. Coverage is limited in the lowest elevated floor and in basements. Therefore, if you live in a flood zone, you must be extremely careful what you choose to store in that part of your house.
5. Personal property is usually covered at actual cash value NOT replacement cost on a flood insurance policy. Consider this strongly when purchasing a home in the flood zone.

 
        Below is a helpful illustration from FEMA on what IS covered by flood insurance and what is NOT.

     As I conclude this post and listen to the steady rainfall, I am reminded of the incredible power of water when it accumulates and accelerates through our West Virginia hills and valleys. I’m also reminded of an even more powerful God who holds each of us in the palm of His hand as we find our rest.  May we all be mindful of our neighbors especially tonight and of the community, spirit, and passion we share as West Virginians.

1) Red cars cost more to insure than other cars.

        If you prefer red cars and pay too much for auto insurance, the color of your ride is not to blame. Your rate is determined by a number of factors such as the cost to repair your car, your zip code (likelihood of theft or vandalism), your driving history, and your personal credit standing.

2) Flood damage is covered by my homeowners insurance policy.

        We will cover this in greater detail in our next blog about flood insurance. For now, I will summarize briefly by saying that flood insurance is always a separate insurance policy and is regulated by FEMA.  Flood damage is not covered by homeowners insurance. However, most other water damage is covered. Water leaking from pipes is covered, and water backups of sewers and drains coverage can be added to most homeowners policies for very little additional premium.

3) My house should be insured for what I paid for it.

        Nope. Your home gains value every year you own it. The price you paid for it is now (most likely) less than its current value. If your home were damaged beyond repair, you would either a) rebuild it or b) purchase a replacement home. Therefore, insuring your home for its replacement cost (more than what you paid for it) is crucial. This is especially relevant in the event of a partial loss (a smaller claim). Would you want your insurance company to pay only part of the cost for a new roof if yours were destroyed? I didn't think so. More on this topic in an upcoming blog entry titled "The Coinsurance Clause--How to WIN at Insurance Math."

4) No other insurance carrier can beat my rates because I've been with the same company since I was 16... (Also my dad and grandpa had them, that's who everyone in my world has, and I'm paying a fair price for my insurance, etc)

      So, you get the drift.... My favorite response to this line of thinking comes from my father--a seasoned independent insurance agency owner. "What are you waiting on, Sir/Ma'am, a gold watch?!"  It's true, price is not everything. However, when we sometimes manage to save folks half or more of their insurance premiums, they usually wish they'd come around sooner. The value of an independent agency is that they can shop your insurance multiple times with several top insurance carriers rather than just the ONE on a sign out in front of their office. That gives an independent agent a much higher chance of saving you money while serving your insurance needs in the future.

5) My home-based business / my side business is covered by my homeowners or renters insurance.

      Do you make soaps, raise chickens for eggs, sell crafts, provide remote tech support, create your own natural living products, or work on cars? I love seeing so many new and hopeful entrepreneurs start up their home-based business with plans to go big someday and get a storefront. Most of them assume that THEN would be the ideal point to obtain business insurance. However, did you know that the standard liability portion of your homeowners insurance only covers you in your PERSONAL pursuits, NOT in commercial or business ventures?  Some classes of home based businesses can be added to your homeowners policy by asking your insurance agent to endorse the policy to include business pursuits.  Some business ventures require separate commercial insurance. Either way, make sure you are covered legally by setting up a separate LLC or corporation, and of course with proper insurance coverage.

6) My auto insurance rates won’t increase if I don’t report an accident.

       There’s partial truth in this statement. If you have a minor fender bender and decide to call your local body shop for a small out-of-pocket repair without calling your insurance company, your insurance is NOT affected. However, if you have a major fender bender, EVEN IF IT IS NOT YOUR FAULT, it is wise to loop your agent in. The other party in the accident could attempt to call your insurance carrier and turn in a false claim. The body shop who is diligently working on repairing your car may call your insurance carrier on your behalf thinking that they are providing you with good customer service… If this is ignored and you do not contest it, you could experience a rate increase for a “not at fault” accident stemming from claims subrogation. It is possible to consult your agent for advice WITHOUT turning in a claim.   

7) “Full coverage” and high limits of liability are the same thing.

     I frequently get requests for a quote and when I ask “What limits of liability are you carrying?” the person replies with “full coverage.” To clarify, I’ll briefly cover two parts of an insurance policy. The first part is physical damage coverage which consists of comprehensive and collision coverage. These two parts of physical damage coverage can have differing deductible amounts and can be purchased separately. Collision coverage provides the insured person with coverage in the event of an at fault accident. Comprehensive coverage provides the insured person with coverage for fire, theft, vandalism, flood, and animal accidents. These two coverages combined constitute “full coverage” for physical damages.
      The second part of an insurance policy for our discussion is the liability limits. In West Virginia, the state requires a minimum of $25,000 in bodily injury coverage per person in an accident, $50,000 maximums per accident, and $25,000 in property damage per accident expressed as 25/50/25. The next higher split limit coverage is 50/100, then 100/300, and 250/500. We will discuss liability limits in detail in a future blog post.  For now, just remember that full coverage and liability limits are separate coverage parts and have no relation to one another.    

8) My jewelry is covered on my homeowners insurance policy.

     Most homeowners insurance policies contain a $5,000 default jewelry coverage for theft from the home or an otherwise covered loss.  If you have jewelry with a combined worth of over $5,000, I recommend that you schedule it on your homeowners insurance policy.  This coverage, called inland marine is very inexpensive and can protect your jewelry anywhere in the world for theft and mysterious disappearance.

9) When I let friends borrow my car, they are responsible if there’s an accident.

      Actually, insurance coverage follows the vehicle not the driver. This means that you as the owner of the car are responsible if that vehicle is involved in an accident. If your friend is unwilling to reimburse you for the damages resulting from an accident while your car was in their custody and control, your only option is to take them to small claims court in a civil suit.  

10)  Personal property inside my car is covered by my auto insurance if it is stolen.
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     Nope—remove your expensive sunglasses, laptops, purses, and jewelry from your vehicle!  Unless you are carrying an “enhanced” policy where your agent has specifically outlined a personal property rider in writing for you, it can be assumed that you do not have coverage for personal property losses under your default auto insurance policy. However, most homeowners insurance policies will cover personal property losses from vehicles after the deductible is met.

      Do you have an insurance question you’d like to see covered in an upcoming blog post? Send me an email at danielle@insurewithellis.com! Let me know your thoughts by commenting below!