Automobile Insurance Comparison

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AutomobileInsurance Comparison:

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Automobileinsurance in the US covers the financial risk liability and any lossthe owner of a vehicle may incur in an occurrence of a collisioninvolving their vehicle. According to Article IV of the United StatesConstitution, in some states, the vehicle owner may be required tocarry some minimum level of liability insurance. While in Mississippior New Hampshire, one does not require vehicle owners to carry carinsurance but the car owners can post cash bonds (Bronson &ampCaitlin, 2015). The motor vehicle owner provides an insurance card ofthe insurance company for an exclusive coverage in case of a trafficcollision.

Questionone

Bodilyinjury insurance covers long term and short time costs related toinjuries of passengers, bystanders, pedestrians and anybody who maybe injured in the occurrence of a collision. It covers the medicalexpenses including emergency care associated with the accident. Italso includes all follow-up legal fees in case of any lawsuit filedagainst the owner of the vehicle. The insurance compensates theinjured in the event of any injury that may interfere with theirincome including injuries that reduces their ability to work and theperiod they take to recover and get back to work (Dionne &amp Wang,2013). Although it was challenging to quantify the cost of pain andsuffering brought about by accident, the injured may demandcompensation for pain and emotional discomfort rising from theinjuries. In the occurrence of death incident, the insurance coversthe funeral costs.

Questiontwo

Thecoverage including bodily injury liability may be split into maximumpayment per person and maximum amount per accident separated byslashes. For example, in the case of 25/50, 50 /100, 100/300 and250/500 would imply that if the company finds the driver liable theycan only be able to pay up to a maximum of $25. For one person theycan pay a maximum of $50 for people injured, a maximum of $50 for oneperson and a maximum of 100 for people hurt. A high of $ 100 for oneperson and a maximum of 300 for the people injured, a maximum of 250for one person and a maximum of 500 for all injured personsrespectively. In the case of a combined single limit, the propertyliability coverage and bodily injured coverage are combined. Forinstance, in a 300 only limit means that the insurance pays $300 forboth the property damage and bodily injury while $500 the only limitmeans the insurance pays $500 for both property damage and personalinjury.

Questionthree

Incrementalspousal obligatory insurance protects bodily liability of a spouseinsured in the event of injury or death to his or her spouse. This isincorporated in the bodily injury liability limits and does notincrease the amounts for the bodily injury liability. The additionalpremium for added spousal liability coverage is customarily about 5%of the physical injury premium. This covers both non-economic andeconomic loss like pain and suffering and it is cheaper, thus,worthwhile.

Questionfour &amp five

PersonalInjuries Protection insures for lost wages or injuries resulting froman accident. Some states like Texas require that every insurancecompany offer PIP, but a customer is allowed to reject it if theyfeel they do not need it. Additional Personal Injury Protection inmost companies’ costs between $50,000- $75,000 and the otherpersonal injury protection costs slightly above the PIP.

Questionsix, seven &amp eight

Comprehensivecoverage provides compensation for cars damaged by incidences otherthan collisions including vandalism, fire or weather. Some companiesinclude occurrences that are beyond human control ‘Acts of God’like floods, tornados, hail storm and hurricanes in comprehensivecoverage (Dionne &amp Wang 2013). On the other hand, collisioncoverage covers vehicles involved in accidents. It provides paymentsof the cash value of the car if totally damaged and can’t berepaired or repairs the damaged vehicle. Collision cover is optionalhowever if you take a car loan, the lender prefers carrying anaccident cover until the car is paid off. Loss Damage Waiver is aterm used by rental companies in place of collision coverage.Collision costs differ from one state to another, and it depends onthe company but for $100,000/$300,000 a customer pays between $150and $200 in most states. Deductible are the expenses that the insuredwill have to incur before the insurer pays the costs. Insurancepayments are lower when high deductibles are involved.

Questionnine

EmergencyRoad Service coverage cover the expenses incurred when your carbreaks on the road. This problem may occur due to dead batteries,blown-out tires, engine failure or empty gas tank. The limits forthis coverage are small as it is meant for emergency situations.However, these limits vary from company to company and therefore onemust consult with the insurance company before taking the cover. Thecosts depend on the distance covered by the corporation to therepairing point although some companies may repair the car on thespot with their experts. The cost is minimal and may range from$2.5-$10 (Cusimano &amp Roberts, 2015).

Questionten

Carrental covers all the costs of renting a replacement car after thecollision so as not to interrupt your day to day activities beforeyou are compensated. Travel expenses coverage pays for lodging, mealsand transportation to the available limit in case your car isdisabled resulting from a collision loss occurring more than acertain distance from home depending on the company stipulations. Thecost is determined by the policy taken for example at Amica insuranceif your policy states $30 a day and $800 per accident it means thatthe company will pay $30 per day until you reach $800.

Questioneleven

Underinsuredor Uninsured car owner coverage pays for damages when one is injuredin an accident caused by a person who is not insured or may be havinginsufficient liability. The company pays the medical bills andsubrogates from the aggrieved party. Hit and run case where anindividual flees the scene of the accident leaving a lack of evidenceto trace him is also considered uninsured. It also covers a personwho has been hit by a stolen vehicle since a stolen vehicle is deemedto be uninsured (Cusimano &amp Roberts, 2015). It protects yourfamily in case the members are involved in an uninsured orunderinsured vehicle accident. It covers all the household of thepolicyholder including relatives living in the household. Thiscoverage is hidden by brokers when selling insurance policies becauseit is vital and therefore not many may have heard about it. It isadvisable to have more coverage on SUM as compared to liabilitycoverage because it is almost sure but the limits should be the same.

Questiontwelve

Differentinsurance companies offer different discounts as shown by the examplebelow

Business/type of discount

Liberty Insurance

State Farm Insurance

Amica Insurance

Student away at school

22%

22%

Good student

22%

20%

5-10%

Car has anti-theft device

25%

23%

5-20%

Car has seatbelts/airbags

20%

21%

19-29%

Bundling home insurance with car

9%

7%

15%

Multiple cars on one policy

5%

7%

17%

Car has anti-lock brakes

7%

6%

5%

Questionthirteen

Thefollowing table shows insurance coverage offered by three companiesand their costs

Business/Liability

State Farm

Liberty

Amico

Bodily injury 100,000/300,000 with supplemental spousal

$ 174.03

$178.90

$185.15

Personal injury protection

$81.80

$85.62

89.77

Additional personal injury protection

$12.66

$8.10

$15.56

500 deductible comprehensive

$83.10

$87.45

$85.77

500 deductive collision

$117.16

$121.56

$131.96

Emergency Road Service

$2.10

$2.50

$2.75

Car Rental &amp Travel Expenses $20/$40

$8.84

$11.33

$10.55

Uninsured and Underinsured Motorist Bodily Injury $100,000/$300,000

$33.60

$33.20

$38.68

Law enforcement fee

$5.00

$5.00

$5.00

Total

$478.29

$533.66

$565.19

Theinformation above was provided by the following companyrepresentatives through phone

  1. Marylyn Johnson- Amico Insurance Company (auto, home, marine and personal umbrella): 800-242-6422

  2. Marvin Clark- State farm Insurance Company (Insurance Payments): 800-440-0998

  3. Fulton Emerson- Liberty Insurance Company (Auto and Home Insurance representative): 1-888-398-8924

Questionfourteen

GAPinsurance also known as lease policy provides protection forconsumers when there is a gap between the amount of money owed to theleasing company and the actual value of the vehicle. The GAPinsurance may not pay off the full loan benefits if There was unpaiddelinquent due at time of loss, payment deferrals, late fees andrefinancing of car loan after purchasing the policy.

Questionfifteen

Bycomparing the above insurance companies, it is clear that state Farmis the cheapest among them followed by Liberty and lastly Amico.Although some of its discounts are lower compared to the other twocompanies, it also offers the best discounts averagely among thethree. I would, therefore, recommend for State Farm cover as it ischeaper ($478.29) as compared to Liberty and Amico with ($533.66) and($565.19) respectively.

References

Bronson,Caitlin (2015). “The Ten Largest P/C Commercial and Personal LinersInsurers.” InsuranceBusiness America

FDionne, KC Wang (2013). “Does Insurance Fraud In Automobile TheftInsurance Fluctuate With The Business Cycle?” Journalof Risk and Uncertainty

GSCusimano, ML Roberts (2015). “Uninsured and Underinsured MotoristCoverage.” AlabamaTort Law

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