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Why are insurance claim checks payable to you and your bank or lender?

Claim Example: During the 50+ mile per hour winds, let’s picture your roof having wind damage that resulted in $25,000 in damage.  You go through the claims process and get it settled.  You get your insurance claim check from the company.  Then, when you look at the check, you see it is payable to you and your bank.

You may be looking at the claims check and wondering why your banks name on it.  

When you bought your home, you probably had to get a mortgage to help pay for the home.  This gives the mortgage company a significant financial interest in the well being of your home and property.  To protect their financial interest, the mortgage company is the listed as lienholder and loss payee on your home insurance policy.  Therefore, any checks paid out for claims from the insurance company will be payable to both the bank and you.

Why does the bank want to be listed on every claims check?

As stated above, the bank has a significant financial interest in your home.  Let’s use the wind damaged roof example above.  The bank wants to make sure that the repairs to the home will be made.  The bank does not want you to be tempted to use the $25,000 for anything else besides repairing the roof.

How do you get access to the needed money with the banks name on the check?

Depending on the size of the check and amount of damage, accessing the funds can be handled in different ways.  No matter which way it is handled, the bank or mortgage holder will have to sign off on the check.  This could be done in person if the bank has local branches.  If in person is not an option, you will need to contact your back to see what would be the best method.   They may request it be done by mail.

For smaller claims, the bank may be willing to just sign off on the check and trust that you will fix the issues.

For larger claims, they may want you to sign over the check for them to deposit into an escrow account.  From there, as the repair process moves along, they will authorize the release of funds to the contractor based on a set payment schedule.  This would include the initial deposit to get the job started.  Then subsequent payments during the scope of the project.  And ending with the final payment when the repairs are completed.  The bank may require inspections along the way and at the end to verify that the repairs are done as stated.

Contact Huff Insurance with any questions

If you have any questions on your claims check, please give us a call at 410-647-1111.

Huff Insurance is a full service independent insurance agent licensed to do business in MD, PA, VA, DE, WV and DC

 

**Claims procedures vary by state and by company.  Please check with your insurance company to see what their processes are for handling claims checks.

 

 

 

Are you putting property into a Trust?

Dying is complicated.  Not necessarily for the deceased, but for those left behind.  To ease the burden many are deciding to set up a trust. This will allow probate to be easier upon their death.

Many lawyers are recommending a trust, but they are forgetting about the insurance implications of this recommendation.

So, if you are funding a trust with property, like your home, you need to contact your insurance agent.   You will need to endorse the property insurance policy

Let me explain some of the roles of setting up a trust, in a non-legal way.

• Trust:  A legal process which creates a separate legal entity (legal person) that is a fiduciary arrangement allowing a third part, a trustee, to hold or manage the assets on behalf of a beneficiary or beneficiaries.  Trusts can be arranged in many ways.  They can specify exactly how and when the assets pass to the beneficiaries.
• Trustee:  The legal owner of the property responsible for managing the assets in the trust to the satisfaction of and according to the wishes of the “grantor” as outlined in the trust document. When the “grantor” is also the trustee, successor trustees are named to step in after death or incapacitation.
• “Grantor”:  the person who conveys or transfers title in real property (selling or giving) to another and sets the terms of the trust. Other names could be “trustor” or “settlor.”
• Beneficiary:  The person(s) who derives the benefit of the assets of the trust. Also know as the cestui que trust, this is the beneficial or equitable owner of the property- though not the legal owner.  The beneficiary is said to have the “use” of the property and can appeal to the court for an accounting or replacement of the trustee to ensure proper use of the property.

Since these new roles arise, the homeowner’s insurance policy needs to be changed to account for the various positions.

Will the trust own any vehicles or motorcycles or boats? 

Then the auto insurance, motorcycle insurance and boat insurance policies will all require endorsements as well.

If there is a personal umbrella insurance policy,  that will also require a change.

There are several endorsements available and some carriers even offer their own forms to provide coverage.

Many attorneys and financial planners are not advising their clients of the changes needed to be made to the insurance coverage.  So it might be several years or only at claim time that this is discovered.    Understanding that placing assets into a trust means that you need to have a conversation with your insurance agent is imperative.

If you are making these types of changes then please let us know.

How can Huff Insurance help?

As an independent agent, we have have worked many clients who have put property into a trust.   Our experienced team will work to make sure your insurance policies are protecting you and your trust.

 

I want Full Coverage!

“Full coverage is an insurance term used by many, but understood by few.

I hear it every day, when speaking of automobile insurance, the customer says I want full coverage.

But when I ask them what that means to them, they have no idea.  Or they think that it means that everything is covered  I can tell you up front, that there is not an insurance policy in the world that will cover everything.

Do you know what it means to have full coverage?

Do you see the term full coverage anywhere in your insurance policy?  No.  That is because there it does not really exist in the insurance world.   Yet, everyone uses this term as a universal term.

In auto insurance. when people say full coverage it implies that they are looking for both liability insurance coverage and physical damage coverage to cover their vehicle.

Full coverage is generally used by the lender on the vehicle to indicate that they are requiring physical damage coverage (comprehensive and collision coverage) for the vehicle that have a lien.

The problem is that there is no such thing as full coverage.  And different interpretations of the full coverage can lead to gaps and unpaid losses.

I have seen on popular carriers’ websites that they define full coverage as minimum liability coverage with maximum deductibles for comprehensive and collision coverage.

Does that really sound like full coverage?

Minimum liability coverage is not sufficient to cover even minimal accidents.  In Maryland, the minimum liability coverage is $30,000 per person/$60,000 per accident and $15,000 property damage.  How many vehicles are on the road are worth less than $15,000.

So, what happens if the claim exceeds your liability coverage?

You could be held personally responsible. And you may have to sell off assets such as your home, or other assets to pay the claim.

What happens if you do not have assets?  They could garnish your wages, and a portion of your salary will go to the other party with each paycheck.

Can you afford to give up 30% of your wages to someone else?

Then if we look at part 2 of the definition of full coverage, maximum deductibles for comprehensive or collision coverage.

Could you afford to pay $5000 or $10000 if your vehicle were stolen or damaged in an accident?  Most likely not, at that point does it even make sense to have coverage?

So even though, you may have full coverage if the deductibles are too high that you could not afford to pay them if your vehicle is damaged how are you going to get your vehicle repaired.  Even though the insurance company would pay the difference between the cost of the repair and the deductible, the body shop is not going to allow you to pick up your vehicle till the deductible is paid.

How long would it take you to come up with $10,000 deductible to pay your deductible?

Notice, that there is nothing in this common definition of full coverage, about towing or rental reimbursement.

So, what happens if you need to rent a car at $40 a day while your vehicle is being repaired from an accident.  Your full coverage may not be providing this protection.

Do you have the right coverage for your needs?

Do not let yourself believe that just because someone told you that you have full coverage, that you have the coverage that you need for your vehicle.

Make sure that you are reviewing your liability coverage to be sure that that coverage limit is adequate to handle claims.  You do not want to be in a position where you have to sell your assets or have your wages garnished.

Make sure that the deductibles chosen for comprehensive and collision are reasonable and that you can afford them in the event of a claim.

Confirm if towing and rental reimbursement are included in your coverage.

Do not let yourself believe that your full coverage is all the protection you need.

Contact us here at Huff Insurance to discuss what coverage options you need to protect yourself in the event of an accident.

 

Why do insurance rates seem to increase every year?

As an insurance I cannot tell you how many times that I am asked why insurance rates go up.

Over the years, this question just wears down insurance agents.

Every week I get gas.  Every week I pay a different amount. But I never go in and ask the attendant why gas is 10 cents higher this week.

Every year the cost I pay for most things goes up, I just expect it!   

I don’t go in the grocery store and ask the clerk why bread is more than I paid last year.

But, for some reason people always want an exact answer as to why their rates increase.

So, what many agents have as their standard lines are:

• It was a general rate increase, all the companies are taking them.
• Or, they say I do not know, we don’t control the rates they are set by the insurance company and approved by the insurance commissioner.

As a consumer these responses don’t sit well. And they don’t sit well with me either.

You want to know what specifically cause YOUR insurance rate to increase and why did they choose you to have to pay more!

Well, I will try to give you some insight into insurance and why your rates increase.

The first thing is, there is a possibility that you did something to cause an increase in your insurance rates.

One of the following things that you may have done could cause your insurance rates to increase.  Did you:

• Move?
• Add a new car?
• Have a claim/accident?
• Have a ticket for a moving violation?
• Pay you premium late to the  insurance company in the previous year?

One thing you did was you got a year older, which may have put you in a different rating tier.

Your home and vehicles have also have gotten a year older.  So you may be losing the new home or new vehicle discounts that were on the policy.

Some carriers give you a new client discount when they write your policy,  This discount usually goes off over the first 2-5 years of the policy.  Many companies will add a customer loyalty credit to help off set this, but not all the companies do.

There are some things that you can not control that affects insurance rates.

The cost of claims is always on the rise.  Things such as medical costs and costs to repair vehicles.

For auto insurance, the cost of parts has increased dramatically over the past 15 -20 years.  In the past, I had a small fender bender and it cost $30 to repair the other guy’s head light. last year, jerry had to replace a headlight and it cost $1,100. The headlights of today are mostly LED and have to be replaced as one unit.  There is no more replacing a cover or even a light bulb.

For homeowners insurance, labor cost and the cost of construction products are always increasing.  So the cost to replace your roof or siding is higher now than it was a year ago.

On most property policies, the value of the building and contents will increase each year due to amount of inflation in the construction industry.

So, when the dwelling value increases on your homeowners insurance, that automatically increases the coverage amount of your other structures, contents, and loss of use coverages.  Those limits are a percentage of the dwelling limit.  So increasing the dwelling limit by $20,000 my actually increase your total coverage by $40,000.

Sometimes,  the insurance carrier does increase their rates to remain viable.   Just like all businesses, the carrier’s cost to do business increases annually.

Can insurance companies increase their rates for no reason?

Insurance is a heavily regulated industry so the carriers can not just increase rates because they feel like it.  All rate increases must be approved by the insurance commissioner of each state and the rates must be statistically proven before they can be approved.

There are now hundreds of factors that go into calculating insurance rates.   Sometimes, the adjustment of one factor can amend the tier of the policy.   So, legitimately there are times when agents really do not know what exactly caused your premium to increase.

Here is another blog we wrote on the subject of increasing insurance rates:

Why are insurance rates increasing so much?

What can Huff Insurance do for you?

Huff Insurance is an independent agency.  We work with over 12 insurance carriers.

We have our pulse on the marketplace. We are able to identify when your insurance rate increase is consistent with the marketplace and when it is not.

Reviewing your insurance policy is the first place to start.

Rating factors such as education, occupation, credit score, updates to your home or building, payment history could all affect pricing.  We will also review your policies to make sure that you are aware of all available discounts.

By reviewing the account we can ensure that your policies are properly rated and that you are maximizing the discounts that are available with the current carrier.

Should you shop your insurance every year?

Although we have options, it is not always in your best interest to shop your insurance every year.

There are discounts and reward perks such as claims free cash back, discounts, or first accident forgiveness that you may lose or not earn by moving each year.

What is important is to understand the value of the policy that you have and the assurance that you are making the best decision for your family or business.

None of us, including insurance agents, want to pay more for our insurance.

But, we understand that things will go up every year and we just want to know the value of what we are paying for.

Carriers are coming up with new benefits and discounts each year so reviewing them to make sure that you are taking advantage of them is the best way to control your insurance costs.   Things like telematics, or renovations discounts, or discounts for sump pump backup or water flow sensors are relatively new, but another way for you to help control your cost.

So reach out to Huff Insurance to review your insurance plan.  You can call one of our team members at 410-647-1111.

 

DO NOT mail your insurance payments!

You should still make your insurance payments.  We just do not recommend making the payments via the mail.

And we STRONGLY advise against using your bank’s online bill pay system to make your payments.  So much so, that Nancy made a special Blog and Video here:

Online Bill Pay Can Cause Issues With Your Insurance Policies

Why not mail your insurance payments?

The simple answer to this question is that mail delays can cause your insurance policies to get cancelled.

The last thing you need to happen is to have your insurance policies get cancelled due to a mail delay.  And to compound the issue, you may not even know it has been cancelled for several weeks, also due to the mail delays.  Companies are required to notify you of your cancellations by mail.  So it may be several weeks after the cancellation date before you even realize that your insurance has been cancelled.

If not  by mail, then how should you make your payments?

There are several insurance payment options that most companies offer other than mail.  Any one of these options will allow the company to receive your payment without dealing with the mail delays.

Some payment options are as follows:

• Online payment direct with insurance company
• Payment through company mobile app
• Call insurance company directly to make a payment (most have this option 24/7, although some have extended business hours)
• Automatic EFT with the insurance company.  This way, the company can get your payment from your account on the due date of the payment.  And some companies offer a discount for using this payment method!
• Call Huff Insurance

These are things that you can do to avoid your insurance policies from cancelling due to the issue with mail delays with your insurance payment.  The last thing you want to happen is to unknowingly have your Auto Insurance, Home Insurance or Business Insurance cancel.

Huff insurance is here to help you with your insurance protection needs.  Please feel free to give us a call at 410-647-1111 if you have any concerns or questions on your insurance coverage.

Will your auto loan or lease be paid off if your car is totaled in an accident?

You have a loan on your brand-new car, if you total your vehicle is the insurance company required to pay off your loan?  If you do not have GAP insurance, then no, the insurance company is not required to pay off your loan.  The insurance company is only required to pay you the actual cash value of the vehicle at the time of loss.

Does that mean that you could still owe money to the loan company even though my vehicle is totaled?

Potentially, yes!  Especially if you financed the car with no or little money down.  Or, if you rolled a balance from a previous vehicle into the loan for this vehicle.

What can I do to make sure that my loan or lease of the vehicle is paid off if my vehicle is totaled?

You can purchase loan/lease gap coverage.  This endorsement that can be added to your auto insurance policy may be available for new vehicles or vehicles that are only within a few years old.  Each carrier has guidelines of when the coverage is available.

Loan/lease gap insurance coverage endorsement provides coverage to pay off the balance of the loan or lease.   This is done even though the balance on the loan is more than the vehicle is worth at the time of the claim.

There can be limits on how much the insurance company will pay.  Some companies will only pay up to 25% more than the value of the totaled vehicle.  So check with your insurance company to verify their actual coverage.

Can I add loan/lease gap insurance to my vehicle at any time?

No, most carriers only allow a small window of time after you purchase the vehicle to add this coverage.   Usually the coverage needs to be added at the time the vehicle is added or at most 30 days after the vehicle is originally purchased.

Should I purchase the loan/lease gap insurance coverage from the auto dealer or my agent?

For a new car it is generally much more economical to purchase it from the auto insurance company.  Loan lease gap coverage is usually less than $50 a year to add.   When it is added to your loan, we have seen clients paying several hundred dollars for this coverage.

For a used vehicle, I would recommend talking to your agent before purchasing to confirm that the insurance company would even be willing to add the loan lease gap coverage to the policy.  As previously mentioned, on older vehicles there are restrictions on the age of the vehicle that the carriers are willing to add or offer this coverage.

Do I need loan/lease gap coverage if I put down a healthy down payment or had a good trade in?

Well that is your decision.   If you are certain that you will never be upside-down in the loan, where you owe more than the vehicle is worth then you do not have to purchase this coverage.   Loan/lease gap coverage is an optional endorsement and not required to add to the policy.

What do I do if I purchased loan/lease gap coverage from the lender and then find out my agent can add it for much less?

First, act fast! The sooner that you discover this the more likely it will be that you can get it rectified.  Some lenders are willing to remove it and others are not.   The longer you wait to request that they remove the coverage, the less likely it is that they will remove it.

So, do your research before you go to the dealer.  If you know that type of vehicle you are purchasing then discuss with your agent what options would be available. Your agent will let you know if you would be eligible for loan/lease gap coverage and the pricing.    This way you will have a comparison in cost to compare to what the finance company is willing to offer.

Can I purchase the loan or lease gap insurance coverage without having auto coverage with you?

Unfortunately not.   GAP coverage is an endorsement to the personal or commercial auto insurance policy. Therefore, it is not available to be purchased by itself through Huff Insurance.

Call Huff Insurance at 410-647-1111 if you have any questions regarding GAP insurance or any other insurance offering.

**Please note that this blog is for general informational purposes only.  Insurance coverage and offerings varies by state and by company.  To see what options are available to you for GAP insurance , please check with your insurance company.

Can kids get a discount on car insurance for getting good grades? Or is this a myth told by parents?

Is there really a good student discount auto insurance? Or, is this a myth that parents use to encourage their teenagers to get good grades?

My son. Dalton had several friends in high school ask him this question.  They truly believed that they were being told a myth by their parents so they would get good grades in school.

So, Is the good student auto insurance discount a myth?

As a parent myself, I know parents have been known to use mythical characters throughout the year to get their kids to behave.

But I assure you, the good student discount for auto insurance is real!  It is not a myth!

Most auto insurance companies offer a good student discount.    The discount can be up to 20% off the rate for the youthful operator.

Anyone with a young driver knows that those car insurance rates can be high!

So, to be able to save up 20%, could be significant.

What generally qualifies someone as a good student?

Any of the following may qualify the student for the auto insurance discount:

• A 3.0 GPA or higher on a 4.0 scale
• A B+ average
• Honor roll on the most recent report card

Why do the insurance carriers give a discount for good student?

Statistically the insurance companies have been able to determine that students with above average GPAs have fewer accidents.

When students make good grades, they are showing responsibility, maturity and that they are making good decisions.

It is also assumed that if the student is making good grades that they are spending the time out of school studying rather than driving.  Less amount of time on the roads will result in fewer claims.

What if they don’t qualify when were added to the policy, but get honor roll on the next report card?

Congratulations!  Contact your agent and provide them with proof of the honor roll and it can be added from that time.  Then you will then receive the good student discount.

What can I do to incentive my student to get good grades?

Well, as an insurance agent, I hate to be used as the bad guy!

But, as a mom, my agreement with my kids was if they failed to get honor roll then they had to pay the difference in what the insurance cost where with the good student and what they were without it.

I did not make them work during the school year since they were involved in sports and theater. But I told them that school is their job.  They need to do their job well.  If they can not bring home honor roll then they had to pay the difference in cost.    ( I will tell you that they both successfully finished high school and never had to pay! PROUD MOMA HERE)

If you have an accident or ticket will you lose your good student discount?

No, you will not lose the discount.    The discount is based on grades and nothing more.   Although, getting involved in an accident or getting a moving violation will cause your rates to increase at the renewal,  the discount will not be removed.

Huff insurance also has a young driver contract available.   This allows you and your young driver to spell out the use of the vehicles, number of passengers, and rules of your home as far as good student, tickets or accidents.  If you would like a copy, then please give us a call.

Have Questions?

If you have any questions on the good student discount or any other insurance questions, feel free to give my office a call at 410-647-1111.

 

NOW  is a great time to refinance your mortgage!

We are hearing everywhere that now is a great time to be refinancing your mortgage..

Are you refinancing your mortgage? If so, don’t forget to contact your insurance agent regarding your homeowners insurance.

We are seeing a lot of refinancing going on right now.  In today’s favorable interest rate environment, it can make sense to get a lower monthly payment or to get some cash out of your home’s equity.

What information would you need to provide your insurance agent for a refinance?

1. Mortgagee Clause – This is the name and address that they want to see on the declarations page. It is also the address that your home insurance company will send the annual invoice if you are having your premiums set up in escrow.  They need to have this information show on your declarations page.
2. Closing Date – The date of your closing will be the effective date of the change on your policy to remove the old lender and to add the new lender. So as soon as you have a date set, give your agent a call.  And if this date changes for any reason in the process, remember to call your agent to give them the new date.

Your lender may tell you not to worry and to let them take care of notifying your insurance company to get things straight.

We advise that as soon as you have a settlement date, you contact your insurance agent and give them the appropriate information to add your new lender.

There are a couple if issues that can arise by letting your new mortgage company do this:

1. Timing – Sometimes the lender will get the information over late in the process, causing unnecessary stress for the refinance process.
2. Verification – The insurance agent or company will need verification from you in order to make the change to your insurance policy. The best and easiest way is for you to give your agent a call with the lender information.  Otherwise, the lender will have to send a signed authorization form into your agent in order to process the change.
3. Steering – Most lenders and loan officers are great. But occasionally you will run into a lender or loan officer who wants to cause issues with the insurance process of a refinance so they can send you to their go to agent or company to write a new policy.  Sometimes they will cut your coverages to make the premiums lower to make it look like they can save you more on your monthly payments to them  This is VERY rare, but we have seen it happen.  So it is a great idea to get your homeowners insurance agent involved early on so they can be there throughout the process for you.

So, for your peace of mind and for a smoother refinance transaction, please reach out to your insurance agent with the new lender information as soon as you commit to the refinancing of your mortgage.

If you have any questions on the insurance aspect of a refinance, please give us a call at 410-647-1111.

Are you thinking about refinancing your mortgage but do not have a bank or lender to deal with?

If want to refinance, and are not already working with a lender, we can help.

We know several very reputable mortgage lenders in Maryland and would be happy have one of them reach out to you to discuss your refinancing needs.

Simply fill out the request form and we will have someone reach out to you.

 

Do you know what are your insurance limits are for debris removal?

The times of social unrest were hard on everyone.   Including many business owners, who are finding out that the did not have enough insurance coverage for debris removal.

Several commercial property owners were businesses were torched by rioters.   Those business owners have learned that they did not have enough coverage to clear away the debris.

This clause in the commercial property insurance policy does not usually get any attention attention.  Most insurance policies have a limit on the amount of coverage to remove the debris from a covered loss.  Most insurance policies have a limit from $25,000-$50,000 for the removal of the debris.

According to the Insurance Journal’s September 21, 2020 issue, businesses in the Minneapolis-St Paul area received bids from contractors of up to $200,000 to $300,000 to remove the debris after the riots.

Debris removal is a coverage that is generally built into the policy forms. But it is not a limit shown on the declaration page.

No one focuses on the amount of debris removal in their policy until these types of situations arise.

Could you image having $150,000 to $200,000 uninsured loss.  What would you do?

Some attorneys are arguing that law and ordinance coverage, which requires insurers to include the cost to comply with current building codes when recalculating building codes, could be used.  This has still yet to be determined if policy language will allow them to use this coverage or not.

These small sublimit details in the insurance policy and these sublimit that can cause great distress at the time of the loss.

When comparing policies, you must look at every fine detail not just the limits and premiums that are shown on the declarations page.

When it is just your building that is damaged, the cost structure is different then when there is a natural disaster or some time of large event.   In our society, increased demand leads to increased prices.  Therefore, the coverage limit you have may be sufficient under ideal situations. But in insurance, we need to always consider what is the risk when the situation is the worst scenario.

Claims from the riots over the death of George Floyd are estimated to reach over $2 billion dollars according to Bloomberg News.

In 2020, riots, hurricanes, and the massive wildfires out west, have caused the property insurance claims market to spike.  The spike is not only because of the number of claims being paid, but also the increased cost to re build due to the high demand of building materials.  And because of this, we will be seeing increased property premiums in the next few years for both commercial and residential customers.

There are steps you can take to help offset the increased premiums that we will see in 2021.   

Give Huff Insurance a call at 410-647-1111 to talk over the best options for you and your business.  Talking to an agent to explore options is the best defense.

Remember,  no 2 insurance policies are exactly the same.  You need to pay attention to the small details in the policy forms. That is the only way to determine if the policy is actually a better value or not.  And having an agent like us on your side will help reduce the oversight of the small details.

The Auto Accident is not your fault —- Who do you report it to? 

OH, NO! Someone just hit your car!   

This is a horrible event. Your emotions are running wild. Who should you call to report the claim?    

It depends on who is at fault for the accident.

If it is clearly a not at fault accident, for example:

• You are sitting still at a read light when someone rear ends your car 
• The car in the other lane crosses the center line and hits you.   
• Someone runs a stop sign or red light and hits your car.

If the accident is clearly not your fault, you would start by reporting it to the other driver’s insurance company. This way the other driver’s auto insurance policy can handle the damage to your car, getting you into a rental car, etc.  

In Maryland, if you are hurt or if you are going to be checked out by a doctor or hospital, then you need to notify your carrier. You will need to use your Personal Injury Protection (PIP) before collecting under the other driver’s bodily injury coverage.

If you have medical payments on your policy, then you will need to use this coverage under your policy first. After that, you can file additional damages under the bodily injury coverage of the at fault driver.  

Why shouldn’t I let my insurance company handle the collision part of the claim? 

If your carrier handles the physical damage coverage, you will have to have collision coverage on your policy. They may pay the claim, but it will be less your deductible. And then they will need to go through subrogation against the other insurance company.  Depending on the situation, subrogation can take months or years to be determined. In the meantime, you have had to pay your deductible. Once they receive the money from the other insurance company, they will then pay you back the money that you paid for your deductible.

If the other party’s insurance carrier accepts responsibility, they will pay the claim without you having to be responsible for a deductible. In addition, they will pay for towing and rental reimbursement if necessary, regardless of you having these coverages on your policy.    

What happens if the other party does not accept fault or responsibility? 

Sometimes, the other party disputes the events of the accident and may not accept responsibility. Or, they may delay the progress of your claim for their investigation. If you have collision coverage on your vehicle,  you can file a collision claim then go through the above process.  

Unfortunately, if you do not have collision coverage on your policy, then your insurance company cannot pay for the damage from the accident. You would have to file a claim in court against the responsible party at your own cost.

What if the other person does not have enough limits to cover the claim? Or they have no coverage? 

If you are notified by the other carrier, that they may not have enough limits to pay the claim, you will need to notify your insurance carrier to open an uninsured/underinsured motorist claim.   

In Maryland, depending on your election of uninsured/underinsured motorist coverage, if your limits are greater than theirs you can collect the difference from their limits to yours. 

For example, let’s say the other party has $30,000 auto liability insurance, and you have $50,000 in uninsured/underinsured motorist coverage. You would be able to collect the $30,000 from them and then your policy would pay up to an additional $20,000 under your policy.      

If you have elected to have enhanced uninsured motorist coverage and they have $30,000 and you have $50,000, you would be able to collect up to an additional $50,000 under your policy. 

What if the not at fault accident was caused by a hit and run driver?

If another driver causes the accident and then flees the scene, you would report the claim to your auto insurance company. In Maryland, you are required to have some level of uninsured motorist insurance on your car insurance policy. The limits usually match your liability insurance limits on your auto policy.

You will be required to file a police report in order to trigger the uninsured motorist claim for a hit and run accident. Depending on the severity of the accident, the police may take the report over the phone or may come to the scene of the accident. Either way, make sure to get the police report number and the precinct that the police officer filing the report. This is the process as well for parking lot hit and runs that we see a lot of around the holidays. Check out our blog “What to do if you are the victim of a hit and run accident in a parking lot?”

Once this is done, you can file the uninsured motorist claim. Your UMBI (Uninsured Motorist Bodily Injury) would pay for any medical bills that are above your PIP (Personal Injury Protection) limits. In addition, the UMPD (Uninsured Motorist Property Damage) coverage would pay for any damages to your car and/or personal property that may have been damaged. The UMPD coverage is subject to a Maryland state mandated $250 deductible that you would be responsible for paying.

Will a not at fault accident affect your auto insurance premiums?

Insurance companies now have hundreds of data points to calculate auto insurance rates.  Having a not at fault accident can affect tiering of the policy, and ultimately the price that you are charged. 

In summary, if you have a not at fault accident, there are no injuries, the other person has coverage, and admits fault, then do not report the claim to your insurance carrier. Start with reporting it to their insurance company and let the other insurance carrier handle it.  

But, the moment that you find out that there are injuries, they are not accepting liability, or they do not have any or enough coverage, notify your insurance carrier.  

If you have any questions on this blog or any other insurance topic, feel free to give Huff Insurance a call at 410-647-1111.

 

**Please note that insurance coverage varies by state and by insurance company. This blog is to provide general advice only. Please verify your actual coverage with your insurance company.