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THIS IS AN ADVERTISEMENT!
8. What should I know about Auto Insurance? In our modern society, the orderly transfer of risk between the members
of our society is accomplished through insurance. In
exchange for a known loss (payment of an insurance premium), the risk of a
large catastrophic loss (payment of thousands of dollars for damage to our
person or property) is transferred to the insurance company through the
insurance policy. In auto insurance, there is first party coverage and third party
coverage. First party coverage covers you and your property (such as
medical expenses, damage to your vehicle and the insurance company's duty
to defend you in an event that you are sued as a result of your operation
of a vehicle, etc.). Third party coverage is for
your responsibility to pay for injury caused to other people, whether
in your vehicle, or another vehicle involved in the accident.
The coverage (and its exclusions is set forth in your insurance
policy. In exchange for the payment of a premium, the insurance
company promises to provide compensation in the event of certain
occurrences. You can speak to an insurance representative to find out more
about the option available to you, and their
costs. In determining what Liability Limits
you should purchase,
you need to consider the amount of exposure that you have. As a
general rule, the more property and wealth you own, the greater your
exposure is, and the greater the need for protection against claims from
third parties. In Kentucky, the minimum policy limits allowable is
25/50, which means coverage of loss of up to $25,000.00 per person and up
to $50,000.00 for all injuries, which occur in a single accident.
Often the minimum liability limit is inadequate to protect all of your
property and wealth. Increased limits such as 100/300 or 300/500 are very
common and can be purchased at modest addition cost to you. Your vehicle itself can be covered in several different ways. Comprehensive coverage provide
coverage for loss to your vehicle due to certain causes (such as fire,
theft, vandalism, and acts of nature.)You & the Law I
Collision covers damage to your vehicle in the event that it collides with another vehicle or object, often regardless of whom is at fault in the event of an accident.
Both comprehensive and collision coverage may be subject to a deductible, that is, damage to the vehicle must exceed the deductible amount before the insurance company will pay you for a covered loss. Deductibles for this coverage are available is various amounts, generally the greater the deductible, the lower the premium for
the coverage.Most insurance policies require NOTICE OF LOSS be provided to the insurance company. When you are involved in an accident, the terms of most insurance policies state that you must contact your insurance company and tell them about the accident. Should you fail to tell your insurance company about an accident in a timely manner, the insurance company may try to deny coverage for the occurrence.
After you have notified your insurance company of an accident, the policy will require you to cooperate with the insurance company. This means that you are required to allow the insurance company to hire an attorney or otherwise participate in the settlement and litigation of claims against you by third parties. This also protects you, as the insurance company will provide a defense for you in the event that you are sued as a result of your operation of a vehicle.
Once an insurance company has provided benefits to you, such as the repair of your vehicle under collision damage coverage, you must give the SUBROGATION RIGHTS arising from the accident to the insurance company. This means that once your insurance company has "made you whole" after a loss, you must give your right to pursue negligent third parties for compensation to the insurance company. This enables the insurance company to be "made whole" for its payment to you by recovering damages from the negligent third party. In other words, if your insurance company pays you for damage incurred in an accident, which was not your fault, you give them the right to sue the party at fault, and you give up that right.
All contents © Copyright 2008 by William Grover Arnett, P.S.C..
All Legal Rights Reserved.
The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an attorney for individual advice regarding your own situation.You may reproduce materials available at this site for your own personal use and for non-commercial distribution. All copies must include the above copyright notice.