Because it's less expensive than collision, UMPD usually pays up to only $3,500 for repairs, but it does not require you to cough up a deductible. If you do have collision coverage and want to avoid paying the deductible (usually at least $500) after an accident, you can add on a collision deductible waiver. Relatively inexpensive, this will waive your collision deductible if your vehicle is hit by an uninsured motorist.
You should also ask your agent what type of coverage you have in the event an uninsured driver hits your vehicle and injures you. Although collision coverage pays for damage to your vehicle, it does not cover medical bills. You may want to inquire about uninsured-motorist coverage for bodily injury.
4. If my car is totaled, how much will my insurance pay to cover the loss?
If you don't address the issue when you buy your policy, the claims check to pay for your totaled car may shock you. Mary Paquette, the vice president of private client services at Chartwell Insurance Services in Chicago, says that some insurance companies pay "actual cash value" while others pay an "agreed-upon value" in the event of a total loss. Actual cash value is the depreciated value of your car at the time of the loss. Many insurance companies use the NADA Guides to look up this figure, Paquette says.
For example, say you insure your new car valued at $20,000 in January. With an actual-cash-value policy, your car may be valued at only $16,000 in July, Paquette says. That's what you would be paid for your wrecked car.
"It can be a surprise," Paquette says. But if your policy has an "agreed-upon value," the total loss value of your car (agreed upon annually when you renew your insurance) does not drop during the term of your policy.
"This way you have the peace of mind of knowing exactly what that value is listed at, and sometimes you have the flexibility to increase that agreed value for an additional premium," says Paquette, adding that companies such as Chubb Group, Fireman's Fund and Chartis Private Client Group offer agreed-upon value. Check with your agent to see if your insurer offers that option. Adding the feature to your policy will cost around $100 extra annually for the average policyholder, Paquette says.
5. If I need new parts for my car, will my insurer pay for original manufacturer parts?
Some insurance companies guarantee "original equipment manufacturer" parts while others will pay only for aftermarket parts, Paquette says. As the name suggests, OEM parts are those made by the manufacturer of your vehicle. Aftermarket parts are generally less expensive and made by another manufacturer.
"To some people it really doesn't matter, but to some people it does. These are just good things to know," Paquette says.
Some insurance companies also retain the right to use either one. For example, when it comes to safety items that include air bags and engine parts, some insurers will guarantee OEM parts. But if you need to replace nonsafety items such as a stereo, power windows and doorknobs, you may get aftermarket parts. This may not always be negotiable. Some insurance companies will not write policies that guarantee OEM parts. Of course, you can always choose to pay the extra cost for OEM parts if you're in an accident.
"But if you have an option between companies, you may want to go with a company that does not retain the right to use aftermarket parts," Paquette says.
This article was reported by Kat Zeman for Insure.com.
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