FAQ Fridays – Questions to ask to insurance agents when shopping around?

Gregory: Hello everybody, welcome to another frequently asked question Friday, today we have for the second time on the show, Christian Meneses. Christian's been attorney here since a year and a half. Anyway, the topic today you wanted to talk about was "What questions should people ask insurance companies when they're shopping around?"

Christian: Yes, either when you're shopping around or just inquiring into your coverage, I know your term expires and then you need to review it and I think it's one of the most important things you need to ask it's.

Gregory: Mostly broke out of your fees about what is covered if what's not.

Christian: Right, yes exactly.

Gregory: Like we have a lot of people come in and tell us I'm fully covered, but fully covered doesn't really mean fully covered.

Christian: Yeah we have a lot of times that that happens and a lot of people are left you know, without coverage.

Gregory: Okay so I guess give us some examples of things people need that they, you know, a lot of times they don't get that we see all the time.

Christian: Okay, well in Texas everyone is required to have liability insurance. Really the only thing this does is protect you in case you are sued, so this doesn't you know cover your vehicle your damages, any of your injuries. So what you need to get is there's a collision, there's comprehensive, there's PIP coverage and then there's UM / UIM coverage. These are all the additional ones that we recommend you get.

Gregory: I think there's one more coverage that we see a lot of times people don't have and that is, lots of people now are financing their cars for like 7 years and soon as they drive the car to the lot, they obviously lose some value then and then their car depreciates faster than they can pay it off, so what happens when they're in an accident and somebody goes "we're gonna pay you full value" for your car, what happens?

Christian: Then you're like left in the negative, so what you need then is a gap coverage.

Gregory: So that will make up the difference between how much your car's depreciated and what you still owe? Alright so let's go through the other ones in briefly, so the first one was like collision.

Christian: Collision, this covers you when pretty much when you hit something or when you're hit by someone else. This will help cover the repair cost for your vehicle or in the alternative, if the repair costs are higher than the value of your vehicle, they will just pay you for the value of your vehicle.

Gregory Herrman: What about comprehensive?

Christian: Comprehensive pretty much covers anything else; examples of that would be like hail damage, maybe some flood damage, things like that. Pretty much when something happens to your car but it's not that you hit something.

Gregory: What about PIP?

Christian: PIP stands for personal injury protection, this will help you cover your medical costs as well as any lost wages.

Gregory: Alright and what about there's something called Med Pay.

Christian: Yeah, Med Pay it's almost the same thing but it just doesn't help with the lost wages.

Gregory: Okay and those are both no-fault insurance right?

Christian: Yes

Gregory: So it doesn't matter whose fault.

Christian: You can recover

Gregory: Alright and finally UM and UIM.

Christian: UM stands for uninsured motorist, this happens when someone else hits you and they don't have any coverage, so then your own insurance would kick in. Then there's also UIM which stands for underinsured motorist, and this happens when the other person hits you and your damages go beyond what their coverage is, for example if they only have liability but you have more expenses than that, more medical bills things like that, then after you recover from their insurance then your UIM will kick in after that.

Gregory: Okay, so is there specific questions they should ask their insurance company when it's time to renew or if they're switching to another carrier or specific questions they need to ask.

Christian: Yes, always inquire what coverage you currently have or what coverage you're about to get, I know a lot of people they just go by price, that's not the best way to go at it, just because the cheapest doesn't mean you know that you're gonna be covered, so inquire into what actual coverage you have. One thing that we didn't talk about also is car rentals. That will help cover your costs for the car rental if you are hit by someone else or if something happens to your car and it's in the shop, your insurance will help you get a car rental and they'll cover that cost.

Gregory: So and that's something we see a lot too is people get hit by somebody who doesn't have any insurance and they they don't have car rental insurance so now, they got to put the car in the shop and there's somebody to reimburse for a car rental so they just gotta pay it out of their own pocket right.

Christian: Correct, yes.

Gregory: Alright and then what if what if your agent says something like okay you'll be fully covered this way, would you just stop and say oh okay?

Christian: No, I would inquire how am I fully covered, for example, say what if someone who is not insured hits me. Am I covered then or do I have coverage beyond that. You know also like the PIP is something I highly recommend because this covers for your medical costs and you can obtain it pretty fast, sometimes your cases take a long time and if you have PIP coverage it helps you get some funds while your case is ongoing.

Gregory: You can get that in addition to the liability that you're going to from adverse.

Christian: Yes

Gregory: And they can't raise your premiums for PIP right because it's no fault.

Christian: Correct

Gregory: Okay so you know they really should when they say well what do you mean full coverage, they ought to go in there with this list and go okay well, do I have collision? do I have comprehensive? Of course, there will be liability because you have to have that. Do I have PIP? or do I have that Med Pay? Do I have UM? Do I have UIM? Do I have a car rental? And so they should specifically go through and just say do I have each one of these, am I covered for all these things?

Christian: Yes and it'll be a certain amount that you're covered for each, they'll be for example the minimum is 3060 then they can go up from there.

Gregory: And I think people should be aware also that the state law says that they have to actually sign something if they want to reject PIP, right? And they have to sign something if they want to reject UM coverage?

Christian: Yeah you have to sign something if they don't make you sign something your PIP when you're rejecting it then you automatically have it included in your coverage.

Gregory: Because we see that a lot over here right where people say oh how my carriers or my agents say I don't have that, and we say okay, get us the rejection form and they can't produce it right.

Christian: Yes

Herrman: So that means they got PIP now when they give you UM.

Christian: Yes.

Herrman: Okay so if that should happen to anybody and you think you don't have PIP or that you have no UM and the agent tells you that the carrier does it, that's okay, let me see my form where I rejected it and if they can't produce that form you're automatically covered.

Christian: Yes

Herrman: Alright, anything else we need to cover?

Christian: No, I think that's it in regards to the questions for auto insurance.