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Personal Injury Protection (PIP) covers against medical expenses and some of the losses that inevitably follow a traffic accident where drivers and their passengers are injured or killed. So, for example, you can claim loss of earnings and the equivalent of damages for pain and suffering. Where the driver dies, funeral expenses are also recoverable. Such policies are standard in the no-fault states. It’s expected claims will be settled without having to prove negligence, so you claim all your losses from your own insurer. Even in the at-fault states, holding a version of PIP, e.g. Auto Medical Payment cover, gives peace of mind, leaving it to the insurance company to sue in your name if the driver at-fault refuses to reimburse your insurer. Note that PIP cover is mandatory in 14 states, but the terms differ in their detail between those states. You should check through the small print before making a final decision on which policy to buy.

Such policies are supposed to make everyone’s life easier if they are injured, so it’s sad to see one insurer consistently refuse or reduce its customers’ legitimate claims. USAA is now facing its third class action law suit alleging a formal strategy to collect in the premiums and then refuse claims. In one sense, this is extraordinary given ASAA’s focus on the families of both serving and honorably retired members of our armed forces. A company that prides itself on looking after the interests of those defending our shores should offer top-class service. Instead, this latest law suit alleges the company is more interested in its bottom line, in effect cheating service personnel and their families.

The Plaintiff alleges USAA conspired with a second company, Auto Injury Solutions (AIS), to carry out a fraudulent cost containment program. Although the pleadings are quite general, it seems AIS produced dishonest reviews of medical claims which USAA then relied on in denying legitimate claims. What makes this particularly egregious is that this is the third law suit alleging a formal strategy not to pay out on medical claims. The first two suits were settled by USAA paying large sums in compensation. Under such circumstances, there’s a good case to be made for stripping USAA of its license to sell insurance. (more…)

You always hope for the best whatever you do. Let’s face it, setting off expecting the worst often becomes a self-fulfilling prophesy. So when you learn to drive, you first hope you will never have an accident. Then you hope you will only have a small accident. The idea of a total loss is not something you want to think about. Yet it’s surprising how often you find the insurer wants to total your vehicle; and then there are the times when your pride and joy disappears off the face of the Earth. That’s a really sad moment. So what are the rules when the unthinkable happens? In this, don’t forget the minimum liability policy is no help. For repair of your own vehicle, you need a collision policy. To recover value should your vehicle be stolen, you need a comprehensive policy.

Let’s start with an accident in which your vehicle is damaged. Your first instinct is to repair. The insurer gets estimates. If it’s going to cost more than the market value of your vehicle, the insurer will offer you a check. Now comes the really sad part. The check is for less than you expect. This is not the price you paid. This is not the price you think the vehicle would command if you advertised it for sale. This is the price the insurer thinks you will have to pay to buy a similar replacement. So you may have showered love on this vehicle. Its paint may gleam in the morning sun and it has been perfectly maintained. You look at the check and see it will only buy an unloved wreck. But there’s worse to come. Suppose your vehicle was bought using an auto loan and the amount of the check will only pay off a part of the money outstanding on the loan. To cover this gap, there’s a separate insurance policy you can buy. That way, there will always be enough to pay off whatever is owing to the bank or finance company.

Then come all the woes of a stolen vehicle and its contents. Let’s start with all the things on the back seat and in the trunk. You will find the auto policy excludes the value of anything that’s not a part of the vehicle. Your only hope of recovering the value of whatever is lost with the vehicle is your home insurance policy. You need to check the wording of the policy, but most will cover the value of items like your notebook or CDs that would normally be a permanent part of your home contents. It can be more difficult if you have just filled the trunk with food from your local store. Check the wording of any insurance that comes with the credit card you used to pay. Some cover the theft of new purchases. As to the value of the vehicle itself, you run into the same problem as with collision cover. That market value may be a lot less than you owe on the vehicle. (more…)