Streets Riddled With Potholes; Is Your Car Covered?

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I.I.I. offers auto insurance information for season-related damage as winter poses another challenge for drivers

(Editor’s Note: In some provinces in Canada, auto insurance is provided by the province, but in others it is regulated by the province. The terms used here and the specifics by type of coverage may differ by province. Check with your insurance provider to make sure you have the coverage you need.)

NEW YORK, February 18, 2011 – After enduring snow, wind, ice and frozen rain, drivers now must deal with a another challenge: potholes. Streets and highways have turned into obstacle courses in many parts of the country; fortunately, there is auto insurance coverage for damage resulting from potholes and other winter-related disasters, according to the Insurance Information Institute (I.I.I.).

“Winter weather can wreak havoc on cars, which is why car owners need to financially protect themselves with the right type and amount of auto insurance,” said Jeanne M. Salvatore, senior vice president and consumer spokesperson for the I.I.I.

The I.I.I. offers the following insurance tips so that drivers can protect themselves against winter-related disasters:

POTHOLES

Damage to cars due to potholes is covered under the optional collision portion of an auto insurance policy. Coverage for potholes may vary from company to company—for instance, there may be limited coverage for damage to tires if the car itself was not affected by the pothole. This coverage also pays for a collision with another car, object or as a result of flipping over. Collision coverage is generally sold with a deductible of $250 to $1,000—the higher the deductible, the lower the premium.

WINTER-RELATED DAMAGE

The optional comprehensive portion of an auto insurance policy provides financial protection against a number of winter-related disasters such as a tree or chunk of ice that falls on a car, as well as a lightning strike that may be part of a winter weather phenomenon known as ‘thunder snow’. Comprehensive coverage provides reimbursement for losses due to theft, fire, earthquakes, flood or hail. Basically it covers losses caused by something other than a collision with another car or object or a crash with an animal such as a deer.

Comprehensive insurance is usually sold with a $100 to $300 deductible; again, a higher deductible means a lower premium.

Comprehensive insurance also reimburses for cracked or shattered windshields, and some companies offer this glass coverage without a deductible.

Remember that comprehensive and collision insurance are optional coverages. Lenders, however, frequently require comprehensive and collision coverage as a condition of the loan agreement. Those driving older cars sometimes drop these coverages as way of saving money. If a car is worth less than one thousand dollars or less than 10 times the insurance premium, purchasing the optional coverages may not be cost effective.

Seventy-seven percent of insured drivers purchase comprehensive coverage in addition to liability insurance, and 72 percent buy collision coverage, according to 2008 National Association of Insurance Commissioners data.

The average comprehensive claim was $1,389, while the average collision claim was $2,869 in 2009, according to ISO.

ACCIDENTS AND CRASHES

Blustery winds along with snow and ice create hazardous driving conditions, increasing the possibility of auto crashes and injuries.

To drive legally, there are state required amounts of liability insurance. These requirements, however, are generally quite low, so in order to be financially protected drivers should be sure to get enough insurance to protect their assets in the event of a crash with another car or a pedestrian. The insurance industry and consumer groups generally recommend a minimum of $100,000 of bodily injury protection per person and $300,000 per accident.

Drivers can purchase more liability protection on their auto policy, or obtain an umbrella liability policy. Typically, these policies cost between $200 and $300 per year for a million dollars in coverage. This is a cost-effective way to get additional liability protection, but keep in mind that an umbrella policy kicks in only once the limit has been reached on the underlying liability coverage in an auto policy.

“Drivers should contact their insurance agent or company representative to review their auto insurance coverage and make sure that they are financially protected for their specific situation and are taking advantage of every available discount,” pointed out Salvatore.

The I.I.I. has additional auto insurance information on how to file an auto insurance claim, the six basic coverages in an auto insurance policy, a white paper on compulsory auto insurance, as well as facts and statistics on winter weather.

In addition, the I.I.I. has growing library of auto insurance related videos and podcasts, including a podcast on how to save money on auto insurance.

About I.I.I.

The I.I.I. is a nonprofit, communications organization supported by the insurance industry. www.iii.org.