Bodily Injury Liability

Law requires this coverage, and the Oregon State minimum is $25,000/$50,000. What do those numbers mean? If you crash into another car or hit a pedestrian, the insurance company, on your behalf, will pay up to $25,000 to the person you struck. Apart from that limit are expenses, behind the scenes, that don’t draw from that amount. The insurer will, at its cost, provide a legal defense should a civil action be brought against you. But, once they agree that the other party’s injuries exceed $25,000, they will notify you that they are no longer providing you that service and that you should seek counsel at your expense. Besides the legal defense, they undertake all the necessary work to assess the injuries, gather medical reports, investigate the scene, take statements from witnesses and the injured party, and much more. The $50,000 represents the total amount the car insurance company will pay if more than one person is injured. The $25,000 limit still applies per person.

The big question is: Is $25,000 enough? Have you checked medical expenses lately? $25,000 can get used up in the first hour after you injure someone. The ambulance ride alone can cost up to $5,000. Depending on the tests, x-rays, MRIs, and lab results, the charges for emergency department care at a hospital can range from $10,000 to $20,000 or more. Any surgery to set bone fractures or repair internal soft tissue damage can cost tens of thousands of dollars. Please discuss with us the cost of increasing your limits to $50,000/$100,000 or $100,000/$300,000. You’d be surprised how little your policy would increase, given the possible risk you face of exceeding your limits.

Property Damage Liability

Oregon requires $20,000 of coverage to pay for the property damage you may cause by crashing your car into something else. That could be a fence, an ornamental tree, a sign, a power pole, another car, truck, or train, or a house. If you damage any object because you lost control of your vehicle and disobeyed a traffic rule, you will be held liable to reimburse the owner of the property. Is $20,000 enough? What if you total the other guy’s car and he just bought it brand new for $50,000? You can see where I’m going with this. Again, just like Bodily Injury Liability, it doesn’t cost that much extra to increase this limit to $50,000 or $100,000.

Uninsured Motorist Bodily Injury

Say someone hits your car with theirs and runs away. You do not know if they have insurance. Not only is your vehicle damaged, but your arm, neck, and shoulder also hurt. The paramedics are careful to pull you out of your car, put you on a stretcher, and secure your neck and head because they don’t know how bad your injuries are. Who is going to pay for all of that? The other guy took off. You have no way of making them responsible for your injuries if the cops can’t find them.

That’s why the State of Oregon made this coverage mandatory. You are paying for coverage that the other person should have bought to cover you and the passengers in your car. This coverage also applies to the other driver who remains at the scene and has no insurance or insufficient coverage to cover your injuries.

The minimum purchase limit is $25,000 for you, plus an additional $25,000 per passenger accompanying you. The company will cap the amount they pay at $50,000 per accident, even if you have four injured passengers in the car with you. Your health insurance would cover the difference, subject to all applicable copays and deductibles. Again, please discuss with us the additional cost of increasing those limits to $50,000 or $100,000. It’s you and your body we are talking about this time, not someone else.

Personal Injury Protection (PIP)

So far, we have talked about the injury or damage you cause to others, or the injury someone causes to you, and who leaves the scene or has no insurance. Let’s talk about the cost of medical expenses for you or your passengers, regardless of fault. This benefit is paid in addition to any other applicable coverage. It is often referred to as no-fault insurance. The insurance company won’t care whose fault the accident was. They will pay from the first dollar to the hospital or doctor. It’s a payment guarantee of the initial cost to treat you should you get injured as a driver, passenger, or pedestrian in a car accident. You don’t even have to be in your car. The mandatory minimum Oregon State limit is $15,000. That limit can also be increased.

Uninsured Motorist Property Damage

This coverage is optional, but you must initial the application to reject it. We think it should be mandatory, like the first four items listed above. For such a low cost, your car is protected in case someone hits it and doesn’t have insurance, or takes off without knowing if they have coverage or not. The limit on this coverage is the value of your car at the time of the accident minus a deductible of either $200 or $300, depending on whether you know who hit you. If your car is worth $5,000 and it’s totaled, you’d get $4,700 from your own insurance company if it’s a hit and run or $4,800 if the other guy doesn’t have insurance. If your car isn’t totaled, the company will pay to repair it minus the deductible. All this coverage usually costs less than $20 for six months. Cheap!

Other Than Collision

This coverage is optional and is often referred to as ‘Comprehensive Coverage.’ Insurance professionals shy away from using the word ‘comprehensive’ because claimants, in the past, have sued insurance companies for items that were not intended to be covered, simply by convincing a judge and jury that they thought the word meant the company would pay for everything. They failed to read the policy language. So, the insurance industry changed the term used to ‘Other Than Collision.’ Silly, I know, but it happened.

Anything that damages your car other than hitting something while you are behind the wheel falls into this category. Vandalism, theft, windstorm, hail, flood, tree branch, fire, and your four-year-old daughter scratching ‘I love you, Daddy’ with a screwdriver in the door are the typical things covered under this policy clause. There are a few exceptions to the ‘hit something while behind the wheel’ rule. If you hit a deer (a moving object not usually in the roadway), the company usually pays for it out of Comprehensive Coverage. The same goes for any other thing that is in motion that shouldn’t be there, like a falling rock or an office chair that just fell out of the back of a guy’s truck. The object must still be in motion when you hit it to be considered Other than Collision. If the object is stationary, then it would be regarded as at-fault and paid out of Collision.

That doesn’t seem fair, however. Hitting a large boulder in the middle of the road should not be your fault. Right? Wrong. If you keep your eyes on the road, drive at the indicated speed limit, and obey cautionary signs to slow down around corners, then you should have enough time to react.

This coverage is subject to a deductible of your choosing. $500 is the standard that a lender will require. You might go higher if you don’t owe money on your car, to say $1,000 or $2,000. That means, after any damage that occurs to your car under this coverage, you would pay out of pocket the deductible, and the auto insurance company would pay the rest.

Collision

This coverage pays for the damage to your car after you hit something, and it’s your fault. It is also the benefit that will pay for your vehicle if someone crashes into you who doesn’t have insurance but failed to purchase the optional Uninsured Motorist Property Damage. The deductible is typically $500 if you have a finance company, or you may select a higher deductible to save money if you own your car.

Generally, when shopping for insurance, a new company will see a collision claim in the consumer reports and automatically consider it an at-fault incident, which will result in a higher quote. But what if you were not at fault and the company paid out of the Collision coverage? Then, you must prove it wasn’t your fault. Some reports will spell out that the other party was at fault, but not all. That’s why we advocate that you purchase the Uninsured Motorist Property Damage, so this doesn’t happen.

Other Optional Coverages

Rental Reimbursement

Recently, this coverage has been particularly crucial. The time to fix a car has risen exponentially. Supply chain issues with car parts, especially electronics, have hindered the body shops’ ability to repair autos quickly. Usually, you must have purchased physical damage coverage (Comprehensive and Collision) to be eligible for this option. The company offers daily limits of $40, $50, or $60, with a maximum of 30 days. That used to seem like plenty. Claimants are waiting as long as three to four months to get their car repaired. Use the coverage wisely. If your vehicle is still safe and drivable, drive it until the body shop confirms that they have all the necessary parts in stock. Who cares what the car looks like until then? $50 a day for three months adds up quickly.

Towing or Roadside Assistance

Not all companies offer these options, but be aware that they are not the same. Towing is usually a reimbursement-type benefit. If your car breaks down or is involved in a crash, the company will reimburse you up to $50 of your tow bill. So, if it costs you $400 to have your automobile towed from the scene to your home or a body shop, the company will send you a check for $50.

Roadside Assistance coverage means you call the 800 number on your insurance identification card to report a breakdown or accident. Then you wait for the contracted tow company to come and assist you. Normally, you don’t have to pay out of pocket unless your policy has a mileage limit, typically 15 miles. So, if your car needs to be towed to a location, say, 40 miles away, then you might have to pay for the extra out of your pocket. All this is negotiated in the dark, on a dangerous highway, in the cold. Other parts to this coverage may include lockout, tire change, fuel, or battery jump. Read the limitations and exclusions carefully before you head out on the highway.

We recommend separate roadside coverage, such as AAA. It usually has few restrictions. Just know that when you sign up with them, they will spam the heck out of you with offers to buy their other products, like auto and life insurance. You should keep your roadside coverage separate from your auto insurance, as many companies will increase your rate significantly if you use it frequently. Having three or more tows during a policy period may result in your auto policy being canceled altogether. Other optional coverages may be available in your auto policy, such as accidental death coverage, which provides a benefit of approximately $10,000.

Commercial Auto

Your business auto insurance policy declaration page will resemble the one described above in the Personal Auto Insurance section. The primary differences will be the types of vehicles and drivers covered under the policy. Vehicles weighing more than a certain amount, such as one ton or above, must be covered under a commercial policy, regardless of their intended use. Limits of Bodily Injury Liability can go much higher to meet specific contractual needs. You may include your personal automobiles on a commercial policy, but not the other way around. Personal Injury Protection coverage is available only on cars that would qualify for a personal auto policy. For trucks exceeding that limit, medical coverage is optionally available. It is assumed that you and your employees would be covered by Workers' Compensation Insurance should any of you be injured in an accident during work hours and in a company vehicle. There would be no need for PIP coverage.

Optional Coverages and Certificates

Cargo, non-owned and hired autos, and trailers are a few additional items that can be added to your policy. Accessories you add to a vehicle are included in the physical damage portion of each policy. It will show a split between the value of the auto and the additional equipment. If you buy a stock truck, and then add accessories later, don’t forget to update the policy with your agent.

Often, a government agency or a contract will call for a certificate to be issued. It is a form that guarantees your policy meets specific liability limit requirements for the length of the job.

Renters Insurance

Property Coverage

Your bed, furniture, clothing, kitchen utensils, computers, phones, and television are all covered under the property damage section. You set the limit of how much you think all your stuff is worth. The minimum is usually set at $20,000. If you think you can buy everything new, not used, for $20,000, then select that amount. It’s a good idea to go through your apartment or rented house and inventory the cost of things, brand new. Should you have a fire, the company will not require you to purchase used items from a thrift store or an online barter website.

Personal Liability

Many renters fail to appreciate the value of this coverage. Yes, your personal property is essential for daily convenience, but imagine if you lost all that, along with your savings and future income, because you were sued by your neighbor and landlord after you accidentally burned down their unit. Your renters' insurance covers your negligent acts, such as leaving an unattended pot on the stove or a bathtub filling with water that floods the space below. If you have children who cause damage or injury to others at home, on the playground, or at school, you could be held liable as a parent. The insurance company would provide a defense and pay for any damages or injury you might be legally responsible for. The standard limit is $100,000, but, like auto insurance, consider a higher amount for a little extra protection.

Loss of Use

This section covers the additional cost of having to live somewhere else after your abode becomes uninhabitable due to a covered loss, such as a fire. Renting another apartment or staying in a hotel while your apartment is being fixed could become very expensive. Plus, just because you had a fire in your unit doesn’t release you from having to pay the rent. This coverage typically represents a percentage (usually around 40%) of the personal property coverage amount. If you have $30,000 in personal property, you’d have $12,000 in loss of use. You don’t get that $12,000 all at once. The company would provide you with $1,000 per month for twelve months. If you can move back into your apartment in six months, you’d get $6,000. Is $1,000 a month enough to pay your extra expenses? If not, maybe consider purchasing more.

Other Coverages

Your renters' policy may allow for an increase in limits on certain items, such as computers and jewelry. Typical policies have limits on these high-dollar items, and you must pay a little extra if you enjoy higher valued items like these and want them sufficiently covered.

Motorcycle and ATV Insurance

The limits and coverages are similar to those described in Personal Auto Insurance above. The fundamental difference you notice is the lack of Personal Injury Protection. It’s not available on motorcycle policies. You may purchase optional medical coverage, but it’s expensive. Often, we recommend you buy medical insurance only if you don’t have health insurance. You can add optional coverage for your bike to cover accessories, such as saddlebags. Modern motorcycle policies also offer insurance for riding gear and helmets.

Boat Insurance

Again, the Bodily Injury and Property Damage Liability Insurance described in Personal Auto Insurance applies to boat insurance but is modified for damage or injury you cause while on the water instead of driving on the road. You will notice that physical damage coverage splits up the value of the boat and each motor. Optional coverage is available for trailers, accessories, and personal effects that you carry onboard.

Motor Home and Travel Trailer Insurance

The same Personal Auto Insurance coverages apply while driving a motor home. The stated value of the vehicle defines the physical damage portion. You can add or increase the limit for your personal property carried inside the RV. Of course, travel trailers have no motor, so the liability is extended from the vehicle towing the unit. However, you do need to insure the travel trailer and its contents for physical damage and theft.