by Daniel Griffin, President of Wesfair Agency, CIC, CPA
When people buy insurance, and when policies renew, they’re usually focused on the price. Then you have a claim and the panic sets in. Did I cut too much? Did I cover enough?
Having an insurance claim is a stressful experience. I can say that firsthand, having just had one this week. I was driving to work on a two-lane highway. It was normal commuter traffic with cars all around me. Up ahead, I spotted a wild turkey watching the cars pass on the side of the road. It was a very big bird. It made a run for it. WHAM! He ran right in front of my car, which was driving at 55 MPH.
When I got to my office I saw the real damage—my bumper was pierced and hanging, my headlight and fog light were both broken, my wheel was bent, my hood was popped up. I was shocked that a turkey could do that much damage. After showing everyone in my office, I was left with the big question: What do I do next (besides get ready for an early Thanksgiving dinner)?
Our clients call us all the time to answer that type of question, but going through it personally helps put it in perspective. Plus, I had an office full of people to talk to about it. Without that support, figuring out what to do after an accident is an overwhelming experience. You can’t call a 1-800 number and ask for advice on what to do, whether to report the claim, who to call about a rental car, or how long it all takes. My car was brand new, only two months old. That’s when the value of an independent agent, your advocate, really comes in.
Because my colleagues have years of experience to draw on, it was agreed that the extent of the damage-by-turkey was worth putting in a claim for. Contact with an animal is considered a “comprehensive” or “other than collision” claim in auto insurance. It’s typically not chargeable, which meant my rates weren’t likely to increase.
There are two main types of insurance claims for damage to your own vehicle:
1. Collision coverage
Generally, this covers the driver for damage caused when hitting another car or object. Insurance companies generally view this type of claim as impacting the future rate of your policy since, according to the actuaries, you are riskier having had a collision in the past.
2. Comprehensive or “other than collision” coverage
This covers you for many other, non-collision, claims such as flood, fire, fallen tree, or contact with an animal. In that situation, the animal is generally judged to have made contact with the car, rather than vice versa.
If my car was older, we wouldn’t be having this discussion. Contact with a bumper used to be a simple claim—replace the bumper, or bang out the dents. But today, unibody construction in cars has resulted in small claims like mine becoming high cost affairs. My plastic bumper was pierced and needed to be replaced. The headlight gets knocked out at the same time. And to top it off, the pierced bumper also houses the radar system (see my article on autonomous driving), which needs to be reinstalled. Claims have gotten expensive!
These are also the times where we hope we bought the right policy, and ask:
Will my insurance company allow me to rebuild with original manufacturer parts, or insist on used or aftermarket parts?
Will my leasing company allow me NOT to?
Do I have rental coverage?
What was that deductible again?
Being in the business, I had ready access to these answers, but most people don’t. In my case, my policy pays for original parts for 3 model years. If I didn’t lease, I’d likely seek a carrier with NO limit on time. I had a comprehensive deductible less than that for a collision, since I have no control over comprehensive claims (and you can’t recoup your money back from the late turkey’s family). Also, I had taken off my rental coverage, since my family has cars to back me up if I ever needed them (a decision I now questioned facing the prospect of the old Subaru). Even worse, the “discount carriers” provide their own USED parts to the collision shop to use in repairs. Imagine buying a new Mercedes and having the radiator replaced with one that’s been through 25,000 miles…not exactly “like kind and quality”.
In case you’re wondering how the turkey collision turned out, I just picked my car up from the body shop. The car looks showroom new. But my conversation with the owners of the body shop reminded me that for most, this whole situation is riddled with unanswered questions and doubt. Many customers are frustrated and confused by the process. It’s that time where an outside voice, where an independent agent, where WE can be a big help.
Thanks for all the feedback you’ve given so far! If you have ideas for future blog posts, shoot us an email at contact@wesfair.com.