Insurance

Note: This list contains information based off my own insurance provider (Mercury). I suggest speaking with your insurance broker to double check what is true for me is true for you.

Car Insurance

Scenarios to run through with your insurance broker

  • What happens if you’re in Mexico or Canada and you get an accident?
  • What happens if you’re driving a dirt road and turn a blind corner and get in an accident?

Comprehensive versus collision

  • There are two types of claims when filing a claim with your insurance: Comprehensive versus Collision. Comprehensive insurance pays for repairs after certain non collision issues, including theft, falling objects, fires, windshield rock chips, animal collisions and others. Collision coverage covers your vehicle from a crash that you cause or if you have a one-car accident (eg. Hitting a sign). This is generally required if you have an auto loan.
  • Collision may increase your premiums whereas Comprehensive generally doesn’t affect your premiums. Each type of claim has different deductibles.
    • As an example, replacing a windshield generally falls under Comprehensive.

Understanding your deductible

  • Your deductible is the predetermined amount that your insurance company subtracts from your claims that you’ll owe. For example, if you claim for an accident is $5,000 worth of repairs and your deductible is $500, you’re responsible for paying the $500. And your insurance company will cut you a check for $4,500.
  • Higher deductible usually means cheaper rates. However, you’ll need to pay more should you file a collision or comprehension claim.

Understanding your premium

  • Your premium is the cost of your insurance plan, often billed monthly or 6 months at a time. Various factors described in this document affect your premiums.

Insuring aftermarket equipment

  • Roof racks, rock sliders, fog lights, full vehicle Paint Protection Film (PPF), replacement bumpers, etc, can be included on your policy. This will often increase the premium of the policy. Aftermarket equipment is anything that is not stock on your vehicle.
  • By default, if you don’t add aftermarket equipment to your policy, it won’t be insured.
  • Sometimes, your insurance broker may need to check with their underwriter to see if you’re special aftermarket modifications can be covered.

Full versus partial coverage

  • This is important to understand. In the event of an unfortunate accident, or even if your vehicle is hit while parked and deemed a total loss, partial coverage will not cover the full replacement value of the vehicle (depreciated value). I know someone who this happened to. He went from a high end 4Runner to a much smaller sedan because he had partial coverage on his new vehicle.

Medical Coverage

  • Medical coverage is an add on to your insurance that goes into effect if primary health insurance coverage is depleted.

Towing

  • Understnad towing services if that’s on your policy. I have AAA for that myself.

Rental reimbursement

  • Rental reimbursement is an option on policies. This is used if you get in an accident and require a rental car.

Gap coverage

  • This might be helpful if you didn’t put down a decent amount of money on a new vehicle. Gap coverage covers the gap between the depreciated value of the car and the amount borrowed to purchase the vehicle.
    • For example, if $20,000 is owed on a vehicle and at the time of a total loss accident the vehicle is worth $15,000, gap coverage will cover that $5,000 difference.

Business use

  • If your vehicle is used for business purposes, ensuring “business use” on your policy will include coverage during business use.

Permissive use

  • If someone else drives your vehicle who is not on your policy, ensure you have “Permissive Use” on your policy. Car insurance followers the vehicle, not the driver. Ensuring you have “Permissive Use” on your policy will allow your vehicle to be covered if someone else drives your vehicle and gets in an accident.
  • Similarly, if you’re driving someone else’s vehicle, it may be worthwhile to see if they have “Permissive Use” on their policy should an accident occur.

Understanding “Limits of Liability”

  • In my policy, I have a defined limit for the following:
    • Bodily Injury Liability
    • Property Damage Liability
    • Uninsured motorists bodily injury liability
  • Due to the number of expensive Teslas being on the road, and the possibility of an accident with such expensive vehicles, my limits are $100,000 and $300,000 per person on the above 3 categories. The higher the limits, the higher the Premium. I went with this so I didn’t have to think about getting in an accident with a vehicle and not being covered due to the cost of other vehicles.

What to do if you get in an accident

  • Take pictures of the accident. Take lots of pictures.
  • Take a photo of drivers license.
  • Take a photo of license plates.
  • Take a photo of insurance information.

Filing a claim (Rock chip windshield example)

  • I’ve had vehicle insurance for over a 15 years and have only filed a claim once on a (significant) rock chip on my windshield.
  • To determine if my rock chip was worse enough to require a full replacement, the “quarter test” was used. If my rock chip was larger than a quarter (including the splintering broken glass), then it was to be replaced (it was). If it was smaller than a quarter, they would only fix the rock chip.
  • I chose to have the work done at a Toyota certified dealership (which was next to the largest dealership in the world).
  • My deductible was $250 (and at the end of my claim, I decided to pay a few more bucks a month to get my deductible down to $100 since 4Runners are notorious for rock chips on the windshield).
  • Throughout the process, it was important to me to state that I wanted an OEM windshield since it was a newer vehicle and it had safety sensors and I wanted an original replacement. Since my vehicle was purchased within the past few years, they replaced OEM without any question (this is their normal protocol).
  • After the windshield installation, a calibration was required for the sensors.
  • The process looked like this
    1. File a claim with an Adjuster.
    2. Schedule an Appraiser to see windshield damage (since this happened during COVID-19, the Toyota Collision Center had someone take photos and they sent it to my Appraiser).
    3. After the Appraiser told my Adjuster how much would be covered, we could begin the process.
    4. Once the Collision Center knew the check was in the mail (and they had proof of payment via email), they began the work.
    5. Collision Center did the repair (I was careful to let them know not to scratch anything replacing the windshield, I also took before and after pictures of the entire vehicle, especially around the windshield)
    6. The Adjuster / Insurance company covers the calibration only after they see the calibration was done from the Collision Center.
  • Throughout the process, I was in the middle of every conversation to ensure everything moved quickly and appropriately.
  • I communicated to the Toyota Collision Center that I wanted OEM windshield and while it may have not mattered, because I went to a reputable collision center, they were already on a first name basis with my Insurance Appraiser.
  • I requested the Collision Center not give the vehicle a complementary car wash.

Misc notes

  • Changing your policy in the middle of your billing cycle could result in a prorated monthly premium which may be different than normal costs.

Home owners / renters insurance

  • Can be used in the unfortunate event of theft on the trails. If someone breaks a window and steals personal property, the broken window can be coverage by your car insurance. Stolen personal property can be covered by your home owners or renters insurance.