Top 5 Insurance Mistakes

Many times the only reason that people obtain insurance is because it is required. To obtain a home mortgage, the bank will require you to obtain homeowner's insurance. To drive in the United States, it is required to obtain some type of car insurance. Unfortunately, many see insurance as an unnecessary expense and do not pay much attention to the coverages they are obtaining or not obtaining. Below are 5 common insurance mistakes made by many.

1. Insuring a home for its market value and not the cost to rebuild. If the loan is higher than the cost to rebuild, then the bank will require you to insure the home up to the amount you owe. But if the market dips, like it has in recent years, the cost to rebuild will be higher than what you paid for the home. You need to have the home insured for at least the cost to rebuild or you could be left with a hefty bill to pay if your home burns down.

2. Only obtaining state-minimum liability limits on your car insurance. The state minimums will not sufficiently cover you if are involved in an accident involving significant damage. "I have never been in an accident and I don't plan on ever being in one," is a response I hear often. No one plans on being in an accident, but you cannot predict the future. State minimums will not be sufficient for many accidents.

3. Refusing to buy renter's insurance. I was counted among the many that felt renter's insurance was a waste of money, until I was robbed. Now I understand that renter's insurance provides peace of mind for a very minimal expense.

4. Lacking the understanding of what is covered. Most insureds do not take the time to read through the policies they have just purchased. To make sure you are insured correctly you need to actually read the policy and, if necessary, ask for clarification from your insurance agent.

5. Selecting insurance based on name recognition. Johnson Controls Inc. is a leading manufacturer of automotive interiors for cars and light-trucks and is worth 28 billion dollars, but have you heard of them? Many have not, but does that mean they are not excellent at what they do? Of course not. Just like Johnson Controls, there are many excellent insurance companies that you have not heard of, but that doesn't mean they are not excellent insurance companies. AM Best ratings, online reviews, and personal referrals are all excellent ways of researching an insurance company. I wouldn't recommend choosing an insurance company based on the entertainment value of their commercials.

Insurance protects you from financial ruin, if you are sufficiently covered. Don't make the five common mistakes above and you'll be well on your way to staying ahead of trouble. You may not like paying your insurance bill, but you'll be grateful you are properly covered if something does happen.

Top 10 Myths of Auto Liability Insurance

Let's address the top 10 myths of automobile liability insurance and how they relate to car accident claims. As a car accident attorney, I come across these issue quite frequently. This post is limited, however, to auto liability insurance and is not intended to address other types of insurance such as comprehensive and collision coverage. Let's take a simple auto accident as our example. Let's say you were involved in a car wreck where the other driver is at fault. The other driver gives you their insurance information. You contact the other driver's insurance company and report a claim for personal injury and car damage. This is called a third-party liability claim. You are a "third-party" because you are a stranger to the insurance policy between the other driver and their insurance company. It is a "liability" claim because you are claiming that the other driver is legally liable for the accident. Now that you understand the relationships between all the parties to the claim, here are my "Top 10 Myths" of liability insurance.
Myth #1. The insurance company is there to protect me. Wrong! Liability insurance is purchased by the policy-holder in order to protect the policy-holder against the injured person's claim. Since you are claiming that the other driver is liable for the accident, then the other driver's insurance company is there to protect the other driver against your claim. That why it is called "liability" insurance. It is purchased to insure and defend the other driver for their liability; not to protect the injured person.
Myth #2. I have to provide a recorded statement. You do not have to provide a recorded statement in a liability claim. As described in #1 above, the liability carrier is the other driver's insurance. Since they do not have any legal duties to you, you have no legal duties to them. The only reason the insurance company wants to take your recorded statement is because they want to use it against you in the future. If they are really interested in investigating the facts of the accident, they can just talk to you without recording the conversation. Don't let the insurance company tell you that you are required to give a recorded statement. You are not!
Myth #3. They have to provide a rental car. You are not entitled to rental car. However, they may decide to provide you with a rental if their insured's liability is fairly clear. They do this because they want to keep you happy. Otherwise, you might hire an car accident attorney which is something the insurance company always wants to avoid.
Myth #4. I have to use their repair shop. No. The Texas Insurance Code specifically provides that the insurance company cannot tell you where to get your car repaired and what parts to use. If you have trouble with the insurance company with these matters, the best thing to do is take your car to the body shop of your choice and give the shop manager the adjuster's contact information. Let the shop deal with the insurance company since they deal with these things on a daily basis.
Myth #5. I have to provide a medical authorization. Do not give the insurance company any authorization, especially a medical authorization. They normally send one to you with the typical claims paperwork and ask you to sign it. You are not required to do so. If you do, then you give the adjuster global permission to obtain any of your past medical records. It's just another ploy to dig up dirt on you. You are better off collecting your own medical records and bills that are related to the accident and sending them to the adjuster yourself.
Myth #6. I have to treat with their doctor. If you are injured in an accident, then it's your decision which doctor use. You are not required to go to the doctor recommended by the claims adjuster. You can go to the hospital, minor emergency clinic, family doctor, or any other doctor you choose to see.
Myth #7. The adjuster can close my claim. Sure they can close your claim. But, so what!?! Who cares!!! The only time limit applicable to your claim that is of any real consequence is the legal statute of limitations. In most personal injury cases, Texas law gives you two years to either settle your case or file a lawsuit. Don't let the insurance company pressure you into working on their time schedule. They want to pressure you to get the claim settled early before your medical bills get too high or distract you from hiring a lawyer.
Myth #8. They have to make a fair settlement offer. The insurance company has no duty to make any kind of settlement offer. However, there are two main factors that might (and I do mean "might") prompt an adjuster to try and settle your claim. First, insurance companies like to close claims in order to keep their workload and legal exposure at a manageable level. Second, if they don't try to settle, you might hire a lawyer. If you do, then the insurance company knows the claim may cost more to settle.
Myth #9. I can sue the insurance company directly. In an auto liability claim, it is the other driver that caused your injuries or damages. Therefore, your lawsuit is legally against the other driver. Some states do permit direct actions against the insurance company in a liability claim. But Texas law does not.
Myth #10. Getting a lawyer will hurt my claim. Of course not. Insurance companies would like you to believe that it would hurt your claim. They will tell you that a personal injury attorney will take a percentage of your settlement and you will end up with less. However, there are so many other factors that go into calculating attorneys fees than what the adjuster tells you. Besides, a lawyer is on your side fighting for your rights. The adjuster is on the other driver's side trying to defend against your claim. Who should you believe?