ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Monday, October 14, 1996 TAG: 9610150146
SECTION: MONEY PAGE: 6 EDITION: METRO
SOURCE: MAG POFF STAFF WRITER
Matthew Stegle, an underwriting manager at Allstate Insurance Co.'s regional office in Fairfax, said it obviously costs more to insure a Corvette than a Geo because the cost to repair those cars from collision damage is dramatically different. And that coverage is one of the most expensive components of an auto policy.
You can, of course, lower your premium by taking a higher deductible for property damage, thus bearing some of the risk for minor mishaps.
Families who have a teen-age driver in the house know they pay a lot more for auto insurance than do a couple of empty-nesters. Stegle said insurance companies have actuarial data showing that a 16-year-old with no experience is going to have more accidents than will an adult with years behind the wheel.
Figures from the Virginia Corporation Commission show that an unmarried 20-year-old male will pay more than twice the premium of a married 45-year-old adult. Driving records matter as well in setting premiums.
So does your place of residence. People in the Roanoke Valley, for instance, pay a lot less than drivers in heavy-traffic areas such as Northern Virginia, Richmond and Tidewater, even when they buy identical protection.
The bigger the city, the greater the congestion and number of collisions, Stegle explained. Some Roanoke-area rates are lower than in rural areas on the theory that in the country, he said, people drive faster so the accidents are more severe. City folks, on the other hand, report more thefts and break-ins.
When you register a vehicle in Virginia, you must prove your financial responsibility. You can do this in one of three ways:
You can certify that your car is insured by a company licensed to do business in Virginia.
Your policy must provide for the state's minimum limits of liability: $25,000 for injury or death of one person; $50,000 for injury or death of two or more people; and $20,000 for property damage.
Some companies sell policies that lump these into a single category. If you buy this, the minimum is $70,000 although you can obtain coverage up to $1 million.
Both Stegle and the Virginia Corporation Commission said this is not enough because a $100,000 verdict is not at all uncommon these days, and many jury awards are much higher. You will be personally liable for the difference between your coverage and the verdict.
Stegle said that $25,000 "is nothing" if you injure someone. Although he had no statistics , he said that the majority of car owners who buy from Allstate purchase limits of $300,000 for injury to one person and $350,000 to two or more people. The cost is not that much higher, he said.
You can pay the $400 uninsured motor vehicle fee.
This fee does not provide you with any insurance or any type of protection whatever. It just permits you to drive for a year at your own risk. If you injure or kill someone in an auto accident, you could lose your home, your wages and any other assets you might own.
If you own vehicles used in a business, you can certify self-insurance or post a surety bond. This is not an option for individuals who drive. Nor does it provide any insurance or other protection.
An auto insurance policy is made up of several different sections.
LIABILITY COVERAGE
Liability coverage must be included in all auto insurance policies sold in Virginia. It comes in three parts: bodily injury, property damage and uninsured (or underinsured) motorist coverage. This is often called a family auto policy.
Bodily injury insurance protects a person you injure, not you or your car.
If you cause an accident injuring other people, it protects you against their claims for medical expenses, lost wages, pain and suffering and other losses. It will also pay if the accident was caused by a member of your family living with you or by a person using your car with your consent. The insurance company must provide you with a legal defense if you are sued because of an accident.
Property damage liability insurance pays for any damage you cause to the property of others, such as a crushed fender, broken glass or a smashed wall or fence. You also have coverage if your car was operated at the time by another person who had your consent to drive it.
Uninsured motorist coverage, on the other hand, protects you. It will pay if you are injured by a driver who does not have insurance coverage or whose liability limits are insufficient. It also comes into play if you are injured by a hit-and-run driver.
This coverage ensures that money will be available if the other driver is responsible for losses that are uninsured. It will also pay if the other driver is underinsured. The other driver is personally responsible in such cases, of course, but he may not be able to pay you.
The total amount you can collect from both sources cannot exceed the amount of coverage you have purchased. The minimums are the same as for liability coverage ($25,000/$50,000/$20,000), but you can buy extra protection.
OTHER TYPES OF AVAILABLE COVERAGE
You can purchase other types of protection, but you are not required to buy them under the law.
Collision and comprehensive coverages pay for repair or replacement of your car regardless of who was at fault in the accident. Although the law doesn't force you to buy it, a bank or other financial institution may require this coverage when you borrow money to finance an auto purchase.
Collision coverage pays if your car collides with another vehicle or some object, such as a tree, or if it overturns. Comprehensive coverage pays for damage from other causes such as fire, vandalism, water, hail, glass breakage, wind and falling objects. This is your source of help if a thief steals your car or some part of your car such as the battery or tires.
If you have this coverage, it will extend to a car you rent.
Medical expense benefits coverage pays the medical or funeral expenses for you or others injured or killed in an accident while riding or driving your car even if you caused the accident.
It will also cover you or members of your family if you are struck by an auto while walking or while riding in another auto. This coverage will provide benefits to anyone - a carpool mate, a friend or a neighbor's child - injured in your car.
Loss of income benefits coverage pays you, your family or others riding in your car for loss of income up to $100 a week for a period of up to 52 weeks.
Rental reimbursement coverage will pay you for the expense of renting a substitute vehicle if your car is out of use for longer than 24 hours because of a collision or comprehensive loss.
You can also buy coverage to reimburse you for the expense of paying a rental car agency for the loss of use of its rental car as the result of an accident. repaired.
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