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Automobile Insurance

Auto Insurance for emergency responders:

  • Car or Truck
  • Motorcycle
  • Trailer & RV
  • Antique & Show Car

Purchasing auto insurance can be an expensive purchase. Erba wants to help make it more affordable for you. To help you make an educated decision about the right auto insurance for you, we want to share with you all of the underwriting factors that affect the cost, the various amounts of coverage available, any requirements in your state, and what insurance companies have the best rate for you.

Underwriting Factors

Before you purchase your insurance, insurance companies will underwrite to assess the amount of risk associated with you, meaning your likelihood to make claims. If you fall into a group with a higher claim history, you will pay more for your auto insurance. Underwriting factors that affect cost are:

  • Driving Record – If you have previous traffic violations and at fault accidents, you will fall into a higher risk group.
  • Marital Status – If you are married,  you will likely pay less than single policyholders as insurance companies typically put married people in a lower risk group than single policyholders.
  • Residence – Where you store your vehicle  (usually your residence) will also affect your rate. People who live in urban areas typically file more claims than those in rural areas.
  • Age and Gender –  Males and teenagers have more accidents than the rest of the population. If you fall into either of these two groups, your rate will be higher than for females or other age groups. A small number of states have prohibited insurance companies from using gender as a risk factor.
  • Use of Vehicle – The higher your annual mileage, the higher the cost of your insurance will be due to your  higher exposure to risk.
  • Type of Vehicle – The type of care you drive as well as its cost will affect the cost of your insurance.
  • History of Prior Coverage – If your insurance has been cancelled in the past because you did not pay your premiums to a prior insurance company your rates in some states might be affected adversely.
  • You may qualify for “better risk discounts.” -Ask your insurance agent about these possible discounts:
    • Multiple vehicles
    • Good student
    • Safety devices – automatic seat belts, anti-lock brakes, air bags, etc.
    • Drive a low amount of miles each year
    • Good driver
    • Anti-theft devices
    • Driver education courses for young and old drivers
    • Auto and homeowners policies with same company
    • Dividends

Types of Auto Insurance Coverage

Depending on the type of legal and financial responsibility system used in your state, you will need to purchase either automobile liability insurance or no-fault insurance.

Liability Insurance

Bodily Injury Liability Insurance protects you against claims filed by other people who are injured when you are at fault. It does not protect you against damage that occurs to you personally or to your car. This type of coverage will  cover their damages including medical expenses, lost wages, and pain and suffering. Also covered are damages caused by an accident when a member of your family living with you is driving or when someone else is using your car with your consent.

When you purchase bodily injury liability, you will be able to select from specific benefit limits. These limits determine how much money your insurance company will pay for any one victim in an accident. It also sets  limits on the amount they must pay for multiple victims. Most states require you to purchase minimum amounts of bodily injury coverage. The greater your coverage, the more your premiums will cost because the insurance company will be assuming a higher risk.

Property Damage Liability Insurance pays for any damage you incur to the property of others such as a dented fender, broken window, or other damaged property. The insurance company will pay the claim whether you were the driver or whether someone else was driving with your consent. You will have the opportunity to set specific benefit limits when you purchase property damage liability insurance. Most states require you to purchase minimum amounts of property damage liability insurance.

Uninsured motorists coverage protects you. If you are injured by a driver without auto insurance or by a hit-and-run driver, this coverage will pay you for your medical expenses. This coverage takes the place of the insurance the other driver does not have, or covers the amount the other driver’s insurance does not cover. You can purchase uninsured motorists coverage with specific benefit limits. Most states require you to purchase minimum amounts of this coverage. This type of coverage does not oay claims to the other driver and may not cover damage to your vehicle.


Each state is required to implement either a tort system or a no-fault system. The liability insurance described above is part of the tort system. For more information about what system is applicable in your state see the chart, “Minimum State Insurance Requirements.” In a no-fault state, your insurance company is required to pay you directly for your losses as a result of injury that occurs in an accident, regardless of who is at fault. If the other driver also sustained injuries in the same accident, he or she will collect losses from his or her own insurance company. You can be sued only under specific conditions, for instance, if you are the driver at fault in an accident that causes critical injuries to others.

Personal Injury Protection (PIP) is the most basic no-fault coverage. This coverage pays for the losses incurred due to injuries to anyone riding in your car a minimum benefit amount per person for injury regardless of fault. The level of benefits varies widely among states. See “Minimum State Insurance Requirements”.

The following coverages are normally included under PIP:

  1. Medical expense benefits include all reasonable charges for hospital,  medical, surgical, professional nursing, optometric,  dental, ambulance, prosthetic services and X-rays.
  2. Rehabilitation expenses benefits include expenses for psychiatric, physical and occupational therapy, and rehabilitation.
  3. Work loss benefit includes coverage for loss of wages up to a specified amount for a specific time period following injury.
  4. Funeral expense benefit includes all reasonable charges up to a defined  amount for funeral services including burial and cremation expenses.
  5. Survivors loss benefit offers a payment to your surviving spouse or dependents up to a predetermined amount for a specified time period.

Residual Bodily Injury Liability Coverage protects your family and anyone else who is in your car with your permission should you be sued due to injuries caused to others. Each no-fault state has defined  thresholds that, if exceeded, can increase the chances of a lawsuit. These thresholds can be based on predetermined dollar amounts, clearly defined injuries and/or death resulting from an accident.

No-Fault does not include property damage liability for damage that you incur to the property of others. If you are at fault in such an accident, you will be held liable and can be sued for these losses. You are required to buy separate collision coverage to cover this risk.

Property Damage Coverage

Property damage is covered by either collision coverage or comprehensive coverage.

Collision Coverage pays for physical damage that occurs to your car due to a collision with an object or another car. This type of coverage can be expensive and is optional. However, it may be required by your lending institution or lessor. The higher the deductible, the more you will save on the cost of coverage. Other details to know include the fact that coverage for collision only pays your financial expenses for repair of your damaged car. If the repair cost is more than the current value of your vehicle the insurer will “total” the car. This means that your insurer will pay you only what the car is worth, not the cost to repair it.

Comprehensive Coverage covers damage to your car that is incurred for reasons other than the result of an accident, such as, theft, fire, severe weather, flood, and vandalism. It is not as expensive as collision coverage and the cost can be reduced as you increase the deductible. While this type of coverage is not required, it may be deemed necessary by your lending institution or lessor.

Optional Coverages

Medical Payments Coverage pays for the medical and funeral expenses for you or others injured or killed in an accident while riding in or driving your car even if you cause the accident. Claims include all reasonable hospital, surgical, chiropractor, X-ray, dental, professional nursing, prosthetic, and funeral expenses. It also pays for expenses incurred by you or members of your family if you are bit by any car while walking or while riding in another vehicle.

Rental Reimbursement Coverage usually covers a specific amount for a specific number of days while your car is being repaired.

Towing Coverage pays the cost of towing your car to the repair shop.

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This website may contain concepts that have legal, accounting and tax implications. It is not intended to provide legal, accounting or tax advice. You may wish to consult a competent attorney, tax advisor, or accountant.