Thinking Out The Costs Of A Car Accident

December 9th, 2010

When considering a car accident, there are a number of different factors to account for when tallying the total costs. The potential costs of an accident play heavily into the decision making process with regard to how much and what kind of insurance package to purchase. Purely in terms of damages to the policyholder which might result from a car accident, there are three obvious types of loss.

Damage to The Insured Vehicle

Physical damage may result to the insured's vehicle due to a collision, theft, vandalism, fire or for many other reasons. A policyholder who wishes to be protected against damage to his vehicle should select both Collision and Comprehensive insurance as part of his policy. Doing so will ensure that the customer's vehicle is protected against physical damage (except versus exclusions listed in the policy), and that the only out of pocket cost to insured will be his deductible.

If the insured does not have Collision and Comprehensive insurance, then his insurance company would not pay for damage to his vehicle. It is likely that the policyholder would be responsible for the entire cost of repairs or vehicle replacement when his vehicle sustained damage.

Rental Expenses

Another potential cost of an accident is the rental expense incurred while the insured vehicle is being repaired. If the policyholder has purchased Rental insurance from his insurance company, then the insurer would pay for the insured's rental vehicle while the insured auto was being repaired.

However, if the insured has experienced a car accident which left his vehicle unsafe to drive, and had not paid the premiums for Rental insurance, then a rental vehicle would be the customer's financial responsibility. The rental bill would become another cost of the accident.

Bodily Injuries

If the insured or his passengers are unfortunate enough to be injured in a car accident, then they may have costs in the form of medical bills or time lost off work. Car insurance companies sell two kinds of insurance called Medpay and Personal Injury Protection (PiP), which pays for medical bills and/or time lost off work due to injuries sustained as the result of a car accident. Without Medpay or PIP on his policy, the customer or his health insurance carrier would be responsible for the medical bills.

Of course, it is possible that a third party may have caused the accident and would therefore be liable for all of the insured's losses. However, it would still be necessary to get the other insurance carrier to pay for the insured damages. All of the costs of an accident should be taken into consideration when a customer is thinking about insurance and car accidents.

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