Insurance World

Car insurance is basically insurance that drivers can purchase for any kind of vehicle in order to protect against losses sustained in traffic accidents. Auto insurance policies are, in reality, a bundle of different coverages. This insurance will usually cover the insured party, the insured motor vehicle, and any third parties involved. Different policies will identify the situations in which each of these entities is covered.

Below are the specific coverages involved when you purchase car insurance.

- Liability Insurance: Liability coverage is the most basic and foundational coverage in car insurance policies and is required in most states. This coverage ensures that if you are the one at fault in an accident, your liability insurance will pay for the physical injury and property damage expenses of any third parties involved. This coverage includes legal bills. Remember that third parties can sue you for “pain and suffering” damages. Minimum insurance may not sufficiently cover you in more extreme cases, which is why many people recommend that drivers purchase more than the state minimum required. Liability coverage limits are usually conveyed with three numbers. For example, liability limits of 20/50/10 indicate that there is coverage of $20,000 in bodily injury coverage per person, $50,000 in bodily injury coverage per accident, and $10,000 in property damage coverage per accident.

- Collision Coverage: In the case that you are in an accident, collision insurance will pay for the repairs that your vehicle requires. Collision coverage is usually the most expensive coverage that you will have to pay for. Insurance companies will declare a vehicle “totaled” or a “write-off” if the replacement would be cheaper than the repairs needed.

- Comprehensive Coverage: This coverage will pay for any damages to an automobile that were not caused by an accident. Qualifying damages include damages arising from carjackings, vandalism, natural disasters, and hitting an animal.

- MedPay, PIP, and No-Fault Coverages: MedPay will pay for the medical expenses of you and anyone else in your car after an accident, regardless of whose fault the accident was. PIP (Personal Injury Protection) and “no-fault” coverages are other forms of medical payment protection. They are broader than MedPay and may be required in certain states. These expanded coverages cover child care and lost wages.

- Uninsured and Underinsured Motorists Coverages: UM (Uninsured Motorists) coverage will pay for injuries you have sustained if you are involved in a hit-and-run by a driver who does not have auto insurance, and is mandatory in many states. UIM (Underinsured Motorists) coverage will pay for you if the driver who hit you creates more damage than their liability insurance can cover.

- Supplemental Coverages: Rental reimbursement is an add-on that will cover rented vehicles in case of damage or theft. Auto replacement coverage ensures that your automobile will be fully repaired for replaced even if the costs are more than its depreciated value. Coverage for towing and labor covers you in case of an auto failure on the road where towing is necessary. These supplemental coverages are usually offered as separate items or included in larger policies.

“Those magnificent men in their flying machines…” Ever since the Wright brothers pioneered our ascent into the skies we have strived to fly higher, faster, further with aeronautical advancements surpassing one another at an ever-increasing rate.

Taking to the skies is, of course, much more than the romantic notions upheld in quaint versions of “Up, up and Away” or “Come fly me, let’s fly, let’s fly away…” It is, for most aircraft owners, a significant part of their livelihood and not to be contemplated without the proper insurance.

Aviation insurance is different from other forms of insurance in that it is very subjective. Due to the vast array of aircraft types, uses and pilot experience, policies should always be specifically tailored to suit the unique requirements of each individual applicant. For this reason it is recommended that a broker, specialising in aviation insurance be engaged to arrange cover.

When applying for aviation insurance, several matters will be taken into account including:

• Sum insured: Aviation policies are divided into

i. Hull: The loss of or damage to the aircraft.

ii. Liability: Loss of or damage to property belonging to others and/or bodily injury to others as a result of the insured’s negligence

Aviation insurance is based on “agreed value”. This means that, in the event of a total loss in respect of the hull, the amount agreed to in the policy is what will be paid upon acceptance of the claim.

It is vital that the aircraft be insured for its true value as major difficulties can arise for the owner if the amount is under or overinsured. For example, if an aircraft is grossly underinsured, the agreed value will not be enough to enable the owner to replace it.

In the case of overinsurance, the insurer may decide to approve a lengthy repair process, costing more than the market value but less than the agreed value. This will result in major delays to plans of getting “back in the air”.

Liability is a different issue with settlements determined in most large cases by the courts.

• Type of aircraft: Generally, helicopters cost more to insure than fixed wing aircraft. Here in Australia, this is partly due to the manners in which they are employed, for example, mustering livestock and heavy industrial use.

Helicopter accidents are also more likely to result in a total loss of the aircraft than fixed wing accidents. What would seem a relatively minor “heavy landing” in a fixed wing aircraft would most likely write-off a helicopter.

The best way to ensure the lowest price possible is quoted for the aircraft, fixed wing or rotary, is to be clear with the insurer exactly what it will be used for. For business owners, it may be worthwhile considering whether diversifying from the central business function is worthwhile if diversification results in more hazardous usage of the aircraft.

• Pilot Experience: Pilot experience and qualifications are the most important aspects of determining the amount of the premium and level of coverage. In some cases, cover may not be extended if the pilot has not enough hours in the air logged.

If any persons other than the owner are to be flying the aircraft it is the owner’s responsibility to ensure all details regarding additional pilots be accurate and up to date. Inaccurate information can lead to a claim being rejected. There are basically three types of pilots able to fly the insured aircraft:

i. Owner: Self explanatory

ii. Open Pilot Warranty: The Open Pilot Warranty (OPW) is the minimum standard of requirements that must be met in order for a pilot to fly the insured aircraft. Although names of OPW pilots do not have to be notified to the insurer, it is crucial to ensure that all OPW pilots meet the requirements for the insured aircraft. Remember that the OPW for one type of aircraft may not be satisfactory for another.

iii. Named Pilots: These are persons you will be permitting to fly the aircraft but who do not meet the OPW standards. Using Named Pilots will generally mean a higher premium.

It is useful to consider the insurer’s position here. An aircraft is a high level of risk to the insurer. In order to underwrite that risk it must be worthwhile. Since most aircraft accidents are statistically due to pilot error, more premium must be charged for less experienced pilots to justify the risk.

Once cover is granted, renewal after one year is not always automatic.

As the renewal date approaches, cover is re-evaluated along with the premium. This can have a positive outcome as pilot experience and any additional training undertaken will be considered when calculating the new premium.

Overall, the main issue to be understood is that all information given regarding the aircraft to be insured and its pilot(s) is to be as accurate and up to date as possible. Whether or not this leads to a premium one may deem “cheap” is irrelevant. What is relevant is that the premium will be a true reflection of the risk.

And that is as insurance should be.