Posts Tagged ‘commercial vehicle insurance’

When Should I Drop Collision Coverage?

Friday, February 3rd, 2012

This is a question our clients commonly ask. When does it make economic sense not to insure your car against collision?  Here are our slightly oversimplified rules.

“The 3 Rules of  Tens”

We’ve created these simple rules to help you consider when it’s less risky to remove collision coverage from your Maine auto insurance policy:

  • TEN PERCENT – When collision coverage costs more than 10% of the book value of your vehicle plus your collision deductible.  For example, if the book value of your vehicle is $3,000 and your collision deductible is $500, consider removing collision coverage if it costs more than $350 per year for that vehicle.
  • TEN YEARS – If your vehicle is more than 10 years old, it may no longer have enough value to warrant insuring.
  • TEN TIMES – If you have 10 times your collision premium in a “rainy day fund”, you probably have enough of a cushion to put a sizable down payment on a replacement vehicle. In the example above, if your “rainy day fund” has at least $3500 in it, you might reasonably risk dropping collision coverage. If you don’t, you would probably need the insurance proceeds to help you make a down payment on another vehicle.

When Should You Keep Collision Coverage?

There are some times when you should definitely NOT drop collision coverage:
  • You have a loan or lease on the vehicle. Your loan or lease contract requires you to carry collision coverage for the length of the agreement.
  • You have only one vehicle. Most multi-car families can limp by on one car while one is in the body shop. But, if you’re a 1-car household, you’ll probably want coverage to rent another while yours is being repaired. Also, you’ll definitely need to buy rental car insurance on vacation if you don’t have collision coverage on at least one vehicle on your policy.
  • You’re worried about being hit by an uninsured driver.  If you have no collision coverage, someone hits you and it’s their fault, their insurance will pay. But, what if you are hit by an uninsured driver? Obviously, there’s no one else to pay; if you don’t have collision coverage, you’re on your own to repair your vehicle.  Maine’s ratio of uninsured drivers is quite low: 4%. But, we’re also inundated with drivers “from away” during tourist season. Many other states have much higher rates of uninsured drivers.
As you can see, there is no single answer to the question of when to insure collision or not. It depends on the vehicle, your financial situation, how much collision coverage costs, and your  own risk tolerance.  If you live in Southern Maine and have an insurance question, call Noyes Hall & Allen Insurance at 207-799-5541. We represent many different insurance companies, and are happy to help.

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Posted in Car Insurance, Commercial Vehicle Insurance, Motorcycle Insurance, Personal Insurance, snowmobile insurance | 1 Comment »

Does Your Maine Insurance Policy Cover Wind Damage?

Friday, July 23rd, 2010

The National Weather Service confirmed on Thursday what many Mainers knew Wednesday night: tornadoes touched down in southern Maine, causing widespread damage. Our Maine insurance agents have been busy answering clients’ questions about damage ranging from fallen trees to wind damage – even lightning damage. Their first question, of course: “Does my insurance cover my windstorm damage?”

Whether you have Maine homeowners insurance, auto insurance, or business property insurance, the answer is usually “yes”, subject to the level of property coverage and deductible on your policy.

Windstorm Coverage in Maine
A tornado is just wind – vicious, frightening, powerful, damaging wind whirling in a funnel cloud. Many insurance policies cover wind damage to buildings or vehicles. It doesn’t matter if it’s caused by a gale, nor’easter, tropical storm,  hurricane, microburst or tornado. Some limited policies exclude wind damage – again, it doesn’t matter what kind of storm caused it.

Types of Wind and Storm Deductibles
Every property and auto policy has a deductible. On personal and commercial vehicle  insurance policies, wind is covered if you purchase “other than collision” (sometimes called “comprehensive”) coverage.  This coverage varies by vehicle.

Some property insurance policies have specific deductibles for wind. In Maine, it’s common to see these types of storm deductibles (from least to broadest insurance coverage):

  • “Wind Deductible” – Any wind damage is subject to a flat dollar deductible – usually a higher amount than your normal deductible,  or a percent of the amount of your property insurance.
  • “Named Storm Deductible” – Any damage caused by a storm that the National Hurricane Center has given a name is subject to a special deductible (see “wind deductible” above for some examples). Other wind damage is covered, subject to the regular policy deductible.
  • “Hurricane Deductible” – Any damage caused by a true hurricane is subject to the special deductible. Other wind damage is covered, subject to the regular policy deductible (usually a smaller deductible).

Insurance companies have different criteria for underwriting the peril of wind damage. A Maine independent insurance agency has access to many insurance companies, which gives you the most options.

We’re happy to answer your questions about property insurance for your home, auto or business. Contact Noyes Hall & Allen, or call us at 207-799-5541.

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Posted in Business Insurance, Business Property Insurance, Car Insurance, Commercial Vehicle Insurance, Condo Insurance, Homeowners Insurance, Renters Insurance, Weather | No Comments »

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good comments, but overwhelmed by article's context. Ins. agents must serve clients best we can in challenging environment.

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