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Why Buy Auto Insurance?

If you are in an auto accident and you are at fault, you could be held liable (legally

responsible) for bodily injury or property damage resulting from that accident. If a

lawsuit is brought by the injured party, a court could order that your assets be used

to pay for the resulting damages that are awarded. Even for an accident where you

were not at fault or were only partially at fault, the costs of defending yourself

against a legal action could be very high.

What if you are involved in an auto accident where the other party is at fault, but

they have no money, no insurance, or inadequate insurance and you are injured?

Even regarding an accident where you are not at fault you could incur substantial

medical and other costs. In New Hampshire, Auto Insurance Policies provide

coverage that would respond to such situations.

And don’t forget the damage to your own auto as well. You will need to repair your

auto in the event of an accident or other type of property damage loss. This will be

paid by you unless you have the proper coverage available under Auto Insurance.

New Hampshire Motor Vehicle Laws do not require you to carry Auto Insurance, but

you must be able to demonstrate that you are able to provide sufficient funds to

meet New Hampshire Motor Vehicle Financial Responsibility Requirements in the

event of an “at-fault” accident. If you are unable to meet these requirements your

driving privileges in New Hampshire may be suspended. For more information on

financial responsibility requirements you can refer to New Hampshire Statute RSA

264 or contact the New Hampshire Division of Motor Vehicles at 603-271-3101 or

www.nh.gov/safety/dmv.

 

What Coverage Should I Buy?

 

Liability Coverage pays for damages to others for which you are legally liable. If you

buy Auto Insurance in New Hampshire, the minimum limits available for Liability

Coverage are 25/50/25, or $25,000 per person for bodily injury, up to $50,000 if 2 or

more persons are hurt, and up to $25,000 for property damage.

Liability Coverage does not pay to repair damage to your own auto. This type of

insurance is called Collision (damage due to contact with another auto or object)

and Comprehensive (damage incurred due to reasons other than a collision)

Coverage.

Per New Hampshire Statutes, NH RSA 264:16, if you buy Auto Insurance for

personal use, you must also buy Medical Payments Coverage. Medical Payments

Coverage pays for medical expenses incurred as a result of an automobile accident

(regardless of fault). By law, you must buy at least $1,000 of Medical Payments

Coverage.

 

CHOOSING THE COVERAGE YOU NEED

 

Per New Hampshire Statutes, NH RSA 264:15, if you buy Auto Insurance you must

also purchase Uninsured Motorists Coverage. Uninsured Motorists Coverage

provides coverage should injuries result from an accident involving an at-fault

uninsured driver, or a hit and run driver. It also protects against injuries caused by

insured drivers whose coverage is less than your own. In New Hampshire,

Uninsured Motorists Coverage must be provided at limits equal to your Auto

Liability Coverage.

You do not have to buy Collision Coverage or Comprehensive Coverage to protect

your autos, unless you are obligated by your lender. If you do not purchase

coverage for either or both of these options, you will need to personally fund any

repair to your auto made necessary due to collision with another auto or a normally

covered non-collision loss.

 

Common Types of Coverage Available

 

The following types of coverage are generally available in New Hampshire:


Auto Liability Coverage – This provides coverage for liability incurred as the

result of an auto accident caused by you. It also covers expenses for a lawyer to

defend you should that become necessary. There are two kinds of liability

coverage: Bodily Injury and Property Damage

Bodily Injury Liability Coverage – This coverage pays for claims made

as the result of injury to others resulting from an accident you cause. It

compensates others for pain, suffering and economic damages, such as

lost wages.

Property Damage Liability Coverage - This coverage pays for damage

to another auto or property of others incurred as the result of an auto

accident caused by you.

Uninsured or Underinsured Motorist Bodily Injury Coverage - This

coverage pays for injury to you if you are involved in an accident involving an

automobile driven by an individual who is uninsured or underinsured and who is

found to be liable for your damages.

Medical Payments Coverage – This coverage pays for medical costs incurred

as a result of injuries sustained in an accident without regard to fault. This

coverage will pay for covered expenses up to one year (this time-frame may

vary by insurance company) following the date that the injuries are sustained.

Collision Coverage – This coverage pays for damage to your auto when it

collides with another auto or object. This coverage is generally required by a

lender, if a loan is obtained on your vehicle.

Comprehensive Coverage – This coverage pays for damage to or the

loss of your auto from causes other than collision (for example: hail,

vandalism, fire, theft, etc.). This coverage is generally required by a

lender, if a loan is obtained on your auto.

Towing and Labor Coverage – This coverage reimburses you for

towing expenses when your auto becomes disabled and requires

roadside assistance.

Rental Reimbursement/Transportation Expenses – This coverage, if

provided, pays a specified amount for help in covering the necessary

rental of a substitute auto while yours is being repaired. This coverage

applies for a limited period of time and is referenced in your policy

conditions.


How Much Coverage Should I Buy?


An immediate problem in determining how much

coverage to buy is that no one plans to have an accident. It is a “what if”

consideration. Unless you have an accident, you will never experience the benefits of Auto

Insurance. Predicting the future is impossible. You can not tell if and when

you might be involved in an accident, how much damage there might be, or if

the other driver will be insured. The Auto Liability Coverage Limits you

choose should be high enough to protect you from the potential loss of your

assets due to Bodily Injury and Property Damage Claims that may be made

against you as the result of an accident. Bodily Injury and Property Damage Claims can easily be higher than

minimum coverage levels since autos now cost many thousands of dollars

and medical costs have soared. To choose the level of coverage for Auto

Liability and Property Damage, think about what you could lose. In New

Hampshire, Uninsured and Underinsured Motorist Coverage would be

included in any purchase of Auto Liability Coverage as coverage is provided

at the same limits.

Even if you do not yet have significant assets, having adequate coverage

would help avert incurring significant debt that might make obtaining assets

in the future more difficult.


 

Some Factors Companies Use to Determine Rates Include:

 

 

 

 

Age, Gender and Marital Status – (i.e., a single 17 year old male vs. a

married 45 year old female). Historical trends indicate that certain groups of

drivers have more accidents. The greater the chance a group of drivers will

have a loss, the higher the cost of the premiums (or “rating”) for that group.

Coverage Limits - The price that you pay will reflect the level of coverage

that you purchase. Higher coverage limits cost more than lower coverage

limits.

Household Members - The ages and driving records of other drivers in

your household will likely affect your premium. If you have teenage drivers

and your policy covers them, your premium will increase for that reason

whether or not they ever or rarely drive your autos. It may be possible to

avoid many of the effects on your policy premium, if the teen driver buys

their own policy. It is critical that you notify your insurance company of all

licensed (or permit) drivers in your household that may be considered to be

an exposure under your Auto Insurance Policy.

Location - The price that you pay will be affected by where you garage

and drive your car. Drivers in heavily populated areas often pay more than

rural drivers because of more traffic activity and an increased exposure to

accidents, theft, and vandalism.

 

FACTORS AFFECTING THE PREMIUM

 

 

Type of Auto - The price that you pay will be affected by the characteristics of

the auto that you drive. Model (standard versus high performance, for instance),

model year, and value of your car influence the premium charged. Some autos

cost more to insure because they are more easily damaged, more expensive to

repair, or more likely to be stolen.

Use of the Auto - The price that you pay will be affected by how your auto is

used. For instance, your daily usage may exceed set criteria for mileage (such

as commuting a long distance to work each day).

Credit History – Many companies review your credit history. Insurance

companies may apply adjustments to your rate that take your credit score or

attributes of your credit history into consideration.

 

Discounts:

 

 

 

 

You may be eligible for discounts which are part of the insurance company’s

rating plan that can serve to reduce your premiums. Be sure to ask about

possible discounts when buying or renewing your auto insurance policy.

Examples of possible discounts are:

 

Anti-theft devices

 

- This may be offered as a discount on your Comprehensive

Coverage Premium for devices that discourage theft or vandalism.

Auto/Home Packages – This may be offered if you buy both your Auto and

Homeowners Policies from the same insurance company.

Good Driver – This may be offered to policyholders who maintain a good

driving record.

Good Student – This may be offered to youthful drivers who maintain a

specified grade point average.

Low Annual Mileage – May be available for vehicles operated less than a

specified number of miles per year.

Multiple Autos – This may be offered when the same company insures more

than one auto in your household.

Not all companies offer all of the discounts listed here. Some companies may

offer more or less discounts than those listed above.


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