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HD Insurance Blog


Understanding Auto Insurance

Auto insurance is something we see a lot of marketing for. It seems like we can’t even make it through one commercial break without seeing an ad from one of the major companies anymore. They send us letters, emails, pop ups while we’re browsing the internet and even show up on our Facebook and Instagram feeds. Auto insurance is a big market, it’s legally required in all fifty states and required by almost every lender, so if you’ve financed your car, chances are you have “full coverage.”

What we’ve found is that because auto insurance is required, not many people enjoy discussing it which creates confusion and uncertainty in the event of a claim. The term “full coverage” is just something people know they’re required to have but rarely fully understand. It’s easy to assume that because we have insurance, we’re covered no matter what, even if we have the bare minimum coverage required by the state that we live in. Rarely is that minimum coverage enough to cover most claims these days, as vehicle values continue to go up, so does the total damage amount in car accidents.

The requirement in Idaho is that you have liability limits of 25/50/15 which is $25,000 per person, $50,000 per accident and $15,000 in property damage liability. We’ll break down what that means for you; the limit of liability is how much the insurance company pays when an accident is your fault, making you liable for the damages. The 25/50 applies to medical payments and vehicle damages, the 15 for property damage applies to actual properties, buildings, power lines etc.

A 25/50 liability limit may seem like a lot of money but take into consideration the average price of a vehicle, $34,968. We’ll give you an example of why we believe that buying the minimum required amount of insurance is the worst thing you can do. You’re driving down the road and lose control of your vehicle, you hit a mid-sized SUV that swerves into a luxury sedan. The average mid-sized SUV is worth $37,370 and an average luxury sedan is worth $56,202.

In this accident, the drivers of both vehicles were injured and needed to be taken to the hospital in an ambulance. An ambulance ride in Idaho will start at around $1,200 if not being covered by health insurance, which it wouldn’t in the event of an accident. They both need medical treatment totaling over $10,000 each, which is common when health insurance isn’t paying the bill. Now we understand that there are plenty of accidents that aren’t quite this bad but, for the sake of argument, we wanted to do a near worst case scenario.

Now let’s do the math, when adding up the costs of the vehicles, the ambulance rides and the medical treatments, it equals $115,972. If you have the minimum required limits you will end up being forced to pay $65,972 because the maximum your insurance company will pay for one accident is $50,000 and that will also leave you without a vehicle if yours was totaled. I don’t know about you but I don’t have that kind of money sitting around just in case I need it. This is why we never recommend, or even sell, the minimum required limits. We would never want to see one of our clients go through the years of struggle that it would take to break free from that kind of financial debt.

At HD Insurance our number one priority is making sure that our clients are not only covered adequately but also educated on why they need to be. Insurance isn’t something most people think about, only when they know they need to buy it or when they get into an accident. The internet market has taken out the counselling people used to rely on to know that they were covered and what the terms of their policy mean. People have started shopping solely on the price without considering the value.

This is something we believe in, the difference between price and value. We’ll never advertise that we have the lowest price for insurance but what we do advertise is the considerable value our clients get when choosing us as their agent. We spend more time on each client after the sale than we do obtaining new ones. We act as a point of contact between our insureds and the insurance carriers we place them with, if there’s something we’re able to do, we do it. We have over 25 years of experience in the insurance industry and use it to help you, the customer or even someone just looking for advice, feel confident that you’re covered.

Car accidents are stressful enough without wondering if your insurance company will cover the costs or finding out that they won’t because the coverage they sold you was inadequate. Contact us today and we’ll be happy to look at your current policy to help you understand whether your coverage is enough. We provide free quotes for all our services because we believe in helping those in our community without adding on unnecessary fees or charges. We’re very proud of the work that we do, let us show you why.