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What kind of auto insurance do you need? - YouTube
Channel: Texas Department of Insurance (TDI)
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Hi everyone I'm Ben Gonzalez and this is TDI.
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Today we're going to be talking about the different types
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of auto insurance, terms you may hear when you're
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out shopping and you weren't
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quite sure what they meant.
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We're gonna help you learn about those terms.
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And joining us today is Nicole Beall
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from our property and casualty area.
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Nicole, what's the first thing
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that consumers should think about when they're out
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shopping for auto insurance.
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Sure. So the first thing is it's not all about price.
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A lot of people want to, you know get the best
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deal and that's great, you should shop around,
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try to find a good rate for yourself,
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but don't cut coverage to get that good price.
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A lot of companies offer different
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things, different options, different limitations.
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Just know what you're buying.
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Okay, so you got to think about your budget.
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but also think about
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the coverage that you're purchasing.
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Exactly.
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So, the law does require all drivers to have
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at the minimum liability,
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but I think there's some confusion there about what
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that actually covers, so what does liability cover?
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So liability covers you if you're at
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fault in an accident it's gonna pay the other person
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for their injuries and for the damage to their car.
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So say you know, you're driving and you
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side swipe someone,
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you didn't know they were in your blind spot
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and you hit them
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That happens.
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All the time.
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Unfortunately. All the time.
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So that's gonna, your liability coverage is gonna pay for
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that person's car, to get that person's car fixed,
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that's going to get them into a rental car
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and it's gonna pay for their injuries too.
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And the, the law provides minimums
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for each accident right?
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What are those minimums?
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So those minimums are, it's $25,000 for
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property damage, that's the damage to their car
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or other structures if you happen to hit something else.
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Then it's $30,000 for the injuries to the other person,
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up to a total of $60,000 for that entire accident.
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So you may hear those numbers refer to as
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is it 25 or 20?
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Usually it's 30/60/25 is what you might hear
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and that's what those stand for.
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So are those minimums enough for the average person
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or should you consider going higher than that?
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Definitely recommend going higher even though
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no insurance is worse
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than minimum limit.
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So minimum limits is what
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you can afford that's better than nothing,
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but usually it doesn't cost,
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you know a few more dollars to double those limits
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and if you think about,
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you know what if that car you side-swept it was a Tesla?
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That $25,000 is not gonna go very far.
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Right.
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So we definitely want to recommend
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increasing those as far as you can.
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consider, what you can afford.
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Again it's a combination of what you can afford,
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versus what you're buying there.
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So that covers somebody else's car that I've
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damaged but liability that doesn't do anything for
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my vehicle correct?
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Correct.
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So what do I get to cover my car?
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So usually what you purchase is collision
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and comprehensive coverage.
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Collision coverage kind of does what it says.
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It pays for your car if it's damaged from
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colliding with anything.
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And then comprehensive coverage covers anything else.
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So that covers...
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anything else?
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Things out of your control. Maybe not anything else,
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but it covers things like theft,
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and it covers things like hail.
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nonaccident kind of things that could happen?
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Yes. Exactly it does cover if you hit an animal,
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so just be aware of that,
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that sometimes not covered by collision.
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I think those terms are some that people
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sometimes cross or get confused comp,
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comprehensive, collision because they,
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they sound the same, they're both long C words,
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but they generally come in a package, right?
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Usually. Most companies offer them together and
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there's a deductible usually.
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They're $500 or a $1,000 deductible.
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So you set that and that helps
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determine how much you'll pay monthly,
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but also what happens after an accident
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Yes, so make sure that deductible that you set
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is something that you feel comfortable paying
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if you had an accident tomorrow.
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And we talked about cost a little bit but,
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when you get into beyond liability,
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into comp and collision and things like that,
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you are talking about higher cost for yourself.
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Yes. It's more coverage so it is more cost,
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but if you have a lien holder
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they might require you to have that,
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so you probably want to budget that.
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And also if
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you know you're in an accident tomorrow, if you can't
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pay to replace your car,
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probably should think about having
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collision and comprehensive on your policy.
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Whether or not you're still paying on the car,
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if you can't afford to replace it you might want to...
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Yeah
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... add that onto your monthly budget.
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Exactly.
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Okay. So that's a little bit about comp and collision
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and the cost increases there.
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Are there other kinds of coverage
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that you might be offered when you start your
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shopping for auto insurance?
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Yeah there's a few others.
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So first of all we know
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that 12% of the cars out there on the highway actually
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don't have liability insurance.
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So if they hit you, there might not be any coverage
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for your injuries or your car.
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That's an uncovered, uninsured driver.
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Uninsured drivers. So it's uninsured or
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underinsured motorist coverage is the name of it.
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Definitely recommend that.
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If you're injured, that pays for you and your passengers.
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It also pays to fix your car.
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Now what's the difference between uninsured and
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underinsured? Is that about the limits again?
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Yeah so it's about the limits again.
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Someone is
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obviously uninsured if they have no insurance.
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If they're underinsured, maybe they just
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have that 30/60/25 that we talked about,
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and that's not enough to cover your
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full amount of damages so.
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So that person has their legal responsibilities covered,
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but you're still not made whole so you might want to
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add a little coverage on top of that.
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Exactly, yes.
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Other things that they might
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encounter when they're shopping for insurance.
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Specialty items?
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There's a few other optional coverages.
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So there's a medical payments and personal injury
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protection that covers you and your passengers
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for your medical payments like it says.
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Personal injury...
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Where does that come into play?
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Is that during the uninsured driver is that
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just medical not covered with your
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regular insurance and your comp and collision
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So that, yeah it's not covered under
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your comp and collision, but that's covered,
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that covers even if you're at fault,
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if you're not at fault,
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either way it's just a little bit of
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medical payments coverage
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for you and your passengers.
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Okay.
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And so those are some things that you can consider.
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Lots of different items.
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Again, liability is what the law recovers,
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requires of you,
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but if you want to raise those coverages
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you may have to pay more. But again,
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you may need to you need that coverage.
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So think about those kinds of things,
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like Nicole said at the beginning,
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you can't just go on the bottom line because
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there are situations where you might want that coverage.
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So if you want to learn more about auto insurance you
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can visit our website it's,
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TDI.Texas.gov
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just click on the consumer tab, right the first homepage
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and then after that you'll click on the little car
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and you'll see other videos
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and short articles where you can
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learn about some of the things that we covered.
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If you have a specific
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question about your situation
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or your auto coverage,
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call our help line. That's
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1-800-252-3439
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and you can ask one of our specialists
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a question about that coverage.
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So that's it for today.
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For Nicole Beall, I'm Ben Gonzalez. This is TDI
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