While it may seem criminal for a company to raise your rates if you move to an area with more claims, have a teenage driver, or because you had an accident, there is a lot more to your rates than the insurance company wanting to take a knife and cut out your heart.

Insurance companies pay a lot of money for research and track every bit of claims activity they have on their policy holders. They don’t look at your individual policy and say, “Did you notice Joe in Phoenix Arizona looks like he should be charged more because of (name reason here)? Let’s raise his rates.” In fact, you as an individual are probably not even noticed by the company.

Insurance companies lump you in with a group of people and don’t rate “you” as an individual. The principle is to have a large pool of people pay a little amount each year to pay for the few people of this pool that have large claims. Generally, this is where people get ugly about the idea of insurance because they don’t want to pay for other people’s claims. What they don’t realize is you don’t need to buy insurance for anything…really.

If you want, the state of Arizona requires you to carry liability insurance on your vehicles in case you’re at-fault for an accident. However, you can post a bond or proof of financial stability and put $40,000 away for the state minimums, you don’t need to buy insurance. However, if you want to finance a new car then the lender will require coverage but you can pay cash for your car and not buy insurance.

Now, back to the criminal nature of insurance companies. Here’s a list of some of the important rating factors:

• The zip code you live and garage your cars in
• Your financial stability (aka your credit information)
• Do you have prior insurance and what are your prior liability limits?
• The driver’s ages
• Accidents and claims
• Married or single
• Types of vehicles insured
• Miles driven annually
• Some even use education level and current career as rating factors

This list isn’t every rating factor for all insurance companies but it’s a ‘big chunk’ most companies use to start rating your policy. Credit, prior insurance, and where you live are the big factors to consider when starting to rate your policy and establishing the base rate. Tickets and claims are only discounts or surcharges against that base rate and, while they’re important, they’re not the fist place insurance companies look to start your rates.

This is where it can be very important to shop your rates occasionally. While the company you’re with had great rates when you switched to them, they may have had many losses and other factors that have justified them to creep your rates up over time. There are other companies that may have lowered their rates or have a better loss experience for you and your situation which would allow you to save money today. So, don’t be afraid to shop around occasionally. We make it easy here so take 3 minutes and fill out our quote form to compare your rates.

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After looking this over, take 3 minutes and fill out our quick quote form to get your Arizona Auto Insurance quotes.

You can print or save a copy for your personal use to reference and ask your agent any questions. Naturally, this is written as of today’s laws and does not replace what your policy actually says regarding coverage and limits. It’s simply a useful guide to prepare yourself as you’re shopping for quotes and comparing rates and coverage.

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We often hear, “I don’t have any tickets or accidents, why don’t my insurance rates go down?” Well, Phoenix auto insurance rates are more complicated than just tickets and accidents. Here are some factors most people don’t think about that can effect rates on your car insurance in Phoenix…and all of Arizona.

1. Your credit – I know you’re thinking, “What does credit have to do with insurance?” Well, a lot I guess because it’s a huge rating factor and is often where insurance companies base your tier placement first. This tier placement is then a percentage discount or surcharge off the base rates of your car insurance. So, bad credit equals higher insurance costs. They have proven a correlation that bad credit equals higher claims rates. I don’t know if it’s true but if you’re worrying about money while driving down the road, chance are you’re not totally focused driving.
2. Where you live – Insurance rates are based on geographic conditions. Someone living in downtown Phoenix will probably pay more than someone in North Scottsdale or on the skirts of Chandler, Gilbert or East Mesa. Why? More accidents will occur in downtown Phoenix because there are more drivers there every day. More accidents in your zip code equals higher rates.
3. Glass Claims – Non-fault accidents, including glass claims generally will not cause you to lose your good driver discounts. However, many companies are now counting glass claims as a reason to place you in a higher tier for rating, like credit. This is because those with 1 or 2 glass claims per year are likely to have 1 or 2 in the next couple years. This causes the overall price of insurance to rise for everyone and they want to ‘section off’ those with high glass claims from those without.

Please, don’t yell at me. I’m just the messenger that quotes the rates. I don’t make the rates.

While insurance is there to pay for claims. Be careful on what you claim. If your windshield has a chip in it, repair the chip don’t replace the entire windshield. If you can do anything to improve your credit, do it. If you’re thinking about moving ask you agent about rates in the new zip code.

If you want to compare rates, fill out our easy 1 page quote form and let us shop your Phoenix AZ Auto Insurance for you.

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Shop Arizona Auto Insurance Quotes Here!

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Bodily Injury Liability – This protects you if you’re at-fault for an accident, or someone you let drive your car is at-fault for an accident, and physically injure someone else. Simply stated, you hit someone and they’re hurt. This coverage will pay for the other person’s injuries, up to your policy limits. It will also pay for your legal defense if they sue you. This coverage is required by Arizona law and does not cover the driver of your car.

Property Damage Liability – This is similar to Bodily Injury Liability above but instead of paying if you injure someone, it pays when you damage things from your at-fault accident. This pays for the damage you cause to another person’s car, house, motorcycle, wall, light pole, etc. This is required by Arizona law and does not cover damage to your vehicle.

Uninsured Motorist – This pays you and/or passengers when someone hits you and is at-fault for the accident and they have NO insurance or it is a hit and run accident. This is for your Bodily Injury claims only and does not cover your car.

Underinsured Motorist – Similar to Uninsured Motorist above, this pays you and/or passengers when someone hits you and is at-fault for the accident and they don’t have enough Bodily Injury Liability coverage to pay for your damages. This is for Bodily Injury claims only and does not cover your car.

Medical payments – This pays for reasonable medical and funeral expenses up to the policy limit regardless of fault. It covers you and any persons in, entering, or exiting your vehicle. Basically, someone gets hurt in your car, regardless of fault, the policy will pay for their medical bills up to the policy limit.

Collision Coverage – This pays for damages to your car, truck, motorcycle, etc. from collisions. If you run into a car, a tree, a house, etc. then this is usually the coverage triggered to repair your car. You have to pay the deductible and the insurance will cover the rest up to the actual cash value of the car. You can increase your deductible and lower your premium. Or, you can lower your deductible and increase your premium.

Comprehensive (aka Other than Collision) Coverage – This pays for damages that are not caused by a collision: hail, wind, fire, theft, falling objects, vandalism, collision with an animal, acts of God, and others perils. You pay the deductible and the insurance will pay the rest up to the actual cash value of the car. You can increase your deductible and lower your premium. Or, you can lower your deductible and increase your premium.

Full Glass Coverage Option – This is an option to add to your Comprehensive coverage that eliminates you paying the deductible for a "glass only" claim.

Rental Reimbursement – This pays for a rental car when your car is damaged and covered by a collision or comprehensive claim. The insurance company will pay for a rental car while your vehicle is being repaired up to the policy limits.

Towing/ Emergency Road Service – In the event your vehicle becomes disabled, the insurance company will pay to have your vehicle towed up to policy limits.

As I said originally, this is a very breif description of policy coverage options. I simply want to provide an easy to read, plain English answer to common questions. If any of this doesn’t make sense or you have more questions, leave a comment or give our office a call.

Now for the legal disclaimer – All coverage descriptions here are not intended to, and do not, describe, summarize or represent the actual language, terms or conditions of any auto insurance policy you may purchase. The auto insurance policy you purchase will define and describe the coverage, terms and conditions of your policy. Each insurance company is different and each state’s coverage options are different. Always Read Your Policy and discuss with your agent .

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Most people won’t notice today’s meaning and will simply become irritated because they can’t get their mail. It’s an important day to me because it always reminds me of my grandfather. He retired from the Air Force with over 30 years of service. Listening to his stories of what he did before he shipped off to serve during World War II, what happened during the war, and his travel and life after the war are some of my favorite memories.

He passed away a few months after my son was born. He was the greatest guy I ever knew.

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The other day IIHS announced its list of 2009’s "Top Safety Pick" cars and trucks. Here’s their list by class:

Small cars:
2009 Honda Civic with optional electronic stability control,
2009 Mitsubishi Lancer with optional electronic stability control,
2008-09 Scion xB,
2009 Volkswagen Rabbit

Midsize cars:
2009 Volkswagen Jetta and 2009 Volkswagen Passat

Large luxury car:
2009 Lincoln MKS

Midsize SUVs:
2009 Ford Flex and 2009 Honda Pilot

Small pickup:
2009 Toyota Tacoma

Midsize convertible:
2009 Volkswagen Eos

You can see the list and their criteria for evaluation at the Insurance Institute for Highway Safety’s press release website or visit them at www.iihs.org .

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While speaking with other insurance agents our there I’ve heard many saying this is a great opportunity to switch clients from AIG to another ‘safer’ insurance company. In fact, I can see a lot of people falling victim to scams and lies based on fear. The fear that money in annuities or life insurance products issued by AIG is unsafe and ‘needs’ to be moved.

From everything I’ve read and found on this issue, the insurance side of AIG is completely solvent. AIG has more than enough in reserves to pay its claims and continues to pay millions of dollars each day in claims.

If you have a policy with AIG, what are you to do now?

Well, in my opinion, nothing.

AIG owns 71 US based insurance entities. They’re all solvent. Not one is related to the financial problems they’re experiencing. And, the best part, the money inside these companies reserved to pay claims is protected by law.

So, you can relax and put the anxiety medication away for another day.

If you don’t believe me, check out the AIG Consumer FAQ put out by the National Association of Insurance Commissioners .

If you’re ever in doubt or have concerns or complaints about your insurance company, contact Arizona’s Department of Insurance and check up on them. It’s your money and security at risk.

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3. What Would You Do If Your Home Caught Fire At 12:55 In The Morning?

As a child growing up here, I remember sitting in the garage with my parents watching the wind blow the trees, the lightning electrifying the sky and the rain soaking the yard. So, I figured this would be a great time to take my son out back and let him build some of these memories. Wrong. As I started to open the door he grabbed my leg and said, “No daddy. Don’t open the door. It’s scary.”

I forgot how scary it was when I was a child too. So, I comforted my son instead.

What does this have to do with insurance?

Flooding.

Water damage.

Fallen trees.

Lightning strikes.

Power outage.

Bugs.

Not all are covered under your base home policy and some are. Here’s a quick list:

Flooding – not covered. Need separate flood policy to cover this.

Water damage – depends on the cause. If you leave the window open at your home and the rain comes in because you’re forgetful, not covered. If the rain breaks the window and causes damage, you’re covered. You’re also covered, if the wind blows the rain under the shingles on your roof and leaks into the drywall in your home.

Fallen trees – generally not covered, unless it’s touching your home.

Lightning strikes – covered. If it hits your home or detached structures (pool equipment, sheds, etc.) you’re covered for the damage and any resulting fire, if any.

Power outage – depends on the policy. There’s usually some amount for spoilage but call your agent.

Bugs – no coverage. Unfortunately, the rains cause the scorpions and other fun critters we have here to migrate to the dryer climate inside your home. This just isn’t covered by your homeowner policy. Sorry.

Naturally, this is not an exhaustive list of the coverage in your particular policy but a good start. If you have a fallen tree, it shouldn’t hurt to call your agent and ask, “What would happen if a tree blew over? Would the insurance company pay to clean it up?” Every home insurance policy is different and has unique coverage options.

If you don’t have an agent and use an 800# insurance company for your insurance you may want to be careful how you ask your question. The person answering the phone may enter your question as a claim inquiry on your policy which will show up on your CLUE (loss history) report. This could affect your rates and future ability to find coverage.

Please leave your comments or questions below. Or, if you want an agent you can trust and ask questions about your unique situation fill out our home insurance quote form .

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