Auto Insurance

High Risk Auto Insurance: Top Reasons Drivers Are Considered High Risk

2009-08-18T10:57:00.000-07:00

There are a number of reasons that drivers are considered high risk. They range from, most simply, your driving experience, to the car that is being driven. The total sum of the equation is what places individuals into the various risk categories. If you drive a high performance vehicle, you will be placed in a higher risk category than one who drives a more economical vehicle. Similarly if you drive a great deal of miles per year or have few years of driving experience, these factors will increase your risk factor from an insurance company’s point of view.

Lack of driving experience is the most common factor that causes someone to be classified as a high risk driver. Most people are able to remember when they first obtained their drivers license. We either had the, "I know it all”, or the "I'm scared and a little apprehensive about my driving ability" mindset. When I was a kid, I remember thinking that I knew everything that there was about driving. That changed when I got into a car accident, and as time passed after, I learned from that accident and my driving knowledge grew. Many years later, I’ve gathered a bit of elderly knowledge and can look back at how much I have learned since I was 16. I’ve learned a bit about my riskier days when I would tailgate, drive at speeds well in excess of practical, and would multitask instead of paying attention to my driving. This is what insurance companies look at, and realize is most often the case.

Another risk factor is the type of vehicle that you drive. If you look at the inherent classification of the vehicles that are around, this would be apparent. For example, if you drive a Ford Mustang Cobra compared to a base Ford Mustang, you would be classified as a higher risk driver since the insurance company will look and think about why a person would want a more powerful version of the same vehicle. Most of the time, it tends to be a person who wants to race, show off or impress someone, or just plain go fast. An insurance company tends to think, well, they have the power and high speed capability, so the person will probably use it. In my claims experience this usually leads to more severe and expensive accidents since higher speeds typically equate to worse injuries and property damage.

Your driving record is another reason that a driver is considered high risk since the type of information contained in a drivers record is a snap shot of your overall driving personality. If for example you have a large number of speeding tickets, you will have a higher propensity of being involved in an accident since the higher speed equates to less time to react or avoid it. Just like a person with a lot of speeding tickets shows a higher propensity for an accident, so do other citations such of failure to yield or failure to stop, due to their close relationship with driver awareness.

In conclusion, the factors listed above are the major functions that cause a driver to be considered high risk. To avoid being classified as a high risk driver take the combination of the above factors and try to do the least of them. The higher risk you present, the more your insurance will cost or it will even cause you to be ineligible for some insurance companies. There are several who will not issue a policy to a driver for some more expensive cars or to new and inexperienced drivers. End point, if you’re a new driver, had several accidents and/or tickets in the past couple years; it would behoove you to avoid a high performance vehicle that would end up increasing your risk factor. Try getting something a little more demure and after the points or accidents have dropped off then go back to the high performance vehicle.

Accidents & Auto Insurance: How Important is a Witness when Filing an Auto Insurance Claim?

2009-08-18T10:56:00.000-07:00

If you have been in an accident involving another vehicle, you should report it to your insurance company as soon as is reasonably possible. Your carrier has probably provided you with a short list of the information you need to provide them when an accident has occurred. One of the stated items is likely to be “Witness Contact Information”. If a witness did, indeed, approach you and offer their information, write it down and try to make sure you have a full address and, if possible, more than one phone number.

But there are some other pieces of information about the witness you should consider.

• Do you know him? Does the other party? It nearly goes without saying, but do ask the witness if he knows the other party in any fashion, to any degree. In most instances, the witnesses are impartial, but occasionally they may happen to know someone who’s involved. This is particularly true in rural areas and small towns.

• What was his vantage point? Was he behind either one of you? Was he inside a nearby business and happened to be looking out the window? Was he sitting, poised at the nearest intersection, waiting for a light to change? Was he watching prior to impact, or was it the sound of the impact itself that drew his attention?

• What does he have to say about the accident? What details does he have to provide to your adjuster? Ask him specific questions about what he saw and when he saw it. It is very rare, but not impossible, that an uninvolved person happens to be watching an entire accident unfold. Be sure that he saw ALL of the action, including the action that preceded the impact. However, do not totally discard his input, even if he didn’t see ALL of the crash.

• Is the witness willing to assist in the adjuster’s investigation? Is he willing to speak to the adjuster, once assigned, or does he consider it an imposition of his time? You may not want someone who is going to have a stance of hostility or being greatly inconvenienced to be a spokesman to your claims adjuster.

• Does he have the time? If you’ve called the police, find out if the witness is willing and able to stay at the scene until the police have arrived.

All these factors pertaining to the witness tend to indicate he believes you are not “at fault”. Obviously, if you have contributed to the accident, do not ask a bystander to attest to details that are not valid or true. The damages to both autos most often reveal nearly as many facts as a human witness can, especially coupled with a diagram of the site of the impact. With the advent of detailed online map searches, which now also feature actual photos of streets and highways, even freeways, adjusters now have quite an advantage in determining the actual layout at the scene of the impact, and often, these factors can sometimes eliminate some false details given by individuals. Additionally, adjusters can and do, when necessary, have scene inspections completed, if details of the claim warrant it.

What Factors Determine Auto Insurance Rates?

2009-08-18T10:55:00.002-07:00

When you purchase auto insurance you have a ‘shared risk’. Your carrier agrees to share the risk as you and family members drive your vehicles. The company will decide how much premium (payment) is needed in order to share the specific and personal risk that you and your family potentially pose.

Liability coverage is mandatory, required by each state. The required minimum limits vary by state. However, it is seldom wise to drive with minimum coverage. Your carrier will consider the following facts when setting a rate:

• Driving records of all drivers listed on your policy; better records equal better rates – and vice versa.
• Amount of coverage requested – I can not stress enough the need to carry sufficient liability coverage for your vehicles. Repair shop costs soar as the need for talented & proficient employees increases; auto parts costs – even for aftermarket parts - rise with all other commodities; but these are the least costly. Should your vehicle be involved in an accident that causes a fatality, an attorney will undoubtedly bring a lawsuit, demanding a far greater amount than your policy limits for Bodily Injury. Your carrier is only responsible for the amount that you’ve chosen for your policy.

Collision coverage is optional if you have no loan on the vehicle. If you have a loan, your lender will place a lien on your vehicle, which will have been presented to your carrier. This will trigger collision coverage to be placed on your policy, by and for the protection of your lender, if you have not done so. Lenders have no obligation to shop for the best rates, and will add the cost to your loan. A “loss payee clause” is placed on your policy by your lender. The following factors, plus the amount of deductible you choose, will affect collision coverage:

• Year, make and model: Collision coverage pays for repairs to your vehicle, regardless of who is at fault. Even if someone else is at fault, you can use this coverage, and your carrier will attempt to recover costs, including your deductible, from the other driver or their insurance carrier. A higher deductible produces a lower rate.
• Drivers: Every driver in the household will be ‘rated’; their driving records are requested from the DMV, and their record and age influences cost. Youthful drivers are typically more expensive to insure, due to inexperience and their potential to be more nonchalant or careless. Factors of youth also apply to liability insurance. To reduce rates, you can “exclude” a problematic driver.

Comprehensive Coverage pays for costs incurred by vandalism, theft, and other non-collision accidents, such as an object striking your car. The following factors are considered for Comprehensive coverage:

• Where the vehicle is garaged: Your zip code matters when you purchase auto insurance. Crime rates, specifically auto theft rates, are a factor when determining your premium.
• The year, make and model of your vehicle: Some vehicles are more desirable and, therefore trigger a higher premium for coverage.

These are the primary considerations given when an insurance carrier sets your rates. These factors are generally taken into account for a policy that covers ‘normal’ household vehicles. Additional factors apply should you have any ‘specialty coverages’, such as coverage for a vintage vehicle.

Auto Insurance for Teens

2009-08-18T10:55:00.001-07:00

Your son has just gotten his driver’s license and is feeling that sense of freedom that comes along with it. Car fever is spreading through his junior class like wildfire. He gets behind the wheel and drives away, leaving you gazing out the window with a worried look on your face—there are maniacs on the road; will he be safe? How much more am I paying in insurance premiums? You have every right to worry about his safety, but know the facts and your options regarding insurance coverage for your teen, and you will worry a little less—at least about the premiums.

Auto insurance companies know a secret and that secret can cost parents of teenagers dearly. The secret is that teen drivers have the highest crash risk per mile traveled, compared with drivers in other age groups. The problem is worst among 16-year olds, whose driving experience is the most limited and whose immaturity often results in risk-taking. Motor vehicle crashes are the leading cause of death for teens in the U.S., accounting for more than one in three deaths in this age group. The risk is highest among males, and higher still among teens driving with other teens in the car.

I’m not telling you this to scare you. (I know you were already scared for your child.) I’m telling you this because these are the statistics insurance companies use when they decide to charge up to twice as much to cover a teen driver as an adult driver. Auto insurance companies spend less money on older, more responsible drivers. This is because these adult drivers are less likely to be involved in an accident, which saves the insurance company money. Younger drivers are less experienced and are proven to cause more accidents. Statistics show that teen drivers are significantly larger liabilities to insure.

So how can you get around paying almost double your current insurance premium to keep your darling daughter in the driver's seat? You will pay more, but you can minimize the impact. Here’s how:

Emphasize safe driving - Stress to them how important it is for them to keep a clean driving record. That means driving safely – no speeding tickets, no traffic violations, and no accidents. Over a period of time, their safe driving will be rewarded with lower premiums.
Purchase insurance with a higher deductible - The higher the deductible, the lower the premium.
Choose a vehicle for its safety features, not its speed - If you are purchasing a vehicle for your teen, choose one that is built well with extra safety features, like air bags and anti-lock brakes, and do not select one that falls into a sports class, which is typically less safe, and at a higher risk rating class. Stay away from the Mustangs and stick to the Civics, for example.
Consider purchasing a “stand alone” policy from an agency that specializes in providing teen insurance - A “stand alone” policy means they are not added as an additional driver on your insurance, but rather carry their own insurance. Providers of teen auto insurance reduce their risk by placing certain restrictions and requirements on the driving habits of the teen they are covering, such as attending driving school, no driving after dark, no giving rides to other teens, and various other rules which allow them to keep the rates lower for teenage drivers.
Be sure your teen is doing his best in school - Most insurance companies give a sizable discount if your son or daughter can provide a copy of his or her report card that shows over a 3.0 grade point average. A bigger discount may be available for your 4.0 student.
Complete a defensive driving course - Some insurers provide defensive driving courses on-line or on DVD. AAA, for example, offers a course called TeenSmart, and proof of its completion reduces the premium for your teen significantly.
Add your teenager as the primary driver on your family’s oldest or cheapest car, instead of as an additional driver on a newer car.

The easy thing to do, of course, is to just add your teenager onto your existing policy, but it is a better idea to take the time to shop around for the lowest rates first and keep the tips above in mind. Then pay your premium and always have your son or daughter call you when they arrive at their destination.

Auto Insurance and Learner's Permits

2009-08-18T10:54:00.001-07:00

You’ve received your learner’s permit. Congratulations! You are on your way to being a fully licensed driver with all of the privileges and responsibilities that come with it. One of the responsibilities that comes along with driving is being an insured driver. All drivers should be insured to protect themselves, others, and the vehicle they are driving in case of an accident. Depending on your situation, you may or may not need to get your own auto insurance when you get your permit to be covered.

Since all states have different laws when it comes to auto insurance, the following are just guidelines, not hard and fast rules. Check into your state’s insurance laws and your individual insurance company’s policies for specifics.

Minors and Dependents

Depending on your situation, you may not have to get your own insurance when you have your permit. The majority of people who get their learner’s permits are teenagers who are still living with their parents/legal guardians. If you are a dependent of someone who has auto insurance, you are usually covered under his policy without having to be added to the policy.

Your guardian should read over his policy and double check with his insurance agent to make sure that this is the case with his auto insurance. Once you obtain your full license, you will need to be placed on your guardian’s policy or get your own policy.

Those Living with a Spouse or Significant Other

If you are no longer living with your parents or guardians, but you are living with a spouse or significant other (and in some cases, simply a roommate) who has auto insurance, you may be able to get coverage under that person’s policy. Since the rules of a learner’s permit require you to drive with a licensed driver at all times, chances are that person will be someone you live with.

Have him read over his policy or check with his insurance agent to find out if you can be covered under his insurance. You also should find out if you need to be put on the policy or if you are covered without your name being on the policy.

Going It Alone – Getting Your Own Policy with Just Your Permit

It is not easy to get an auto insurance policy in your own name when you just have a learner’s permit, but it is possible. If you are over 16 years old, there are some companies that do offer insurance to those holding learner’s permits. The policies usually have strict requirements and come at a very high rate. It may take contacting several insurance companies before you find one that can accommodate your needs. If at all possible, it is to your best advantage to try to get covered under a licensed driver’s policy instead of obtaining your own

Auto Insurance for Pimped Out Cars

2009-08-18T10:51:00.000-07:00

You have spent anywhere from several hours to several months “pimping out” your car; and now it’s unlike anything else on the road. Your pimped out car is both a blast to drive, not to mention fun to look at. And admit it…it’s fun to look on as others admire and praise the detail and work that went into your car. Because you have a unique car, you will need unique insurance in order to protect the time and money you have spent perfecting your ride.

Your Current Insurance and Your Pimped Out Car

If you haven’t already altered your car, you can talk to your insurance agent about how your planned additions will affect your insurance rates and coverage. If your insurance will still cover the car, you will need to do the following:

Have proof (i.e., receipts and photographs) of the worth of your after-market add-ons.

Get everything in writing. Don’t rely on what your agent tells you over the phone; make sure that you get the policy and all of its details in writing.

Be totally honest. There is no point in hiding alterations you are making to the car because you are afraid that it won’t be insured anymore. If something happens and the agency finds out about the alterations, they will not pay your claim, and you will have wasted your money.

Specialized Insurance for Pimped Out Cars

If your current insurance agency refuses to cover your pimped out car, you will need to find new insurance. Do some research; look online, call agencies, and find out what’s out there in order to get the best coverage for the best price. If your car is really unusual, you might have to get specialized insurance. There are places that only offer insurance for custom or classic cars. However, since they offer specialized insurance, they usually have strict regulations you must follow. Some examples of these rules may include:

No modifications that make the engine faster, such as nitrogen.

No using the car for road-trips, or even daily use. (This applies when the car is used mainly as a show car.)

The car must have added safety measures (such as being parked in a locked garage).

However, not all providers will have the same rules. Find a provider that has rules that you can live with. Do not buy a policy with regulations you don’t think you will be able to follow.

Keeping Insurance Costs Down

Many insurance agencies will send an inspector to independently verify the value of your car and the customization in order to determine the amount to which the agency will insure it and how high your rates will be. No matter what insurance provider you use, there are some simple things you can do to lower your insurance costs, including:

Drive safely. There are usually incentives for safe drivers; accidents and tickets will drive your rates up.
Install safety devices, such as alarms or a LoJack, to prevent theft.
Keep your mileage down.
Park your car in a locked garage whenever possible.

Although it may be more difficult or more of a hassle to insure a custom car, it is worth it. After all of the time and effort you’ve invested, not to mention the money, your car should be protected so that you can relax and enjoy the rewards of your pimped out ride.

Buying Discount Auto Insurance: 10 Reasons Why It’s Called "Discount"

2009-08-18T10:44:00.000-07:00

There are a number of different things you can do to obtain discount auto insurance. Most of the discounts can be combined to maximize your discount such as a good driver, multicar and multi-lines discount combined on a single auto policy. Below are the top 10 discounts you can obtain and why.

1. Buy other policies with the carrier
The more various policies that you have with a single insurance company will assist you in obtaining a discount off your premium. If you have a home owner’s policy along with an auto insurance policy, your premiums for both will typically be about 10-20% lower than the standard rate.

2. Good Driver Discount
This varies by state, but inside California if you have been licensed for the previous 3 years and have not had more than one violation point during that time and were not in an at-fault accident that resulted in death, total loss, or damages exceeding $500, then a Good Driver Discount tends to be at least 20% below what the insurance company would typically charge for the same coverage.

3. Profession Discount
This is a discount offered to various professional groups such as engineers, scientists, teachers, or doctors to name a few.

4. Renewal Discount
The longer you have been with an insurance company, the more profitable you are to them. As a result, they want to keep you as a policy holder by offering a renewal discount which is usually up to 1% to 10%. This discount begins after 3-5 years and gets larger the longer you are with them.

5. Persistency Discount
This is a small discount offered for people who have had consistent insurance without a lapse in coverage.

6. Student Discount
The student discount is a discount that usually applies to persons under the age of 25 who are a full time student, unmarried, and meet the grade requirement set forth by the insurance company. Usually the grade requirement is a B average.

7. Theft Recovery or Deterrent System
This is a discount off of your comprehensive coverage for having an alarm or theft recovery system. This is one that you would be smart to consider because the cost of the alarm or recovery system may not be worth the potential savings. From my experience the savings for this is minimal and it is worth it to ask about the savings before you add one if you don’t have an alarm.

8. Multi-Vehicle discount
Having more vehicles than you have drivers will assist in obtaining a lower rate. When you exceed a single vehicle with a single operator, the rates will be discounted because the amount of use that each vehicle will experience tends to decrease and the risk exposure will also drop.

9. Mileage Rating
If you drive less than 12,000 miles per year your premiums will typically decrease. The only issue with the discount is that if you do drive more than the miles reported, you may run into issues if you file a claim. You may need to report your current mileage at the time of the policy change and then report your current mileage at each renewal in order to obtain the discount since mileage above the reported amount will typically lead to a slight increase in premium.

10. Passive Restraints or Airbag Discounts
Buying a vehicle with various airbag or restraint systems usually gets a discount since the level of safety within the vehicle increases and the potential exposure to loss decreases.

Auto Insurance for Students

2009-08-18T10:41:00.000-07:00

Today’s student has a lot on his mind. Next week’s final, the big game, and the party scene are just some of the distractions facing our youth. Auto insurance is not a major concern for many students. The reasons for this can vary. Many young students are still covered on their parents’ policies, as they can be covered on these policies as long as the parents allow them to be. However, for all of the hard-working students that have to pay for their own auto insurance, there are a few key things to keep in mind.

Collision and Comprehensive Coverage for Students

If you have a new car or a newer used car, it is important to have full-coverage insurance for your vehicle. Full coverage means that you have collision and comprehensive coverage. Collision deductibles are the amount of money that you pay to the insurance company to fix your car in the event of an accident where you are at fault. These claims affect your future rates on insurance substantially. The comprehensive deductible is the amount of money you pay to the insurance company in the event that your vehicle was vandalized, involved in a hit and run, damaged in a hail storm, or even if you hit an animal in the road. These claims do not affect your future rates on insurance, as they are considered not to be the fault of the driver.

Minimum Coverage for Students

States vary in the minimum required bodily injury coverage—anywhere from 50/100/25 to 10/20/20. These numbers translate to the following: x thousands of dollars per person, x thousands of dollars per accident, and x thousands of dollars for property damage to others. Keep in mind that states have mandated minimums. In general, this is not enough coverage to ensure that all parties will be taken care of in the event of an accident.

Work with an Agent

Finally, when choosing your comprehensive and collision deductibles, ask your agent to compare different levels, and get feedback as to what they think you should do. Agents are professionals who do this kind of work for a living. They are trained and licensed, so they will help you to make the best decisions for your current situation. Also, when you upgrade your car, after you graduate, it is important to consider a different level of deductible. If you had an older car that was not worth much and carry liability only insurance for it, consider going with full coverage insurance for your new car.

How to Shop for Auto Insurance

2009-08-18T10:36:00.000-07:00

The way it was
The twentieth century way of buying insurance was to find an agent, make an appointment, bring in all your paperwork, and wait, sometimes several days, for a quote. Our parents’ generation has always shopped for and bought insurance this way. Some in my generation still do. You call your local agent, who is either independent or employed by one insurance company. You ask that agent all of your questions and he or she helps you figure out what coverages you need. Later, if it’s an independent agent, he or she will give you a quote from one or more insurance companies. If he or she works for only one company, you’ll know the premium pretty quickly. If you have a claim, you may also call “your agent,” who often becomes the liaison between you and the insurance company. It’s kind of a nice small town way of doing business. With the advent of the Internet, however, the small town is rapidly shifting to your computer.

The way it’s becoming
Buying auto insurance can be a confusing and daunting task. There are so many ads on T.V., radio, newspapers and the Internet, that it is likely to overwhelm you before you even get started. As with making any major investment, doing your homework and becoming educated are the most important ways to begin. If you already have insurance, take out your policy and read it! Know what coverages you have and what you are paying now. If you don’t have insurance, then take stock of your assets and understand what coverages you need in order to protect them. The most important thing is to ask lots of questions before you buy.

Ah, but who do you ask? If you have questions, does that mean you must go to an insurance agent because you need someone knowledgeable to talk to? Not necessarily. Things are changing, but in insurance, a service-oriented industry, there is always someone to talk to, even if you choose to buy online.

The Internet has had a tremendous impact on the way we shop for and buy goods and services in this country. One thing I’ve noticed, though, so far, is that while many people shop online, a few still hesitate to buy online. They often shop around to see what’s available, and then buy it locally. That goes for insurance, too. Many people shop the Internet for prices, and still check to see if their agent can do better. It’s becoming clear, however, that usually your agent cannot do better. With the lower overhead and speed of operating and serving online, insurance brokers and carriers can generally offer better rates and service you quicker via the Internet.

The way it is!
My friends, all you need to do to buy insurance online is to answer some questions on your computer, and you will have quotes, often money-saving quotes, within minutes. If you need someone to hold your hand through the process, most of the websites offer customer service by phone or e-mail to answer all your questions. “Impersonal,” you’re thinking. Hey, this is insurance, not a medical appointment! The important aspects of buying insurance are the price you pay, the time you’ll save and the service you’ll get once you’ve bought it. If you do your homework, you will get what you need over the Internet, and you will likely get it faster and cheaper. The Internet is the twenty-first century way to go!

Auto Insurance Rates: What Drives Them?

2009-08-18T10:26:00.000-07:00

It seems we can always count on seeing a higher insurance bill at every renewal date. Even the best of drivers find this to be true.

Insurance carriers have a number of reasons to increase rates. One is economic. Just as you are paying more money for necessities such as groceries, household goods, durable goods, automobiles, college tuition, gasoline and all those increasing costs, so does your insurance carrier. Remember the basic description of insurance: a shared risk.

Insurance companies face increased costs in office space costs, claim payouts, software, salaries, reserves – a sticky cost mandated by the government, and other known or estimated needs. In a world with new smaller carriers emerging, bringing fierce competition, your insurance company competes to keep up. But they are mandated to ‘share a risk’ with you when they issue a policy to you.

Every time a claim is opened, a company’s computers set an ‘opening reserve’ on the claim. A simple example: their insured struck a deer. When the claim is reported, the computer immediately ‘corrals’ an amount of money, based on year, make, and model of your vehicle, and the estimated amount of damage incurred. These reserves will not remain the same. These are the average costs of repairing this specific vehicle for the estimated damages. Statisticians keep these amounts current and the information entered for a new claim is based on calculated expectations. After the adjuster begins investigation, those amounts will be changed, based on details she gains in her investigation. Nonetheless, reserved amounts, at any given time, can affect costs.

Insurance rates are also based on where we live and drive. If your neighborhood is high risk for theft, your rates may increase. If your car is typically garaged at home, your first party coverages (Comprehensive and Collision) may be reduced somewhat. The number of miles you drive will affect your rate: the more your insured vehicle is exposed to possible damages, the more you are apt to travel through areas with high traffic and high accident rates, the greater your premium may be.

Another example that sounds unfair is the increased cost of litigation. Litigation rarely takes place in a claim where only property damage exists; primarily in bodily injury claims. Even in cases where suit is not filed and a staff attorney is not involved, soaring medical costs affect not only the amount of reserves that are set for a claim but for potential payouts in claims for Bodily Injury.

Is there a solution? Somewhat.

Review your declarations page of your policy throughout the policy period, and certainly at the time of renewal. Consider whether you can decrease certain coverages: perhaps your children are on their own and no longer to be listed as drivers; can you use public transportation for your work commute? If you have an agent, discuss your policies with her; determine where savings can be made without increasing your personal exposure unreasonably. Make thorough and honest evaluations of whether that brand new vehicle is necessary. Take a Safe Driving course every year, and make sure your carrier gets a copy of the certificate each year.

Auto Insurance for Mexican Nationals: 10 Things Mexican Nationals Should Know About Purchasing Auto Insurance

2009-08-18T10:25:00.000-07:00

Buying insurance in a new country is a particularly daunting task. You are purchasing a legal contract to protect you while operating a vehicle within the United States. Here are a few items to look at when trying to purchase insurance in the United States:

1. Find an agent with whom you can effectively communicate. Since you are purchasing a legally binding insurance contract, you want to make sure that you completely understand what the person selling you the policy is saying. This will allow you to ask the questions necessary to make sure that you understand what you are purchasing.

2. Make sure that the agent who sells you the policy explains it completely. Make sure that the liability limits that are sold to you adequately cover your requirements. This may include collision, comprehensive, medical payments, uninsured motorist and/or uninsured property damage coverage.

3. Find a reputable insurance company. There are 40 plus insurance companies who will issue a policy to vehicle owners without a driver’s license, several are major insurance companies. Therefore, make sure that the company you go with is reputable and in good financial health.

4. Find out if there is a time requirement to obtain a United States drivers license. Some auto insurance companies will issue a temporary policy to people who lack a valid U.S. driver’s license. Find out if this is the case because the policy may cancel if the requirement is not met.

5. Know how your policy is being issued and by who. Are you purchasing the policy directly from the insurance company or through a broker or agent? Make sure that the insurance company is permitted to conduct business in your state. Some insurers are not licensed to conduct business in all states, therefore ensure that the people who are selling you the policy are licensed to issue insurance within your state.

6. Make sure that your vehicle is properly registered and insured. There is nothing illegal about owning a car without being able to obtain a license as long as it has insurance that meets the minimum requirements in your state. As a result, ensure that your policy adequately protects you.

7. Who do I call when I have a claim? Find out if you are supposed to call the insurance company at a certain phone number or the agent who sold the policy.

8. What is the policy period? Most auto insurance policies are 6 or 12 months long. Make sure that you know when the policy expires to avoid a future lapse in your insurance.

9. Is there an added cost for me to pay the premium over time? Most people pay their insurance over the course of the policy period; consequently if there is a fee, find out what it is, the fee can add $12 to $50 per year to your policy premium cost.

10. Does this policy cover anyone who drives my vehicle? A great deal of the time, policies for new drivers are considered high risk since the driver doesn’t have the documented driving experience within the United States. These policies often times do not transfer to any vehicle that you drive except the one listed on the policy or to anyone who drives your vehicle. Find out if the policy does or does not provide this coverage extension.

These are a few items to be sure and ask about, it doesn’t cover everything that may be an issue. If all else fails, ask your friends. See who they are dealing with and how they like them and ask if they run into any questions or issues.

Auto Insurance Claims: Top 10 Items You Need When You Make A Claim

2009-08-18T10:21:00.000-07:00

. Who did I have an accident with? Be sure to get complete information from the other party(ies) involved. This means copying down their address, driver’s license #, date of birth, and ask for their phone number. In addition, obtain their insurance information including, the company, policy #, agent if there is one, the policy begin and expiration date and their phone #. You need to make sure that you have as much info as possible to give your insurance company; this will help get your claim resolved as fast as possible.

2. Were there any witnesses? Was there anyone who saw the accident happen? You want to make sure that you get information from anyone who saw the accident. This will assist the insurance companies to determine who is liable for the accident.

3. Were the police called? If the police called or showed up, make sure to get the name and badge # of the officer and a report number. It may take your insurance company up to 3 months to get a police report, so be sure you take the information but don’t rely on the insurance company getting the information.

4. What kind of vehicle or vehicles were involved in this accident? You want to make sure that you get the vehicle year, make and model, the license plate #, and VIN number for each vehicle involved.

5. Where did this happen? Get the intersection or street that the accident happened on. Also, you want to make sure that you know how many lanes are on each side of the street, if the street or streets are 1 way or 2 way, the type of striping on the pavement within 100 feet each direction of the loss, i.e. is it a solid, double yellow line, a white line, etc. Also, you want to know where each vehicle impacted, what lane you and the other car were driving in just before the accident, the direction of travel for each vehicle, and if there were any signs posted that control traffic flow.

6. How many passengers were in each vehicle? Take note of how many people were in each of the vehicles involved. Once you know, make a brief note of their description or name including: ethnicity, gender, weight, height, etc. This will help if you are the victim of a staged accident or other type of insurance fraud since people sometimes mysteriously are reported as an occupant of the vehicle when they were not present. This is not common, but if it ever does happen, this will help you avoid being a victim.

7. What type of condition was the car in right after the accident? Was the vehicle drivable? Where is the damage? Is there any additional damage on the vehicle not related to the accident? If there is additional damage on the vehicle not related to this accident, be sure to tell your insurance company.

8. Where do I want to get my vehicle repaired? If you have a shop in mind, have that information with you. If you don’t, ask around, your friends might have a good recommendation. Otherwise, you can ask your insurance company if they have a repair program. If they do have one, be sure to ask about the program’s warranty, cost, and if there is a benefit to using it.

9. Write down all the information. Record all the information that you have gathered and keep it in a safe place. This is to assist you if there is a problem with the claim. When you report it, be sure to write down who you spoke with, your claim #, and what if any promises were made. This will make your life easier if someone says something and then it doesn’t happen.

10. Take pictures of the accident right after it occurred. Take a photo of your vehicle and the other vehicle(s) involved including all 4 corners. Also, if you can get the other party in the photo, that will help in the event that either insurance company needs help identifying the other party involved.

If you have a claim that needs to be filed, the above items are good to gather since it will make the process easier and assist your insurance adjuster to resolve your claim at a faster pace. The insurance adjuster(s) you will deal with each have a job, it is to resolve as many claims as they can in the least amount of time possible. As a result, the more information you can give him or her, the smoother the process will be.

Shopping for Auto Insurance: 10 Things You Should Inquire About

2009-08-18T10:18:00.000-07:00

1. Financial stability of the company - One thing that is rarely asked when a person looks for insurance is how financially fit the company is. In this age of federal bail outs and company bankruptcies, it is prudent to find out how long that they have been around? Who are their major financial backers? Or simply if this company admitted to do business in the state that you reside?

2. Where are they located, who do I contact for assistance? - It is nice to know where the insurance company has offices, since the only time you will probably ever talk to your insurance company is when they send you a bill, a question about your policy or file a claim. In the event that you need to contact your insurance company, are they available 24 hours? Or do you have to call early before work in order to accommodate their working hours? It should also be asked if the person selling you the insurance will be the person to contact or if they have a 24 hour call center to assist if that person is not available.

3. If I were to have a claim, who would handle the claim? - The primary reason most of us buy auto insurance is to protect our car. As a result, when you have an accident or your car is broken into, how smoothly and quickly will it be resolved? Is a claim is handled in house or is it handled by an outside company? This varies with each individual insurance company. Some will contract out portions of your claim, while others will handle the claim completely within. As a result, it’s good to find out who will be helping you. Will you have a single point of contact or will you have to deal with several different people? This is usually helpful since most people prefer to deal with one person, not a call center where you might get contradicting information.

4. Does my insurance transfer to a rental car or a friend’s car if I borrow it? - This is a good thing to know because most, but not all insurance policies will cover you while you operate another vehicle. If your policy does cover you, it is also good to ask what your out of pocket expense would be if you are in an accident. This is usually your deductible although a few insurance companies classify rental losses in other ways and may have a greater or lesser expense to you the policy holder.

5. What type of coverage are you being offered? - One thing most people don’t understand is what each item on your policy covers. Each of coverage’s that you purchase is listed out separately on your declaration page. What does collision cover; what does comprehensive cover; what is umpd? These are good to know since most insurance policy declaration pages have a series of codes such as UMPD, UMBI, BI, COLL COMP, etc that many people do not understand. Have the agent or sales representative clearly explain what each means and what your out of pocket expense will be to use your coverage.

6. How can I lower my rates? - This is where an agent or representative can really help you obtain discounted insurance. Ask about multi-policy discounts, student or trade association discounts, or simply ask what type of savings you can obtain by changing your coverage deductibles.

7. Does this policy include rental car coverage if I have a claim? - As a claims adjuster, one of the most common questions was, “Can I get a rental car?” What most people did not realize is that they did not purchase the additional coverage that would have the insurance company pay for their rental car when they are in a covered loss. Over the past years, the most consistent thing I have heard was that their agent or representative had informed them that they had complete coverage. As a result, they thought that their policy included coverage for the costs to obtain a rental vehicle. Rental coverage is a separate line item and typically is $20 to $40 per 6 months depending on the amount of coverage. It is one way that a great deal of sales agents or representatives will try to save you money on your premium by not including it. If this is your only vehicle and need it on a daily basis, I would advise buying it for about $30/$900 which is $30 per day coverage for up to 30 days. If you don’t need your car as often or have a 2nd vehicle this coverage may not be necessary, but it is good to assess the situation before making a decision.

8. What is my deductible? - A deductible is the out of pocket expense you will incur before the insurance company will pay out. Most deductibles are $250, 5$00, $750 or $1000. The deductible for auto insurance is per occurrence unlike most PPO or EPO health insurance which typically has a yearly deductible. One way to save money is to compare the price difference between each deductible level. Just be sure to weigh out the difference in price with the deductible to make sure that you are choosing a one that will suit your financial comfort level.

9. How much will it cost me to pay my premium in payments instead of all at once? - Most of us make our payments over the course of the policy; what most people don’t realize is that each payment typically has a fee added onto it. If you make payments, find out what the cost of paying over time is compared to paying in full. If you are able to, you can avoid the fee you can pay the policy in full at the time of issuance.

10. Is there an agent or broker fee for helping me obtain the policy? - This varies depending on the agent and or brokerage. Some charge fees for helping you get a policy with an insurance company that they represent. It is nice to ask about this fee before you pay it since it adds to your policy cost. Lastly, you want to find out if this is a one-time fee or something that will be charged annually, or when ever you contact them.

Women & Auto Insurance: What Women Should Know About Buying Auto Insurance

2009-08-18T10:14:00.000-07:00

You’ve undoubtedly heard the phrase, “women drivers”, uttered by men while rolling their eyes as if to say that women are not good drivers. In Men are from Mars, Women are from Venus, author John Gray notes the many subtle and not-so-subtle theoretical differences between men and women. Driving ability may not be among them, but auto insurance companies seem to have bought into the scheme that there are, indeed, differences between the sexes. They base their findings, and, in turn, their rates for insurance premiums, on statistics, however, not on theory. Their conclusions may surprise you.

Purchasing Insurance
Statistics from the Insurance Institute for Highway Safety (IIHS) show several reasons why men pay higher auto insurance rates. What are the differences between men and women and why are insurance rates typically lower for women? Female drivers do not have as many accidents as male drivers; they do not get as many speeding tickets; they get fewer moving violations. More men die each year in automobile accidents than do women. Why? Simple: women wear their seatbelts more often, and their accidents cause less damage than their male counterparts’ accidents because they don’t drive as fast.

So, are insurance companies being sexist by charging women less? They would be if they were charging women less because they are, well, women. But women are being offered cheaper rates not because they are women, but because statistics show that lower rates for women are not a dangerous bet for them.

On the flip-side, IIHS also reports that women are starting to drive more aggressively and there are a lot more women on the road than, say, 25 years ago. from 1975 to 2003, female deaths in motor vehicle crashes increased 14 percent compared to an 11 percent decline for male motorists during that same period. If this trend continues, we’ll likely see a closing of the gap in insurance rates between male and female drivers in years to come.

Claims Service
Claims handling varies a great deal from one insurance company to another. While no specific statistics appear to be kept on how women are treated when it comes to making auto insurance claims, there are plenty of anecdotal reports out there on the Internet. It boils down to one thing—fairness. If you think you are being treated unfairly because you are a woman or for any other reason, your recourse is to file a complaint with your state’s Department of Insurance. You may not see quick results, but they will check into the matter and make sure your claim is handled fairly in the end.

Tips for Women on Buying Auto Insurance
OK, so you know your rates are already starting out lower than a man’s. But what else do you need to know before you buy?

1. Know your state’s minimum requirements for carrying auto insurance.

Some states require as little as $15,000 per person, $30,000 per accident for liability insurance. If you can afford the increased premium, it is always beneficial to have more than the minimum limits.

2. Know the different types of auto insurance and what each covers.

Do a little research before you shop so you know how collision is different from comprehensive and how liability coverage is different from med pay.

3. Have a checklist for discounts and ask about them and any others they might offer:

Good driver
Good student
Multiple policies
Multiple cars
Senior driver
Vehicle safety features (such as air bags, ABS brakes, car alarm, etc.)
Non-smoker

4. Consider increasing your deductibles to save money.

The higher the deductible, the lower the premium.

5. Ask about claims handling practices.

Is it simple, no fuss, or hassles galore?
How long does it take until a claim is settled?

6. Consider buying insurance online for a better deal, but do shop around.

7. Read your policy!

Now you are ready to tackle the task of buying insurance armed with information and with your eyes wide open. And next time your husband or boyfriend rolls his eyes and says “women drivers”, email him a copy of this article.

Auto Insurance Claim Settlement Tips

2009-08-18T10:13:00.000-07:00

Claims with your own insurance company
When you have filed a claim with your own insurance company for physical damage to your vehicle from a car accident (Collision Claim), or from vandalism, or another type of event under the comprehensive section of your policy, (Comprehensive Claim) or for injuries sustained in a crash, (Med Pay Claim), as long as there are no problems with your coverage, your claim should be approved and paid. For collision or comprehensive damage, most insurers will pay the body or glass shop where you have your car repaired directly after they receive an estimate from the shop. Occasionally, although this doesn’t happen much any more, an adjuster will come to your home or work, write an estimate for the damage him or herself, and hand you a check right then and there to cover it.

If you have rental car coverage on your policy and your car must be in the shop for several days or weeks, the insurer will either arrange for a rental car for you with a company with whom they have a relationship, or tell you whom to call. There is usually a daily or weekly dollar limit and the insurer will pay the rental car company directly.

For a Medical Payments claim, some people also have health insurance that will cover their bills. Read your auto policy to determine which coverage is “primary”, i.e., pays first, and how your insurer handles it if you have double coverage. Although you are entitled to receive payment from your Med Pay coverage on your auto insurance policy, some insurance companies may choose to subrogate against (legally request reimbursement from) your health insurer if your health insurance is primary. Other companies will just pay you directly for your bills even if they were already covered by your health insurance and you can keep that money. Your policy will only cover you for reasonable and necessary treatment, and as long as the amount is within your policy limits.

Claims with the other driver’s insurance company
When you are in an accident with another driver and it is, at least partially their fault, and you are not in a no-fault state, you may make a claim with the other driver’s insurance company. For a Property Damage claim, similar to claims with your own insurer, they will typically pay the body shop directly for repairs once they receive an estimate from the shop. The other driver’s insurance will also pay for a rental car for you for a reasonable and necessary time that your car must be in for repairs.

If your car was totaled, (it would cost more to repair it than its value), they will pay you the Actual Cash Value (ACV) of the vehicle and take the salvage and sell it, keeping the profit. Alternatively, they may offer you the salvage (your damaged vehicle) and the ACV less the salvage value. An agreement on the ACV must be reached in order to settle this type of claim.

If you are injured and making a bodily injury claim with the other driver’s insurance company, there are no hard and fast rules regarding settlement. If you are offered a settlement amount that you believe is fair and you want to take it, you will be asked to sign a Release and Waiver, which waives your right to come back and sue for more money from them or their insured at a later time even if you learn new information about your injury. It is always good practice to have an attorney look at the documents before you sign them. Better still, if you have anything more serious than a minor injury, it is often beneficial to have an attorney represent you so you know you are being dealt with fairly.

If you are on your own and cannot reach a settlement, you may:

Contact an attorney to negotiate for you unless time is of the essence (Check the Statute of Limitations in your state) in which case you may need that attorney to file suit to protect your rights.
Contact an attorney to file suit against the responsible party (especially if time is of the essence).
In some states you may file suit and/or file a complaint with the Department of Insurance for Third Party Bad Faith (At the time of this writing, those states are Alabama, Hawaii, Michigan, New Hampshire, Florida, Louisiana, Montana, Washington and Nebraska.) Check with an attorney in your state who specializes in bad faith cases; this is a shifting area of the law in many states.

Settling a claim of any kind is sometimes tricky. If you don’t understand what the insurance company is telling you, whether it is your insurer or the other driver’s, ask questions until the adjuster explains it clearly, or consult an attorney for assistance.

Auto Insurance for Teenagers: Controlling Costs & Safe Driving Practices

2009-08-18T10:10:00.000-07:00

1. Who did I have an accident with? Be sure to get complete information from the other party(ies) involved. This means copying down their address, driver’s license #, date of birth, and ask for their phone number. In addition, obtain their insurance information including, the company, policy #, agent if there is one, the policy begin and expiration date and their phone #. You need to make sure that you have as much info as possible to give your insurance company; this will help get your claim resolved as fast as possible.

How An Auto Insurance Adjuster Evaluates Your Injury Claim

2009-08-18T09:59:00.000-07:00

If you have never been injured in a car accident, count your blessings. If you have, or if you are injured in the future, there are some things you should know about how a claims adjuster will evaluate your insurance claim if the other driver was at fault. Your friends may tell you that you need a lawyer, but if you are not seriously injured, and it is clear it was the other guy’s fault, there is no reason why you cannot handle your own claim without the assistance of an attorney. It is important, however, that you understand how an adjuster determines the value of your claim so you provide him with everything he needs to give you the compensation you deserve.

Adjusters are well-trained to evaluate accident claims. Here are some tips on the factors the adjuster will consider and the things you need to think about, write down, and, when requested, be able to prove. As an adjuster, I learned the acronym FLICSAN and you should, too.

F - Be clear on the facts. It is important to be consistent when answering questions about what happened. Consistency makes you more credible. Write down what took place so you don’t forget.

L - Is liability an issue? If it was the other driver’s fault and he admitted it, or the police officer said so, there is usually no issue. If it could be partially your fault, find out about the laws in your state. In some states, your “contributory negligence” will bar you from recovering any money at all. In other states, you can get a percentage of your damages, referred to as “comparative liability”. If liability is not clear, do consider hiring an attorney if your injuries are fairly substantial.

I - What are your injuries? You must be able to prove what injuries you sustained, the treatment you received, what the prognosis is for your recovery and any temporary or permanent disability you have as a result of the accident. You will need to provide the adjuster with copies of medical reports from the hospital, your treating physicians and from any other health care providers who treated you. Sometimes the adjuster will even ask for records from previous years to determine if your injury might be related to a pre-existing injury or condition. As long as the requests are reasonable, be cooperative.

C – What are your claimed expenses? This is probably the most important factor the adjuster relies on in evaluating your claim. You will need to clearly state what all of your expenses are as a result of the accident and provide bills or receipts. Include ambulance, hospital, doctor, physical therapist, transportation, medical equipment, prescriptions, etc. Did you miss work? Provide proof from your employer of how long you were out and how much salary you lost. Will there be future expenses? Did you have to hire a housekeeper, a nanny? Did your spouse have to stay home and care for you and miss work him or herself? Prove it all with documentation.

S - Are there any special factors that you would like the adjuster to consider when evaluating your claim? Perhaps you care for your young children and are now unable to do that. Or maybe you have to sit all day at work and now that hurts your injured back. How the accident effected your individual circumstances could add value to your claim.

A – What will the Adjuster’s Recommendation be to his or her superiors? Adjusters have no specific formula to figure out the value of your pain and suffering, the amount you will receive over and above your claimed expenses, but a good place to start is in the neighborhood of two to three times your reasonable and necessary medical expenses. If you are convinced your claim is worth much more, talk to an attorney for advice on value. The adjuster’s job is to be fair, but he does not want to pay more than he believes your claim is worth.

N – Negotiate! Adjusters expect claimants to negotiate. Don’t just roll over and accept what is offered unless you find it fair.

Now that you know what factors the adjuster will use to evaluate your claim, that should help you evaluate it, as well. Be reasonable, be patient, and ask for what you think is appropriate.

No-fault insurance

2009-08-18T09:56:00.000-07:00

In its broadest sense, no-fault insurance is a term used to describe any type of insurance contract under which insureds are indemnified for losses by their own insurance company, regardless of fault in the incident generating losses. In this sense, it is no different from first-party coverage. However, the term no-fault is most commonly used in the context of state/provincial automobile insurance laws in the United States, Canada, and Australia, in which a policyholder (and his/her passengers) are not only reimbursed by the policyholder’s own insurance company without proof of fault, but also restricted in the right to seek recovery through the civil-justice system for losses caused by other parties.^{[citation needed]}

Description

No-fault insurance has the goal of lowering premium costs by avoiding expensive litigation over the causes of accidents, while providing quick payments for injuries. The victim's insurance company would only pay out the claim, while the driver-at-fault's insurance company would pay out a claim and charge that party a higher insurance premium as they are now higher risk. While this may disadvantage the victim's insurance company, as the at-fault driver's insurance company can recoup the claims quicker through raised premiums, accidents happen between drivers of both insurance companies with an equal chance of drivers from both sides being at fault, so this in theory should even out

Critics of no-fault argue that it does not punish reckless or negligent drivers sufficiently, with only raised premiums and a higher risk rating, and no jury awards or legal settlements. Detractors of no-fault also point out that legitimate victims with subtle handicaps find it difficult to seek recovery under no-fault. In response, proponents of no-fault insurance point out that automobile accidents are inevitable and that at-fault drivers therefore should not necessarily be punished; moreover, they note that the presence of liability insurance insulates reckless or negligent drivers from financial disincentives of litigation. Also supporting no-fault insurance, in regions with high numbers of uninsured motorists, at-fault parties are often “judgment proof” (i.e., unable to pay their liability damages) in any case. Another criticism is that some no-fault jurisdictions have among the highest automobile-insurance premiums in the country, but this may be more a matter of effect than cause (i.e., the financial savings from no-fault may simply make it more popular in areas with higher automobile-accident risk).

A quantitative monetary threshold that sets a specific dollar (or other currency) amount that must be spent on medical bills before a tort is allowed. Disadvantages of this threshold are: (1) that it can encourage insureds (and their medical providers) to exaggerate medical costs through over-utilization, and (2) that, unless indexed, it can become ineffective over time because of inflationary effects on medical costs.

A qualitative verbal threshold that states what categories of injuries are considered sufficiently serious to permit a tort (e.g., death, or permanent disability or disfigurement). The advantage of the verbal threshold is that it removes any incentive to inflate damage amounts artificially to meet some preset monetary loss figure. The primary disadvantage is that broad interpretation by the courts of the threshold can lead to over-compensation.

Best Ways to Lower Your Auto Insurance Premium

2009-08-18T07:06:00.000-07:00

There are a number of ways that you as a consumer can lower your auto insurance premium. The easiest way is to change your coverages. If you raise your deductible or drop a type of coverage, your premium will go down. Just make sure to compare your savings and comfort level with the deductible that you choose because you will be liable for that deductible amount before the insurance company will step in and pay for repairs to your vehicle.

Decrease the number of miles driven in a given year. The average miles driven per driver in a year is about 12,000, as a result, drivers who drive more than that amount are considered a higher risk and will usually have slightly higher premiums. Those who drive less will have the opposite effect since the exposure to a potential accident or loss is reduced. As a result, if you drive less than 12,000 miles per year, inform your insurance company. Just keep in mind that if you do end up driving more, you will want to inform your insurance company so that they can adjust the mileage listed on your policy accordingly and you can avoid a potential problem if an accident or claim does occur.

Exclude high risk drivers off of your policy. When a policy is opened, it typically will cover those listed on the policy as reported by you. Insurance companies will ask that all those who are close to driving age be listed on the policy. When each person is given, they will each be listed and covered on our policy unless you specifically exclude them. This can cause a problem because high risk drivers such as a newly licensed person will usually increase your rates since they are deemed to have reasonable access to your vehicle(s) and keys. To avoid the cost of doing so, you would want to exclude them from your policy. This means that they would not be covered under your auto insurance if they were to operate your insured motor vehicle.

Drive a car that costs less to repair. One of the factors that insurance companies use to determine the cost of your collision and comprehensive coverage is the cost of repairs. Luxury cars cost more to repair for the same parts than a typical mainstream car. As a result, if you would like a lower premium, drive a car that costs less to fix if it is in an accident. An insurance company will offer collision or comprehensive coverage in relation to the cost they will bear in order to repair your vehicle if an accident or loss occurs. Hence a car that costs less to repair will also cost you less to insure.

Add multiple policies to a single carrier. Most insurance carriers readily will give a multi-policy or multi-lines discount to policy holders who have several different types of insurance with them. For example, a person or family who has an auto policy along with a homeowners or renters insurance policy will typically save around 10-20% per policy. It typically takes an insurance company 3 years to make any money on a policy therefore insurance companies want to keep lines of business. As a result, they will make policies more attractive by offering various discounts. Some other examples of policies that can possibly be used to obtain additional discounts include business owners, umbrella, general liability, inland marine, or a life insurance policy to name a few.

Keep a clean driving record. One of the largest and most easily attained discounts is the good driver discount. It is simply obtained by being a good driver, avoiding points on your record and avoiding accidents. The requirements vary by state as do the discounts, but the average savings is roughly 20%.

Car alarm or theft recovery system. Having a theft recovery or alarm system on your vehicle can save you a little bit of money. Depending on the insurance company, it can save you up to 10% depending on what type of device it is. A theft recovery system such as LoJack assists law enforcement recovery efforts if your vehicle is stolen. Consequently insurance companies are willing to offer discounts off of your premium because the service assists in mitigating potential costs.

Good Student Discount. Students under the age of 25 can receive a good student discount on their auto insurance if they have good grades (typically a B average or better). This discount is usually up to 20% and is applied when proof of their grades are submitted to the insurance company.

Stay with your insurance company longer. Many insurance companies offer a loyalty or persistency discount that is rarely ever mentioned. This discount is applied to a policy after it has been in force for sometime, typically 3 or more years without a lapse in coverage. Not all insurance carriers offer this, and the time frame varies for those that do, but it usually amounts to 1-10% depending on how long you have been with the insurance company. The longer the policy has been in force, the larger the discount can be.

Auto Insurance Coverage: The Basics

2009-08-18T06:59:00.000-07:00

If you are about to purchase your first auto insurance policy or you haven’t bothered to read through the policy you have had for years, here is a guide to help you understand what all that insurance lingo means. Policies typically offer two general categories of coverage, first party and third party. First party coverage pays for damage to your car and injuries to you and your passengers. Third party coverage pays for damage you cause to someone else’s car or other property, and injury to their body. Sounds pretty easy, so far, right? Let’s get into the specifics.

First Party Coverages

Your Car:
Collision
Collision coverage pays for damage to your car after an auto accident. Most people carry a deductible, which means you, the insured, pay a portion of the repairs to your vehicle before the insurance kicks in. The typical deductible is $100, $200, $500 or $1000. The lower the deductible, the higher the premium.

Comprehensive
Comprehensive coverage pays for damage to your car caused by something other than a collision, such as a cracked windshield, vandalism or storm damage. It also covers you if your vehicle is stolen. As with Collision, most of us carry a deductible, but Comprehensive deductibles are typically a bit lower, such as $50, $100, and $200. Again, the lower the deductible, the higher the premium.

Your Body:
Medical Payments
Medical Payments coverage pays your medical bills if you or your passengers are injured in an auto accident. Your policy might refer to it as “Med Pay”. Although there is no deductible for Med Pay, there is a limit which you select when you purchase the policy. You may choose $1,000, $2,000, $5,000, $10,000, $25,000 or more per person. This does not take the place of your health insurance and is available to you and your passengers regardless of fault. The higher the limit, the higher the premium.

Uninsured Motorist/Underinsured Motorist
If you have an accident with a driver who is uninsured or has insufficient insurance, this coverage will protect you if that driver was at fault for the accident. In essence, your insurance company steps in and takes the place of the other driver’s insurance company. In most states, uninsured motorist/underinsured motorist coverage pays only for expenses related to your injuries, but some states include coverage for damage to your property, as well. Many states have minimum limits of $15,000 per person, $30,000 per occurrence or $25,000 per person, $50,000 per occurrence. These will be noted on your policy as 15/30 or 25/50. Higher limits are recommended.

Third Party Coverages (Liability)*

Property Damage
If an accident was your fault, Property Damage coverage will pay for damage you cause to someone else’s car or other property up to the limits you select. Typical Property Damage limits are $10,000, $25,000, $50,000 or $100,000 per occurrence. The higher the limits, the higher the premium.

Bodily Injury
If you injure another person or persons in an accident which is your fault, your bodily injury coverage will pay for their medical care and related expenses, lost wages, plus additional money for their pain and suffering, up to the limits you select. Typical Bodily Injury limits are 25/50, which means $25,000 per person and $50,000 per occurrence, 50/100 100/300, 500/500, 500/1 mil. Most states have a required minimum level of liability insurance. Again, the higher the limits, the higher the premium.

It is a good idea to become familiar with all of the different coverages and limits available before purchasing a policy. If you already have a policy, spend a little time reviewing your coverage and determine if it is at the appropriate level for you.

*This information applies if you live in a state with fault-based auto insurance. The states that currently have no-fault auto insurance are Florida, Michigan, New Jersey, New York, Pennsylvania, Hawaii, Kansas, Kentucky, Massachusetts, Minnesota, North Dakota and Utah. The liability coverages set out in this article do not apply to these states.

Shopping for Auto Insurance? 10 Most Costly Mistakes People Make

2009-08-18T06:58:00.000-07:00

When shopping for auto insurance there are many ways to save money. The following are 10 simple questions to ask that, if not asked, can be very costly. The only thing you risk if you don’t ask is a higher premium.

1. Are there other deductible options that are cheaper? A very costly mistake is choosing a deductible that doesn’t benefit your risk level. For a more complete analysis, refer to my previous article on How to choose a deductible. For example, if you have a low deductible with few or no claims, you are paying a higher premium for that deductible level than if you had a higher one. Why pay it if you rarely, if ever, have claims?

2. Do I really need all these coverages, and what do they cover? Don’t buy coverage that you don’t need. Check your health insurance policy coverage. If you have health insurance you may not need to purchase med-pay. Additionally, if you have roadside assistance through a credit card or other provider such as AAA ,then you don’t need to purchase roadside assistance coverage on your auto insurance policy.

3. Are there any discounts through my work or a trade groups? Sometimes insurance companies will offer specific discounts to people in various professions or employers.

4. How do your rates compare to your competitors? Check with more than one agent or insurance company. If you only look at one carrier or source for your insurance quote you may end up paying more than necessary.

5. Do I need to have everyone I live with listed on my policy? Don’t pay for household members who don’t drive your vehicle. Your policy application asks for all drivers close to, or of ,driving age. If some or all of them don’t drive the vehicle(s) being insured, exclude them from your policy.

6. Is there a multi-policy discount available? If you have other insurance policies such as: life, health, home, renters, condo, or motorcycle, check with the carrier(s) with whom you have your other policy. See if you qualify for a multi-policy discount if you obtain your auto insurance through them.

7. Does the policy coverage transfer if I rent a vehicle? Make sure that it does. When you rent a vehicle you will need to obtain additional insurance for rental coverage if your policy does not transfer. This additional insurance adds up quickly and can be quite expensive, commonly upwards of $20.00 per day.

8. What are my payment options? Can I pay monthly? Quarterly? In full? Most insurance companies charge a fee when you pay your policy in payments. Monthly is usually the most expensive. See if there are other payment plans that will cost you less.

9. Do I need to cancel my old policy or will you do that for me if I purchase my policy from you? If you decide to change insurance companies, don’t forget to cancel your old insurance policy. It sounds like common sense, but in this busy day and age, people often forget to cancel their existing policy and end up paying for both policies when they don’t need to. Some agents or insurance companies will do this for you, but it is not common.

10. Are there any issues with my credit that may affect my rates? Check your credit report and clean up any discrepancies or issues. Several states use your credit report to assess risk and a person with a better credit score will typically save some money.

How to Choose a Reputable Auto Insurance Company

2009-08-18T06:54:00.000-07:00

Perhaps worse than shopping for a car and dealing with car salesmen, is the task of shopping for insurance. How do you know what companies are reputable and which are just out to take your money and provide little in return? Before you shop, the first question to ask yourself is what is it you want from your auto insurance company. Mainly, you want them to:

• Be honest with you – tell you what coverages you need given your circumstances and how much it will cost
• Be responsive to your questions – have someone available to answer your coverage and claim questions
• Have a history of good service
• Be fair – handle your claims in a fair and timely fashion
• Have a strong financial outlook
• Have few complaints filed against them
• Be rated highly by private rating services

You can certainly ask your friends and family members for their personal recommendations. After all, your cousin Joe had a good experience with ABC Company when he made a claim following his motorcycle accident, and your Aunt Sophie raves about her insurance broker for XYZ. But beyond individual references, if you want factual information about insurance companies to find out how they are rated in the industry, and whether or not there have been complaints filed against them and what type, your best source of information is none other than where you are reading this article right now—the Internet.

First, start with the website for your state’s Department of Insurance. (It may go by a different name, such as Insurance Division, for example, so just Google state insurance department.) The sites are packed with free insurance information for consumers. All complaints against insurers that do business in your state must go through this state department, and you can usually conduct a search to find out how many complaints were made, see the reasons for the complaints and how they were handled. You can find out if a company you are considering going with is licensed to sell insurance in your state, how long they’ve been licensed and how many complaints they have received in recent years.

Note, that if you buy from an unlicensed insurance provider, your department of insurance may have little or no regulatory authority to assist you if you have a problem later on. And if they go bankrupt, you will have no protection from your state, most of which have certain consumer guarantees in place.

As for rating the financial condition of an insurance company, there is a free tool online called the Consumer Information Source from The National Association of Insurance Commissioners (NAIC). It lets you look up complaints and licensing, as well as financial information for specific companies by state as long as they are in their database. If a company is not in their database, it is probably not a licensed insurer.

There are also several private online rating services that can help you make a decision about which insurer is best suited for you based on financial analyses and other criteria. While they carry no guarantees, their opinions can be valuable because they are opinions from a private analyst’s unbiased perspective. Ratings can be obtained by phone, mail or Internet, but in order to make sense of these ratings for any given insurance company, a good practice is to always get an explanation of the rating criteria so you know how it applies. Another good habit is to get ratings from prior years so it can be compared to the most current information.

Here is a list of some free rating services that provide rating information for insurance companies:

• The A.M. Best Company provides unlimited access to browse its own Best's Rating Center after signing up for a free online account. You’ll have access to detailed insurance scores and company information, including license and financial info for insurers worldwide. Many local libraries subscribe to Best’s Insurance Reports if you’d like to get a hard copy without having to print it out yourself.
• Fitch Ratings has an alphabetical listing of over 2,700 insurance companies that it can provide ratings for on its website. The e-mail of the analyst(s) is provided on each rating along with the companiy's NAIC identification number.
• Moody's Investor Service gives unlimited ratings of insurance companies and other financial institutions to registered users via its online service. A free account is required.
• Standard & Poors has its “RatingsDirect” service, which taps into credit (financial) ratings and research on companies in nearly 100 countries. The site is not as user-friendly as the others, but you can sign up for a free account to view insurers’ credit ratings and company profiles.

You may also visit any of these sites to get a phone number with which you can call to speak to a person and get free ratings over the phone.

Just remember to do your homework first so you feel comfortable and confident that you have gotten all of the information that is available. Then your decision will be an educated one, and whichever company you decide to go with, you will feel good about your choice.

Public auto insurance

2009-08-18T06:50:00.000-07:00

Publics auto insurance is a government owned and operated system of automobile insurance operated in the Canadian provinces of British Columbia, Saskatchewan, Manitoba and Quebec. According to studies by the Consumers' Association of Canada, rates charged for auto insurance in these four provinces are lower than in provinces that use a private auto insurance system.^[1] In Quebec public auto insurance is limited to coverage of personal injuries while damage to property is covered by private insurers.^[2] Saskatchewan has the oldest public auto insurance system with Saskatchewan Government Insurance being founded in 1945. Manitoba Public Insurance was created in 1971 followed by the Insurance Corporation of British Columbia in 1973 and the Société de l'assurance automobile du Québec in 1977.

Other provinces have considered introducing a public auto insurance system. The Ontario New Democratic Party won the 1990 provincial election on a platform that included public auto insurance. After assuming office, Premier Bob Rae appointed Peter Kormos, one of the most vocal proponents of public insurance, as the minister responsible for bringing forward the policy.^[3] With the onset of the recession, however, both business and labour groups expressed concern about layoffs and lost revenues.^[4] The government rejected the policy in 1991.

Public auto insurance has also been considered in New Brunswick after private insurance rates nearly doubled from 2003 to 2005, but was ultimately rejected by the provincial government.^[5] It was also an issue in Nova Scotia during its 2003 provincial election and remains in the platform of the official opposition, the Nova Scotia New Democratic Party.^[6] It was also under consideration by the Newfoundland and Labrador Progressive Conservative government of Danny Williams in 2004 as a "last resort" when private insurance firms threatened to pull out of the province in response to legislation rolling back premiums.[7

CHOICE IN AUTO INSURANCE

2009-08-18T06:39:00.000-07:00

Saskatchewan people will soon have a choice of what type of auto injury

insurance they want. In an effort to better meet the needs of all

residents, a choice of tort or no-fault insurance will be offered.

Details of the two options were outlined today with the introduction of

amendments to The Automobile Accident Insurance Act.

"The new tort coverage will be available January 1st, 2003 to meet the

needs of those people in the province who want an alternative to no-fault

insurance," Crown Investments Corporation Minister Maynard Sonntag

said. "No-fault insurance is also being improved as recommended by the

independent committee that reviewed the coverage.

"These changes mean Saskatchewan people can choose between two quality auto

injury insurance products and, with information and assistance from their

independent insurance broker, can decide which product best meets their

needs and the needs of their family members."

The new tort coverage provides some benefits regardless of accident

circumstances and allows the right to sue for pain and suffering, subject

to a $5,000 deductible. Like the benefits under no-fault insurance, they

will be indexed annually to the rate of inflation. This tort product

compares very favourably to other tort options available in North America.

The choice of auto injury insurance is not limited to vehicle owners. All

Saskatchewan residents 18 and over can choose their coverage. Parents can

pick the coverage for their children.

To ensure no Saskatchewan person is without injury insurance coverage, all

people will be covered by no-fault insurance unless they choose to opt out

and pick tort coverage. This process will be simple. A one-page notice

can be filed at any of the 435 SGI motor licence issuers in Saskatchewan.

On introduction, both tort and no-fault will cost the same and there will

be no fees for changing your auto injury insurance.

"SGI is working with the Insurance Brokers' Association of Saskatchewan to

co-ordinate a broker-issuer training program and education materials for

consumers," Sonntag said. "SGI understands the important role of brokers

and issuers in assisting Saskatchewan residents in making insurance

decisions. Choosing your auto injury insurance coverage is no different.

Saskatchewan's independent insurance professionals will provide individual

and timely support to Saskatchewan residents as they make their auto injury

insurance purchasing decisions."

Vechial Insurance

2009-08-18T06:26:00.000-07:00

Vehicle insurance (also known as auto insurance, car insurance, or motor insurance) is insurance purchased for cars, trucks, and other vehicles. Its primary use is to provide protection against losses incurred as a result of traffic accidents and against liability that could be incurred in an accident.

Public policy

In many jurisdictions it is compulsory to have vehicle insurance before using or keeping a motor vehicle on public roads. Most jurisdictions relate insurance to both the car and the driver, however the degree of each varies greatly.

A 1994 study by Jeremy Jackson and Roger Blackman^[1] showed, consistent with the risk homeostasis theory, that increased accident costs caused large and significant reductions in accident frequencies.

Coverage levels

Vehicle insurance can cover some or all of the following items:

The insured party
The insured vehicle
Third parties (car and people)
In some States coverage for injuries to persons riding in the insured vehicle is available without regard to fault in the auto accident (No Fault Auto Insurance)

Different policies specify the circumstances under which each item is covered. For example, a vehicle can be insured against theft, fire damage, or accident damage independently.

Excess

An excess payment, also known as a deductible, is the fixed contribution you must pay each time your car is repaired through your car insurance policy. Normally the payment is made directly to the accident repair "garage" (The term "garage" refers to an establishment where vehicles are serviced and repaired) when you collect the car. If one's car is declared to be a "write off" or "total loss"("write off" is commonly used in motor insurance to describe a vehicle the worth of which is less than the cost of repair), the insurance company will deduct the excess agreed on the policy from the settlement payment it makes to you.

If the accident was the other driver's fault, and this is accepted by the third party's insurer, you'll be able to reclaim your excess payment from the other person's insurance company.

Compulsory excess

A compulsory excess is the minimum excess payment your insurer will accept on your insurance policy. Minimum excesses vary according to your personal details, driving record and insurance company.

Voluntary excess

In order to reduce your insurance premium, you may offer to pay a higher excess than the compulsory excess demanded by your insurance company. Your voluntary excess is the extra amount over and above the compulsory excess that you agree to pay in the event of a claim on the policy. As a bigger excess reduces the financial risk carried by your insurer, your insurer is able to offer you a significantly lower premium.

Basis of premium charges

Main article: auto insurance risk selection

Depending on the jurisdiction, the insurance premium can be either mandated by the government or determined by the insurance company in accordance to a framework of regulations set by the government. Often, the insurer will have more freedom to set the price on physical damage coverages than on mandatory liability coverages.

When the premium is not mandated by the government, it is usually derived from the calculations of an actuary based on statistical data. The premium can vary depending on many factors that are believed to have an impact on the expected cost of future claims.^[8] Those factors can include the car characteristics, the coverage selected (deductible, limit, covered perils), the profile of the driver (age, gender, driving history) and the usage of the car (commute to work or not, predicted annual distance driven).^[9]

Gender

Men average more miles driven per year than women do, and consequently have a proportionally higher accident involvement at all ages. Insurance companies cite women's lower accident involvement in keeping the youth surcharge lower for young women drivers than for their male counterparts, but adult rates are generally unisex. Reference to the lower rate for young women as "the women's discount" has caused confusion that was evident in news reports on a recently defeated EC proposal to make it illegal to consider gender in assessing insurance premiums.^[10] Ending the discount would have made no difference to most women's premiums.^{[citation needed]}

Age

Teenage drivers who have no driving record will have higher car insurance premiums. However, young drivers are often offered discounts if they undertake further driver training on recognised courses, such as the Pass Plus scheme in the UK. In the U.S. many insurers offer a good grade discount to students with a good academic record and resident student discounts to those who live away from home. Generally insurance premiums tend to become lower at the age of 25. Senior drivers are often eligible for retirement discounts reflecting lower average miles driven by this age group.

Marital status

Drivers who are unmarried are often charged higher insurance premiums as opposed to married drivers.

Vehicle classification

Owners of sports cars, muscle cars, some sport utility vehicles, and motorcycles would have higher insurance premiums as opposed to compact cars, midsized cars, or luxury cars. However, in the case of motorcycles, the chance of causing extensive damage to other vehicles is relatively low (as opposed to damage to oneself) and thus liability insurance premiums are often lower.

Distance

Some car insurance plans do not differentiate in regard to how much the car is used. However, methods of differentiation would include:

Reasonable estimation

Several car insurance plans rely on a reasonable estimation of the average annual distance expected to be driven which is provided by the insured. This discount benefits drivers who drive their cars infrequently but has no actuarial value since it is unverified.

Odometer-based systems

Cents Per Mile Now^[11](1986) advocates classified odometer-mile rates. After the company's risk factors have been applied and the customer has accepted the per-mile rate offered, customers buy prepaid miles of insurance protection as needed, like buying gallons of gasoline. Insurance automatically ends when the odometer limit (recorded on the car’s insurance ID card) is reached unless more miles are bought. Customers keep track of miles on their own odometer to know when to buy more. The company does no after-the-fact billing of the customer, and the customer doesn't have to estimate a "future annual mileage" figure for the company to obtain a discount. In the event of a traffic stop, an officer could easily verify that the insurance is current by comparing the figure on the insurance card to that on the odometer.

Critics point out the possibility of cheating the system by odometer tampering. Although the newer electronic odometers are difficult to roll back, they can still be defeated by disconnecting the odometer wires and reconnecting them later. However, as the Cents Per Mile Now website points out:

As a practical matter, resetting odometers requires equipment plus expertise that makes stealing insurance risky and uneconomical. For example, in order to steal 20,000 miles (32,000 km) of continuous protection while paying for only the 2,000 miles (3,200 km) from 35,000 miles (56,000 km) to 37,000 miles (60,000 km) on the odometer, the resetting would have to be done at least nine times to keep the odometer reading within the narrow 2,000-mile (3,200 km) covered range. There are also powerful legal deterrents to this way of stealing insurance protection. Odometers have always served as the measuring device for resale value, rental and leasing charges, warranty limits, mechanical breakdown insurance, and cents-per-mile tax deductions or reimbursements for business or government travel. Odometer tampering—detected during claim processing—voids the insurance and, under decades-old state and federal law, is punishable by heavy fines and jail.

Under the cents-per-mile system, rewards for driving less are delivered automatically without need for administratively cumbersome and costly GPS technology. Uniform per-mile exposure measurement for the first time provides the basis for statistically valid rate classes. Insurer premium income automatically keeps pace with increases or decreases in driving activity, cutting back on resulting insurer demand for rate increases and preventing today's windfalls to insurers when decreased driving activity lowers costs but not premiums.

GPS-based system

In 1998, Progressive Insurance started a pilot program in Texas in which drivers received a discount for installing a GPS-based device that tracked their driving behavior and reported the results via cellular phone to the company.^[12] Policyholders were reportedly more upset about having to pay for the expensive device than they were over privacy concerns.^[13] The program was discontinued in 2000.

OBDII-based system

In 2008, The Progressive Corporation launched MyRate to give drivers a customized insurance rate based on how, how much, and when their car is driven. MyRate is currently available in Alabama, Kentucky, Louisiana, Michigan, Minnesota, Maryland, New Jersey and Oregon. Driving data is transmitted to the company using an on-board telematic device. The device connects to a car's OnBoard Diagnostic (OBD-II) port (all automobiles built after 1996 have an OBD-II.) and transmits speed, time of day and number of miles the car is driven. There is no GPS in the MyRate device, so no location information is collected. Cars that are driven less often, in less risky ways and at less risky times of day can receive large discounts. Progressive has received patents on its methods and systems of implementing usage-based insurance and has licensed these methods and systems to other companies. Progressive has service marks pending on the terms Pay As You Drive and Pay How You Drive.