Knowing the type of coverage you need for your car insurance will help you in a couple of ways. First, by knowing what you need before you search for auto insurance, you will be better able to avoid overspending and purchasing coverage that wouldn’t benefit you. Second, you will be better prepared to know what you want as part of your coverage so you are better protected. Having the right coverage for a classic or modified car can be a little more complicated than finding coverage for a typical vehicle. There are a few details in auto insurance that are different for classic and modified cars compared to auto insurance for typical vehicles. Knowing these differences can help get your vehicle better protection and get you the right coverage.
These cars — classic cars and modified cars — are usually a hobby for the owners. Whether the owner spends time upgrading their car with turbos or simply loves to cruise the streets in their mint condition ‘67 Chevy, this is a way for these owners to relax and do something that brings them happiness. Unlike most hobbies, a form of auto insurance or financial responsibility is needed for these vehicles so owners can legally drive them around and fully enjoy the experience. Not only is this necessary for legal reasons, but auto insurance for these types of vehicles should be a priority for any driver to ensure they can get the cash value of the car should it be stolen or damaged.
Car Insurance for Modified Cars
The premium cost to insure a modified car will vary, depending on what kind of modifications the owner has made to the car after purchase. Why would the cost of insurance rise? Many insurers believe that certain types of modifications decrease the driver’s ability to handle and control the car. This lack of control will probably lead to an accident, and the insurer will then be processing and paying for a claim that is made by the driver of the modified car. Auto insurance companies try to stay ahead of the costs they predict could happen, and to do so, they raise their rates for persons with a higher level of risk.
Many changes that are done to the body of a car have little to no impact on the cost of its insurance. Painting the car or putting stickers or decals on it will probably not push the insurer to raise the insurance price. New wheels may also not increase the premium, unless they are substantially more expensive than the stock wheels. There is also the chance that a new stereo would make the premium cost fluctuate. Keep in mind, if those new wheels or stereo (or any new part to the car) are damaged or stolen, the insurance company is to repair or replace all of it. This is why they might charge you more for different car parts that modify the body of the vehicle.
Once the driver begins to think about modifying anything under the hood of the car, the owner can expect auto insurance cost to rise. Most modifications that are done under the hood will increase the speed and horsepower of the car. It doesn’t take too much intelligence to know that if a car has more speed and power than before, the driver will take advantage of it and drive faster. Auto insurance companies also know this (or predict it), and also know statistically when people drive faster, they are breaking the speed limit and put themselves and others at risk of an accident. While insurance companies are happy to provide insurance to most drivers, they are hoping the driver will never have a need to file a claim.
While most modifications made to a car aren’t noticeable from the outside, some drivers may be tempted to omit telling their auto insurance company about their changes in an effort to save money on their insurance cost. This is your choice, but it is not recommended. If the car is in an accident and there is no record of the changes, upgrades, new parts, etc, the auto insurance company will not be obligated to replace those parts. They will only replace your vehicle at its cash value, which will not include the money that was spent to upgrade the car, and the driver will lose money.
Car Insurance for Classic Cars
Surprisingly to some, auto insurance for classic cars is often cheaper than it is for regular vehicles. This is mostly due to the fact that classic cars are not a driver’s primary source of transportation and are driven far less. Also, these cars are usually kept locked in a storage facility of some kind, which keeps it much safer (and cheaper to insure) than if it was stored on a driveway. Auto insurance companies know most owners of classic cars are very careful in the way they treat their car and drive their car, and insurers reward drivers of this by keeping their insurance costs low.
Classic cars can be insured by specialized insurance companies if their auto insurance company will not insure their classic car. Most auto insurance companies will insure most vehicles, so check with the primary auto insurance company first to see if any discounts can be arranged for having more than one vehicle on a policy. When choosing a policy, look for a coverage known as Agreed Value Coverage for the classic car. Once the auto insurance company has acknowledged your vehicle as a classic car, you can purchase agreed value coverage and in the event the car is totaled or damaged, the owner will be paid the entire value of the amount that was insured.
All cars need auto insurance, whether they are minivans, modified, or classic. Most owners want to know they will be compensated for their loss if their car is damaged or stolen, and auto insurance is really one of the only ways to guarantee that. Be wise and talk to your auto insurance agent or company to know your options of insuring your modified or classic car.
Monday, May 25, 2009
Different Sections of an Auto Insurance Policy
Have you ever taken a closer look at the bulky envelope your auto insurance company sends you every time your policy renews? That packet of paper holds the details of your auto insurance policy and can be a lifesaver when you need to know those details to file a claim. If you haven’t taken the chance to review your policy on paper, make time to do so. Anyone who doesn’t have an auto insurance policy yet but is wanting to know more, read further as we explain the different parts of the auto insurance policy explanation packet. We’ll break down the parts and explain their purpose.
The first part of your insurance policy packet is the declarations page. This page lists the important factors of your policy, starting with information identifying the auto insurance company and the policyholder. The name of your auto insurance company should be listed, as well as their contact information should you ever need to get in touch with them. Not only will you find your insurer’s information, but you should be able to see your information as well. Your name, phone number, and address should be listed on the declarations page, showing you as the policyholder. Along with this information about you, your policy number should be listed too. Your policy number, which can be all numbers or a mix of numbers and letters, is the way the insurance company identifies you first on their records. This way, if two policyholders happen to have the same name, their information will not get confused and will stay private.
The next part of the declarations page names the types of coverage you purchased and the amount you purchased. Usually a detailed explanation of the coverage isn’t provided here, but you can ask your agent for the specific information or search our site for general information regarding that coverage. These may include bodily injury liability, property damage liability, and uninsured or underinsured motorist liability.
In reference to the cost of each coverage, that amount is the maximum amount, or limit, the auto insurance company will pay for an accident. It is these coverage amounts purchased that help decide how much your premium is going to be. One way to lower your premium is by lowering the limits of coverage you purchased. However, this gives you less protection and you may find yourself in the predicament of not having enough if an accident happens.
The deductible amount is also listed on the declarations page. This is the amount you agreed to pay to the auto insurance company when you file a claim to them. Deductible amounts are usually offered in the amounts of $100, $250, $500 and $1,000, but other options may be available from your insurer. The purpose of deductibles is, one, to show the insurer that you have experienced a loss that exceeds a certain amount, and two, to reduce the final cost the insurer is going to pay. To keep your premiums low, sign up for a deductible that is high, such as $500 or better yet, $1,000. Because you agree to pay more for your deductible, the auto insurance company lowers your premium cost.
Also on the declarations page is the policy period, stating exactly when the policy begins and the date it ends. Pay particular attention to the end date so you can renew your policy and not have a lapse in coverage. Almost all auto insurance companies offer to automatically renew your policy for you on that date so you will always have continuous coverage. If for some reason you want to cancel your policy (moving out of state, wanting a new insurer), you can cancel on that date before your policy renews, or you can cancel it at any time as long as your next insurance policy can begin on your cancel date.
After the declarations page is a section with actual contract language that will go over the details of the coverage you purchased, and the rights and responsibilities of the auto insurance company and of you, the policyholder. It’s common knowledge that auto insurance companies have the responsibility to pay for the coverage that was bought by the policyholder, but they also have rights that protect them from any scandalous activity, like insurance fraud. It is good to know both your rights as the policyholder and the insurer’s rights so any disreputable activity can be reported. Of course, if this “contract language” is too difficult to understand, review it with a lawyer or call the insurance company and have them explain the details.
There may be an additional section in your packet, known as the endorsement section. An endorsement is something that changes the policy, and those changes must be written somewhere in the contractual agreement. These endorsements expand the policyholder’s coverage in the policy and are made by the auto insurance company. Remember that any time you make a change to your policy, you are affecting the premium cost and your rates will change too. This section is beneficial since you may need to make a change to your policy before your policy ends and renews. For instance, your teenager may begin to drive in the middle of the policy and he needs to be added to the policy at this time. A quick call to your insurance agent or company and they will construct an endorsement that changes your policy, allowing your teenager to be covered. Your new rates will begin then as well.
One last thing included in your policy packet is your proof of insurance card. These cards will show any law enforcement officer that you are carrying auto insurance, which is a law in most states. They should be kept in your glove box or other safe place in your car so you always have them available.
Knowing the particulars of your auto insurance policy will make sure that you have the exact type of coverage you want, instead of wishfully thinking you have options when in reality you don’t. Go through the policy packet every time you get it to make sure nothing has been missed, and if you have any questions, contact your auto insurance company for better clarification.
The first part of your insurance policy packet is the declarations page. This page lists the important factors of your policy, starting with information identifying the auto insurance company and the policyholder. The name of your auto insurance company should be listed, as well as their contact information should you ever need to get in touch with them. Not only will you find your insurer’s information, but you should be able to see your information as well. Your name, phone number, and address should be listed on the declarations page, showing you as the policyholder. Along with this information about you, your policy number should be listed too. Your policy number, which can be all numbers or a mix of numbers and letters, is the way the insurance company identifies you first on their records. This way, if two policyholders happen to have the same name, their information will not get confused and will stay private.
The next part of the declarations page names the types of coverage you purchased and the amount you purchased. Usually a detailed explanation of the coverage isn’t provided here, but you can ask your agent for the specific information or search our site for general information regarding that coverage. These may include bodily injury liability, property damage liability, and uninsured or underinsured motorist liability.
In reference to the cost of each coverage, that amount is the maximum amount, or limit, the auto insurance company will pay for an accident. It is these coverage amounts purchased that help decide how much your premium is going to be. One way to lower your premium is by lowering the limits of coverage you purchased. However, this gives you less protection and you may find yourself in the predicament of not having enough if an accident happens.
The deductible amount is also listed on the declarations page. This is the amount you agreed to pay to the auto insurance company when you file a claim to them. Deductible amounts are usually offered in the amounts of $100, $250, $500 and $1,000, but other options may be available from your insurer. The purpose of deductibles is, one, to show the insurer that you have experienced a loss that exceeds a certain amount, and two, to reduce the final cost the insurer is going to pay. To keep your premiums low, sign up for a deductible that is high, such as $500 or better yet, $1,000. Because you agree to pay more for your deductible, the auto insurance company lowers your premium cost.
Also on the declarations page is the policy period, stating exactly when the policy begins and the date it ends. Pay particular attention to the end date so you can renew your policy and not have a lapse in coverage. Almost all auto insurance companies offer to automatically renew your policy for you on that date so you will always have continuous coverage. If for some reason you want to cancel your policy (moving out of state, wanting a new insurer), you can cancel on that date before your policy renews, or you can cancel it at any time as long as your next insurance policy can begin on your cancel date.
After the declarations page is a section with actual contract language that will go over the details of the coverage you purchased, and the rights and responsibilities of the auto insurance company and of you, the policyholder. It’s common knowledge that auto insurance companies have the responsibility to pay for the coverage that was bought by the policyholder, but they also have rights that protect them from any scandalous activity, like insurance fraud. It is good to know both your rights as the policyholder and the insurer’s rights so any disreputable activity can be reported. Of course, if this “contract language” is too difficult to understand, review it with a lawyer or call the insurance company and have them explain the details.
There may be an additional section in your packet, known as the endorsement section. An endorsement is something that changes the policy, and those changes must be written somewhere in the contractual agreement. These endorsements expand the policyholder’s coverage in the policy and are made by the auto insurance company. Remember that any time you make a change to your policy, you are affecting the premium cost and your rates will change too. This section is beneficial since you may need to make a change to your policy before your policy ends and renews. For instance, your teenager may begin to drive in the middle of the policy and he needs to be added to the policy at this time. A quick call to your insurance agent or company and they will construct an endorsement that changes your policy, allowing your teenager to be covered. Your new rates will begin then as well.
One last thing included in your policy packet is your proof of insurance card. These cards will show any law enforcement officer that you are carrying auto insurance, which is a law in most states. They should be kept in your glove box or other safe place in your car so you always have them available.
Knowing the particulars of your auto insurance policy will make sure that you have the exact type of coverage you want, instead of wishfully thinking you have options when in reality you don’t. Go through the policy packet every time you get it to make sure nothing has been missed, and if you have any questions, contact your auto insurance company for better clarification.
Is Your Auto Insurance Company Rated?
Several national rating institutions rate insurance companies. Do coverages, rates, and service vary from company to company? Why can you pay less with one company than another can for the same coverages? Choosing the best insurance company for you is a crucial financial decision. Does your insurance company have the financial strength to safeguard you and your family? If the company cannot pay future claims or benefits, other issues become far less relevant. Financial strength ratings are an analysis of a wide variety of risks that could affect an insurance company's long-term viability. Insurance companies have failed or ceased to operate due to inadequate financial strength, competitive forces, or changing dynamics in the marketplace.
Standard & Poor's Ratings (http://www.standardandpoors.com)Financial strength ratings of insurance companies, plus detailed financial Insurer Profiles on nearly 4,000 companies.
Fitch Ratings (http://www.fitchratings.com) Financial strength ratings of insurance companies.
Have you heard of the company where you are considering purchasing coverage? Do you have any experience with the company?
Ask your peers what experiences they have had. What is your sense of the reputation of the company? How quickly and easily are claims processed? Is there 24-hour claims service? Is the claims management in the house of the insurance company or have they outsourced? Auto insurance is meant to make you whole in the case of an accident with injury or property damage. It is to protect your assets and protect you from liability. You will want the peace of mind of a superior rated company when it comes time to manage and pay the claim. The financial health of a car insurance company is an often-overlooked area when shopping for the best auto insurance rate. It is human nature to make your comparison solely on the rates for the coverages. While this is certainly important, you should be aware of the company's overall rating and level of satisfaction. Consulting insurance company ratings is crucial. Each insurance company issues a quarterly report that is publicly accessible. You cannot always tell the future from the past. However, the past performance is a valuable insight into what expectation to have for your future coverage. One of the factors that are used in order to determine the companies' ratings is how long they have been in business. If there is no history, you may be taking an unnecessary chance. Look for a company that has a history and make sure that history shows good performance.
What about the reputation of the insurance company? It is very simple to find this information. Just ask around. There are your peers, the BBB, and family. Many times these resources closest to you will be able to share experiences that are favorable or unfavorable regarding the company you are considering. In addition, each state has a Department of Insurance that keeps public information about companies. Use all the resources you can to determine which company is best for you. Once you have paid for the policy, you will then become keenly interested in customer service. Be aware of what the source of information is regarding the insurance company. Many companies put our information about themselves in the form of illustrations that are intended to make them look as good as possible. Of course, while these illustrations must be factual, you should be aware that you are not receiving objective information.
How can you quickly check the company rating? You are on the internet now. Surely, there is a quick way.
Go to http://www.carinsurance.com. Not only will you get the rates of various insurance companies, you will see the A.M. Best rating for each company along side their rates for you personal situation.
Now is the time for your fingers to punch their way to a quick rate analysis and view the ratings at the same time.
Standard & Poor's Ratings (http://www.standardandpoors.com)Financial strength ratings of insurance companies, plus detailed financial Insurer Profiles on nearly 4,000 companies.
Fitch Ratings (http://www.fitchratings.com) Financial strength ratings of insurance companies.
Have you heard of the company where you are considering purchasing coverage? Do you have any experience with the company?
Ask your peers what experiences they have had. What is your sense of the reputation of the company? How quickly and easily are claims processed? Is there 24-hour claims service? Is the claims management in the house of the insurance company or have they outsourced? Auto insurance is meant to make you whole in the case of an accident with injury or property damage. It is to protect your assets and protect you from liability. You will want the peace of mind of a superior rated company when it comes time to manage and pay the claim. The financial health of a car insurance company is an often-overlooked area when shopping for the best auto insurance rate. It is human nature to make your comparison solely on the rates for the coverages. While this is certainly important, you should be aware of the company's overall rating and level of satisfaction. Consulting insurance company ratings is crucial. Each insurance company issues a quarterly report that is publicly accessible. You cannot always tell the future from the past. However, the past performance is a valuable insight into what expectation to have for your future coverage. One of the factors that are used in order to determine the companies' ratings is how long they have been in business. If there is no history, you may be taking an unnecessary chance. Look for a company that has a history and make sure that history shows good performance.
What about the reputation of the insurance company? It is very simple to find this information. Just ask around. There are your peers, the BBB, and family. Many times these resources closest to you will be able to share experiences that are favorable or unfavorable regarding the company you are considering. In addition, each state has a Department of Insurance that keeps public information about companies. Use all the resources you can to determine which company is best for you. Once you have paid for the policy, you will then become keenly interested in customer service. Be aware of what the source of information is regarding the insurance company. Many companies put our information about themselves in the form of illustrations that are intended to make them look as good as possible. Of course, while these illustrations must be factual, you should be aware that you are not receiving objective information.
How can you quickly check the company rating? You are on the internet now. Surely, there is a quick way.
Go to http://www.carinsurance.com. Not only will you get the rates of various insurance companies, you will see the A.M. Best rating for each company along side their rates for you personal situation.
Now is the time for your fingers to punch their way to a quick rate analysis and view the ratings at the same time.
Thursday, May 21, 2009
Why YOU Need Auto Insurance?
Do you really think you can get by without auto insurance? If you don’t own a car and will never drive, then yes. You have no real reason to purchase auto insurance. However, since you are here, there’s a really good chance you are new to auto insurance and are looking to purchase your first policy, or you have an existing policy but you are ready to switch companies for a new policy, or you are simply trying to learn more about auto insurance. We can help you with all three, but right now we will prove why all drivers need auto insurance in the first place.
#1 - It’s the law
That’s right, folks. By law every driver is required to carry auto insurance or another form of financial responsibility in almost every state. The law is designed to protect drivers from being forced to pay for someone else’s mistake, which means essentially it is protecting you from having to pay for damages made to your car by another driver’s negligent driving.
The specific requirements vary from state to state, but almost every state requires a minimum amount of bodily injury liability and property damage liability. These two coverages will pay for the damages you make to another person’s car, property, and/or body as part of your negligent driving. The amount you purchase will be the limit of what the insurance company will pay out to the other party on behalf of you after you have filed the claim, which may include any death expenses. Make sure to purchase enough of both bodily injury liability per person and per accident, as well as enough property damage liability. Any remaining balance after the insurance has taken care of their part will be turned over to you, which you must pay for out of your own pockets.
#2 - It’ll pay off when you make a claim
Carrying auto insurance will not only give you peace of mind as you or members of your policy drive around town, but paying regularly for auto insurance will literally pay off should you ever need to make a claim. The cost to repair vehicles, or especially to replace them should they be totaled, is quite expensive due to the high cost of cars these days. Knowing you can rely on your auto insurance company to pay for these expenses can ease the stress that is felt after an accident.
Not only can your auto insurance policy pay for the damages you cause to another person’s property, but with the right coverage purchased, your auto insurance policy can also cover the damages that come upon your vehicle, whether you were at fault for the accident or not. Note, however, that in purchasing only the state minimum requirements, your vehicle and injuries will not be covered by your insurer.
#3 - It can help with medical bills
Even if you have access to decent health insurance, you should be aware that auto insurance companies offer ways to also provide medical bill assistance. Coverage options known as medical payment (med pay) and personal injury protection can pay for the medical bills that are a result of the accident. One perk of med pay is it will cover chiropractor costs, when regular health insurance usually won’t. Both med pay and personal injury protection are worth considering, especially if you are a regular driver of a carpool group. Personal injury protection will cover the medical expenses of your passengers, whether or not they are members of your policy, up to the amount you have purchased, and so will pedestrians that have been hit by your car.
#4 - Comprehensive and collision are required by your loan/lease company
Any time a vehicle is not 100% owned by the driver, but is under a loan or lease, the driver will be required by the loan or lease company to carry comprehensive and collision coverage on their auto insurance policy. This is so the company will be paid their money in full even if the vehicle has been damaged or stolen.
Because newer vehicles lose their value quickly, there tends to be a gap between the amount owed for the vehicle and the cash value of the car. If the car is damaged or stolen and the insurance company only pays the cash value, which happens to be less than the owed amount at the time, the remaining balance is to be paid by the driver (or the name carrying the loan). A coverage called GAP insurance will cover this balance so the driver isn’t paying out of pocket for the difference.
#5 - Get financially protected from drivers who fail to carry auto insurance
Another reason to get auto insurance is because there are drivers out there who refuse to carry any auto insurance or a small amount. Consider a coverage option known as uninsured or underinsured motorist liability is a possible candidate for your auto insurance policy. By purchasing, your auto insurance company agrees to pay for certain damages or injuries that are caused by another driver who carries little to no auto insurance. Sure, you could try to sue the driver for damages, but if they don’t have any money or assets, you won’t be seeing much money from them and you will be left paying the bill when it was their mistake.
If you are tempted to try to get away without having auto insurance, think twice, and then think a little more. More and more State Departments of Transportation and Motor Vehicle Divisions are using databases that keep track of driver’s auto insurance policies, such as when they expire and get renewed. Auto insurance companies notify these departments when a policyholder has canceled, and if another company does not notify the departments with a new policy for that person, the departments go after them to find out why they no longer have auto insurance. It is also required to show proof of insurance to a police officer when in an accident, and sometimes officers ask for your proof when pulled over for a traffic ticket.
Consequences for not having auto insurance can get expensive and brutal. The first offense usually includes a fine of a few hundred dollars and the suspension of the vehicle’s registration or the driver’s license. Repeat offenders see heftier fines and possible jail time.
#1 - It’s the law
That’s right, folks. By law every driver is required to carry auto insurance or another form of financial responsibility in almost every state. The law is designed to protect drivers from being forced to pay for someone else’s mistake, which means essentially it is protecting you from having to pay for damages made to your car by another driver’s negligent driving.
The specific requirements vary from state to state, but almost every state requires a minimum amount of bodily injury liability and property damage liability. These two coverages will pay for the damages you make to another person’s car, property, and/or body as part of your negligent driving. The amount you purchase will be the limit of what the insurance company will pay out to the other party on behalf of you after you have filed the claim, which may include any death expenses. Make sure to purchase enough of both bodily injury liability per person and per accident, as well as enough property damage liability. Any remaining balance after the insurance has taken care of their part will be turned over to you, which you must pay for out of your own pockets.
#2 - It’ll pay off when you make a claim
Carrying auto insurance will not only give you peace of mind as you or members of your policy drive around town, but paying regularly for auto insurance will literally pay off should you ever need to make a claim. The cost to repair vehicles, or especially to replace them should they be totaled, is quite expensive due to the high cost of cars these days. Knowing you can rely on your auto insurance company to pay for these expenses can ease the stress that is felt after an accident.
Not only can your auto insurance policy pay for the damages you cause to another person’s property, but with the right coverage purchased, your auto insurance policy can also cover the damages that come upon your vehicle, whether you were at fault for the accident or not. Note, however, that in purchasing only the state minimum requirements, your vehicle and injuries will not be covered by your insurer.
#3 - It can help with medical bills
Even if you have access to decent health insurance, you should be aware that auto insurance companies offer ways to also provide medical bill assistance. Coverage options known as medical payment (med pay) and personal injury protection can pay for the medical bills that are a result of the accident. One perk of med pay is it will cover chiropractor costs, when regular health insurance usually won’t. Both med pay and personal injury protection are worth considering, especially if you are a regular driver of a carpool group. Personal injury protection will cover the medical expenses of your passengers, whether or not they are members of your policy, up to the amount you have purchased, and so will pedestrians that have been hit by your car.
#4 - Comprehensive and collision are required by your loan/lease company
Any time a vehicle is not 100% owned by the driver, but is under a loan or lease, the driver will be required by the loan or lease company to carry comprehensive and collision coverage on their auto insurance policy. This is so the company will be paid their money in full even if the vehicle has been damaged or stolen.
Because newer vehicles lose their value quickly, there tends to be a gap between the amount owed for the vehicle and the cash value of the car. If the car is damaged or stolen and the insurance company only pays the cash value, which happens to be less than the owed amount at the time, the remaining balance is to be paid by the driver (or the name carrying the loan). A coverage called GAP insurance will cover this balance so the driver isn’t paying out of pocket for the difference.
#5 - Get financially protected from drivers who fail to carry auto insurance
Another reason to get auto insurance is because there are drivers out there who refuse to carry any auto insurance or a small amount. Consider a coverage option known as uninsured or underinsured motorist liability is a possible candidate for your auto insurance policy. By purchasing, your auto insurance company agrees to pay for certain damages or injuries that are caused by another driver who carries little to no auto insurance. Sure, you could try to sue the driver for damages, but if they don’t have any money or assets, you won’t be seeing much money from them and you will be left paying the bill when it was their mistake.
If you are tempted to try to get away without having auto insurance, think twice, and then think a little more. More and more State Departments of Transportation and Motor Vehicle Divisions are using databases that keep track of driver’s auto insurance policies, such as when they expire and get renewed. Auto insurance companies notify these departments when a policyholder has canceled, and if another company does not notify the departments with a new policy for that person, the departments go after them to find out why they no longer have auto insurance. It is also required to show proof of insurance to a police officer when in an accident, and sometimes officers ask for your proof when pulled over for a traffic ticket.
Consequences for not having auto insurance can get expensive and brutal. The first offense usually includes a fine of a few hundred dollars and the suspension of the vehicle’s registration or the driver’s license. Repeat offenders see heftier fines and possible jail time.
Which Cars Keep Your Insurance Rates Affordable
Do you consider the cost of insurance before you buy your dream car? You should. The Highway Loss Data Institute (HLDI) analyzes the cost to insurance companies from theft, collision, and injury claims as they relate to cars. They look at the color of the cars, how many doors they have, and even break them down type.
The Highway Loss Data Institute is a nonprofit public service organization. It is closely associated with and funded through the Insurance Institute for Highway Safety, which is wholly supported by auto insurers. HLDI gathers, processes, and publishes data on the ways losses vary among different kinds of vehicles.
Four door cars have a 93% less chance of having a claim related to theft than their sibling 2-Door cars. Buy a Buick LeSabre and have relatively no chance of a theft loss. Compare that to the convertible Chevrolet Corvette that has over 5 times the average theft rate. You may have known that. However, did you know that the Toyota Celica has a 67% higher chance of theft than the Toyota Camry?
One of the factors that come into play with insurance claims is the cost of repairing a vehicle and the safety features a vehicle has that can keep down the bodily injury claims. To find out which cars are considered “Top Safety Picks” you can check with the Insurance Institute for Highway Safety (IIHS).
The IIHS top safety picks category recognizes vehicles that do the best job of protecting people in front, side, and rear crashes based on good ratings in Institute tests. Winners also have to have electronic stability control (ESC), which research shows significantly reduces crash risk. Crash tests like the ones conducted by the IIHS have driven major improvements in the designs of all kinds and sizes of passenger vehicles and thus making cars safer for motorists.
The IIHS’s list of top picks for safety performance is something to check out when going to buy a car so that you can see not only if your car is rated in crash tests but what kind of damages are done to give you an idea of insurance. Each year the IIHS releases their information which is available to the public. As a motorist searching for the right car to keep insurance costs down, keep in mind that the more damage that is done is a crash, low impact to high, the likelihood insurance rates will be higher since the insurer knows it will cost more to repair that vehicle.
You may be surprised at some of the results. For example, the Porsche 911 has a 67% less chance for injury claims than the norm. Go figure. The Mitsubishi Lancer has almost double the injury claim rate over the norm.
Where does your car fit for injury theft and collision? What about your dream car? You need to check out the latest statistics on theft for a vehicle before choosing a car to buy. There are various sources you can search to find the most common vehicles stolen. One source is the National Insurance Crime Bureau (NICB) which has studies showing the top 10 stolen vehicles in each state. While the list of top vehicles stolen may change each year there are some vehicles we continue to see on the list and are continual favorites of thieves. These cars include the:
* Honda Accord
* Toyota Camry
* Ford F-150
* Acura Integra
* Nissan Sentra
* Toyota Corolla
* Toyota Pickups
Then the list of ones that have the most expensive theft claims include such vehicles as the:
* Cadillac Escalade
* Chevrolet Corvette Convertible
* Lincoln Navigator
Vehicles with the least expensive theft claims include some of the following and as you may notice some are older vehicles:
* Buick LeSabre
* Volvo V70 Station Wagon
* Mercury Grand Marquis 4-four
The NICB encourages everyone to follow what it calls a "layered approach" to auto theft protection by employing simple, low-cost suggestions to make vehicles less attractive to thieves. The four layers include common sense, a warning device, an immobilizing device, and a tracking device.
The Highway Loss Data Institute gives information on what vehicles have the most and least expensive claims for injury and collision claims. According to HLDI, the lowest injury claims are from large vehicles - cars, pickup trucks, and sport utility vehicles (SUVs). Small two and four door cars have the highest injury claims. Small cars also are among the highest in collision costs, along with sports cars.
Models in recent years that have had some of the most expensive claims for injuries include:
* Suzuki Esteem 4-door
* Kia Rio 4-door
* Mitsubishi Mirage 2-door
* Kia Spectra 4-doors
* Vehicle Models with some of the least expensive injury claims include:
* GMC Sierra 2500 2-wheel and 4 wheel drives
* Chevrolet Silverado
* GMC Yukon XL 1500 4-wheel
* Chevy Tahoe 2-wheel
Models that are among the least expensive for collision claims include:
* Ford Excursion 2-wheel drive
* GMC 2500
* GMC Safari 4-wheel drive
* GMC Yukon XL 1500 4-wheel drive
* Vehicles that are most expensive for collision claims include:
* Subaru Impreza WRX 4-wheel drive 4-door
* Lexus IS 300 4-door
* Porsche 911 coupe
* Acura RSX
As you can see the cars on the list for having expensive collision claims include many sporty or high performance vehicles. Insuring a high-performance car can easily cost two or three times the insurance amount for an ordinary model due to the high cost of repairs if they are damaged.
If you have the time and energy to do research on theft rates, cost of collision claims and bodily injury claims on a vehicle you can determine what the most affordable car is to insure for your needs. If you do not have this time than you can research the lists that come out each year or so from sources such as the IIHS, HLDI and NHTSA on the most and least expensive vehicles to insure where they take into account many factors such as the ones we mentioned. The lists can vary since the statistics and reporting tools they use in their research vary.
Typically when one is going to buy a car they have an idea of what type of vehicle they want - sedan, SUV, truck, sports car, etc - and one easy and efficient way to decide on the vehicle that will be affordable to you is to figure out what class of vehicle you want and then narrow done your choice to few models. You then can check the research to make sure they are not on the “worst” list for theft, claims, etc. In addition, maybe with luck they will be on the “best” lists. If not they may fall in between which is fine if the car is going to suit your needs the best.
Once your choice is narrowed down to a few vehicles to find out which is the most affordable of these vehicle to insure, just simply get online and search for auto insurance quotes on the various vehicles. Insurance companies or Insurance Marketplaces, such as CarInsurance.com, will allow you to get as many quotes as you need to determine which vehicle you thinking of purchasing is the most affordable. Once you decide on a car to buy it is easy to then just to go ahead and purchase your insurance policy online.
The Highway Loss Data Institute is a nonprofit public service organization. It is closely associated with and funded through the Insurance Institute for Highway Safety, which is wholly supported by auto insurers. HLDI gathers, processes, and publishes data on the ways losses vary among different kinds of vehicles.
Four door cars have a 93% less chance of having a claim related to theft than their sibling 2-Door cars. Buy a Buick LeSabre and have relatively no chance of a theft loss. Compare that to the convertible Chevrolet Corvette that has over 5 times the average theft rate. You may have known that. However, did you know that the Toyota Celica has a 67% higher chance of theft than the Toyota Camry?
One of the factors that come into play with insurance claims is the cost of repairing a vehicle and the safety features a vehicle has that can keep down the bodily injury claims. To find out which cars are considered “Top Safety Picks” you can check with the Insurance Institute for Highway Safety (IIHS).
The IIHS top safety picks category recognizes vehicles that do the best job of protecting people in front, side, and rear crashes based on good ratings in Institute tests. Winners also have to have electronic stability control (ESC), which research shows significantly reduces crash risk. Crash tests like the ones conducted by the IIHS have driven major improvements in the designs of all kinds and sizes of passenger vehicles and thus making cars safer for motorists.
The IIHS’s list of top picks for safety performance is something to check out when going to buy a car so that you can see not only if your car is rated in crash tests but what kind of damages are done to give you an idea of insurance. Each year the IIHS releases their information which is available to the public. As a motorist searching for the right car to keep insurance costs down, keep in mind that the more damage that is done is a crash, low impact to high, the likelihood insurance rates will be higher since the insurer knows it will cost more to repair that vehicle.
You may be surprised at some of the results. For example, the Porsche 911 has a 67% less chance for injury claims than the norm. Go figure. The Mitsubishi Lancer has almost double the injury claim rate over the norm.
Where does your car fit for injury theft and collision? What about your dream car? You need to check out the latest statistics on theft for a vehicle before choosing a car to buy. There are various sources you can search to find the most common vehicles stolen. One source is the National Insurance Crime Bureau (NICB) which has studies showing the top 10 stolen vehicles in each state. While the list of top vehicles stolen may change each year there are some vehicles we continue to see on the list and are continual favorites of thieves. These cars include the:
* Honda Accord
* Toyota Camry
* Ford F-150
* Acura Integra
* Nissan Sentra
* Toyota Corolla
* Toyota Pickups
Then the list of ones that have the most expensive theft claims include such vehicles as the:
* Cadillac Escalade
* Chevrolet Corvette Convertible
* Lincoln Navigator
Vehicles with the least expensive theft claims include some of the following and as you may notice some are older vehicles:
* Buick LeSabre
* Volvo V70 Station Wagon
* Mercury Grand Marquis 4-four
The NICB encourages everyone to follow what it calls a "layered approach" to auto theft protection by employing simple, low-cost suggestions to make vehicles less attractive to thieves. The four layers include common sense, a warning device, an immobilizing device, and a tracking device.
The Highway Loss Data Institute gives information on what vehicles have the most and least expensive claims for injury and collision claims. According to HLDI, the lowest injury claims are from large vehicles - cars, pickup trucks, and sport utility vehicles (SUVs). Small two and four door cars have the highest injury claims. Small cars also are among the highest in collision costs, along with sports cars.
Models in recent years that have had some of the most expensive claims for injuries include:
* Suzuki Esteem 4-door
* Kia Rio 4-door
* Mitsubishi Mirage 2-door
* Kia Spectra 4-doors
* Vehicle Models with some of the least expensive injury claims include:
* GMC Sierra 2500 2-wheel and 4 wheel drives
* Chevrolet Silverado
* GMC Yukon XL 1500 4-wheel
* Chevy Tahoe 2-wheel
Models that are among the least expensive for collision claims include:
* Ford Excursion 2-wheel drive
* GMC 2500
* GMC Safari 4-wheel drive
* GMC Yukon XL 1500 4-wheel drive
* Vehicles that are most expensive for collision claims include:
* Subaru Impreza WRX 4-wheel drive 4-door
* Lexus IS 300 4-door
* Porsche 911 coupe
* Acura RSX
As you can see the cars on the list for having expensive collision claims include many sporty or high performance vehicles. Insuring a high-performance car can easily cost two or three times the insurance amount for an ordinary model due to the high cost of repairs if they are damaged.
If you have the time and energy to do research on theft rates, cost of collision claims and bodily injury claims on a vehicle you can determine what the most affordable car is to insure for your needs. If you do not have this time than you can research the lists that come out each year or so from sources such as the IIHS, HLDI and NHTSA on the most and least expensive vehicles to insure where they take into account many factors such as the ones we mentioned. The lists can vary since the statistics and reporting tools they use in their research vary.
Typically when one is going to buy a car they have an idea of what type of vehicle they want - sedan, SUV, truck, sports car, etc - and one easy and efficient way to decide on the vehicle that will be affordable to you is to figure out what class of vehicle you want and then narrow done your choice to few models. You then can check the research to make sure they are not on the “worst” list for theft, claims, etc. In addition, maybe with luck they will be on the “best” lists. If not they may fall in between which is fine if the car is going to suit your needs the best.
Once your choice is narrowed down to a few vehicles to find out which is the most affordable of these vehicle to insure, just simply get online and search for auto insurance quotes on the various vehicles. Insurance companies or Insurance Marketplaces, such as CarInsurance.com, will allow you to get as many quotes as you need to determine which vehicle you thinking of purchasing is the most affordable. Once you decide on a car to buy it is easy to then just to go ahead and purchase your insurance policy online.
Wednesday, May 20, 2009
8 Teen Auto Insurance Mistakes
Do you have a teenager who drives, or one who will soon? Then you'll probably find out that adding a teen to your car insurance policy is sort of like balancing a valuable vase on a tiger's head: it'll probably end in an accident, and it'll probably be expensive. (Lesson number one: don't balance vases on tigers.)
The bad news: you have a teenager eager to get behind the wheel – and recent RateWatch data shows that adding a teen driver to your auto insurance policy costs over $2,000 a year on average.
The good news: auto insurance rates are coming down, so this is the perfect time to shop for policy savings. It can cost even less if you manage to…
Avoid some of these common mistakes
1. Let your kid get bad grades.
Were you aware that a "good student" discount could take as much as 10–15% off the price of your car insurance policy? You are now. Some parents pay their children to maintain a B average or better; this discount will have your children paying you instead.
2. Buy a new car for your child.
All of those safety features will get you auto insurance discounts, right? They might, but it costs more to insure a new car – for you and your teen. Find a safe, used car and save on car payments and insurance.
3. Skip in-car driver training with your kid.
Let the driving school do it. Right parents? I mean, that's why you pay them the money! Not so. No matter what your state legally requires, the more time you spend in the car teaching your teenager to drive, the better.
4. Don't set a curfew.
Part of raising a child is letting them take responsibility, so there's no reason to impose limits. Well, not exactly. Even if your city doesn't have a curfew for teen drivers, you should consider it. Statistics show that teenage driving deaths rise dramatically from 9 pm to 6 am. And if you remember your own youth, you'll agree that there's no good reason for teens to plan trips past 9–10 pm.
5. Don't worry about packing the car with friends and distractions.
The most common cause of teen accidents is driver distraction – either from a car full of friends or a cell phone that's blowing up. It gets even worse with loud music, texting and taking pictures with a cell phone.
6. Speed, drink and don't wear your seatbelt.
It amounts to telling your teen the law is optional. If your child gets a ticket, restrict access to the car. If it's something serious – like a DUI – take away their driving privileges.
7. Lower your deductibles or keep them the same.
A low deductible means your auto insurance company will pay more if there's an accident. Raise it, and you could knock a lot off your premium. Dropping collision coverage on your teen's car can also save money. Just remember that you'll have to pay more for repairs in both cases, so calculate your savings before making the switch.
8. Make one of the other seven mistakes.
(Just kidding.)
8. Let your teenager drive a small, old car.
If you saw mistake number two and thought you could avoid it by getting your teen an older compact car, you're probably wrong. If it's not a safe car, you won't qualify for safety discounts.
9. You said there were only eight mistakes!
Well, I lied. That's right; I said it: I lied. I'll let you in on a little secret: there are probably way more than nine, or even ten! But do you know the biggest one of all? (Drum roll, please.) Not shopping around to compare rates! Insurance.com data shows the average difference between the highest quote for adding a teen and the lowest quote is over $2,000 a year. Failing to compare auto insurance rates can be a very expensive mistake.
The bad news: you have a teenager eager to get behind the wheel – and recent RateWatch data shows that adding a teen driver to your auto insurance policy costs over $2,000 a year on average.
The good news: auto insurance rates are coming down, so this is the perfect time to shop for policy savings. It can cost even less if you manage to…
Avoid some of these common mistakes
1. Let your kid get bad grades.
Were you aware that a "good student" discount could take as much as 10–15% off the price of your car insurance policy? You are now. Some parents pay their children to maintain a B average or better; this discount will have your children paying you instead.
2. Buy a new car for your child.
All of those safety features will get you auto insurance discounts, right? They might, but it costs more to insure a new car – for you and your teen. Find a safe, used car and save on car payments and insurance.
3. Skip in-car driver training with your kid.
Let the driving school do it. Right parents? I mean, that's why you pay them the money! Not so. No matter what your state legally requires, the more time you spend in the car teaching your teenager to drive, the better.
4. Don't set a curfew.
Part of raising a child is letting them take responsibility, so there's no reason to impose limits. Well, not exactly. Even if your city doesn't have a curfew for teen drivers, you should consider it. Statistics show that teenage driving deaths rise dramatically from 9 pm to 6 am. And if you remember your own youth, you'll agree that there's no good reason for teens to plan trips past 9–10 pm.
5. Don't worry about packing the car with friends and distractions.
The most common cause of teen accidents is driver distraction – either from a car full of friends or a cell phone that's blowing up. It gets even worse with loud music, texting and taking pictures with a cell phone.
6. Speed, drink and don't wear your seatbelt.
It amounts to telling your teen the law is optional. If your child gets a ticket, restrict access to the car. If it's something serious – like a DUI – take away their driving privileges.
7. Lower your deductibles or keep them the same.
A low deductible means your auto insurance company will pay more if there's an accident. Raise it, and you could knock a lot off your premium. Dropping collision coverage on your teen's car can also save money. Just remember that you'll have to pay more for repairs in both cases, so calculate your savings before making the switch.
8. Make one of the other seven mistakes.
(Just kidding.)
8. Let your teenager drive a small, old car.
If you saw mistake number two and thought you could avoid it by getting your teen an older compact car, you're probably wrong. If it's not a safe car, you won't qualify for safety discounts.
9. You said there were only eight mistakes!
Well, I lied. That's right; I said it: I lied. I'll let you in on a little secret: there are probably way more than nine, or even ten! But do you know the biggest one of all? (Drum roll, please.) Not shopping around to compare rates! Insurance.com data shows the average difference between the highest quote for adding a teen and the lowest quote is over $2,000 a year. Failing to compare auto insurance rates can be a very expensive mistake.
Your First Insurance Policy for Your Car
Getting your first insurance policy for your car may not be a priority, but it should be. Your first car insurance policy protects one of your first investments, your car. But buying your first insurance policy for your car can be complicated and often new car insurance shoppers fail to compare car insurance rates and in turn fail to reap the financial benefits of finding the best and affordable car insurance available to them.
Shopping for Your First Insurance Policy: Who Needs Car Insurance?
The question asked by most people shopping for their first insurance policy is who needs an insurance policy and why? The answer is simple: it’s the law. The DMV (Department of Motor Vehicles) requires that you take financial responsibility for owning and operating a car in all fifty states. Car insurance protects you when you cause property damage or bodily injury to someone else when driving your car. If you are caught driving without car insurance you will be charged hefty penalties. Violators can face up to hundreds of dollars in fines for a first time offense. Also, if you are involved in an accident and do not have car insurance, your license may be suspended whether you are at fault or not.
Understand Your First Insurance Policy
Now that you know you know how important it is to get your first insurance policy for your car, you will want to understand how car insurance works before you start deciding on which company you will choose for your first insurance policy. The best place to start is Auto Insurance 101. This article will take you step by step in understanding car insurance. Once you understand how car insurance works and have an idea of what type of car insurance you need, you are on your way to the next step of finding the best and most affordable car insurance for you.
Just Because it is Your First Insurance Policy, that Does Not Mean You Have to Pay Too Much
This is often where first insurance policy buyers get sucked into paying too much for their car insurance. Don't just assume since you are purchasing your first insurance policy that you will have to pay extremely high premiums. Yes, you will pay higher premiums than people who have had car insurance for some time, but that does not mean you can not find affordable car insurance. You ask then how does one find the best and most affordable car insurance? Here is a checklist of ways to find affordable car insurance and the best first insurance for you:
Tips for How to Find the Best Affordable First Insurance
1. Compare first insurance rates online and locally.
2. Know what you need and how much of a first insurance policy so you don't buy more than you want.
3. Tell the car insurance company that you are comparing X amount of companies so they know that you are looking for the best deal.
4. When shopping online or locally for your first insurance policy, make sure you know what car insurance discounts you may be eligible for. If you are unsure, ask the insurance agent of all their discounts.
5. If you are choosing full coverage car insurance, remember the higher your deductible, the cheaper your car insurance premium will be.
Shopping for Your First Insurance Policy: Who Needs Car Insurance?
The question asked by most people shopping for their first insurance policy is who needs an insurance policy and why? The answer is simple: it’s the law. The DMV (Department of Motor Vehicles) requires that you take financial responsibility for owning and operating a car in all fifty states. Car insurance protects you when you cause property damage or bodily injury to someone else when driving your car. If you are caught driving without car insurance you will be charged hefty penalties. Violators can face up to hundreds of dollars in fines for a first time offense. Also, if you are involved in an accident and do not have car insurance, your license may be suspended whether you are at fault or not.
Understand Your First Insurance Policy
Now that you know you know how important it is to get your first insurance policy for your car, you will want to understand how car insurance works before you start deciding on which company you will choose for your first insurance policy. The best place to start is Auto Insurance 101. This article will take you step by step in understanding car insurance. Once you understand how car insurance works and have an idea of what type of car insurance you need, you are on your way to the next step of finding the best and most affordable car insurance for you.
Just Because it is Your First Insurance Policy, that Does Not Mean You Have to Pay Too Much
This is often where first insurance policy buyers get sucked into paying too much for their car insurance. Don't just assume since you are purchasing your first insurance policy that you will have to pay extremely high premiums. Yes, you will pay higher premiums than people who have had car insurance for some time, but that does not mean you can not find affordable car insurance. You ask then how does one find the best and most affordable car insurance? Here is a checklist of ways to find affordable car insurance and the best first insurance for you:
Tips for How to Find the Best Affordable First Insurance
1. Compare first insurance rates online and locally.
2. Know what you need and how much of a first insurance policy so you don't buy more than you want.
3. Tell the car insurance company that you are comparing X amount of companies so they know that you are looking for the best deal.
4. When shopping online or locally for your first insurance policy, make sure you know what car insurance discounts you may be eligible for. If you are unsure, ask the insurance agent of all their discounts.
5. If you are choosing full coverage car insurance, remember the higher your deductible, the cheaper your car insurance premium will be.
How to Purchase Auto Insurance with a Suspended License
It is pretty well known that most states require all drivers to carry some form of financial responsibility to pay for any damages they may cause while driving. A popular form of this financial responsibility is auto insurance, and states have a given minimum requirement of auto insurance for all drivers to carry. This requirement involves the types of coverage that must be purchased, along with the minimal monetary amount that each coverage must have.
Failing to carry auto insurance will result in the notification to your state’s transportation department and penalties will be issued. A state can be notified when a driver isn’t carrying auto insurance, either by an insurance company telling the state a person hasn’t renewed their auto insurance policy or by a traffic officer reporting the absence of proof of insurance when completing a traffic stop. Many officers now request your insurance card in addition to your license and vehicle registration. Penalties for not having auto insurance range from fines and the suspension of your driver’s license and/or vehicle registration to very expensive fines and jail time, all of which depends on how many times you have previously committed this crime.
If you have found yourself in this situation, where your driver’s license has been suspended because of a lack of auto insurance, we can offer some suggestions on what you can do to find a great auto insurance policy as well as reinstate your driver’s license. It may be a question of where to begin or how to approach your situation, but your condition can improve if you work hard and become dedicated to keeping the laws about carrying auto insurance now and through the future.
You will not be able to reinstate your driver’s license until you have proof of auto insurance, so the first step would be to find an insurer who is willing to work with you at this difficult time. You can try to use our auto insurance search by entering in your zip code and honestly answering the remaining questions regarding your driving history and vehicle you drive, but in the end they may not offer you auto insurance over the Internet and will want to speak directly to you to work with you more effectively. If anything, this method of searching for an auto insurance company will at least provide to you a list of local auto insurance companies that you can contact on your own.
Contacting auto insurance companies to get auto insurance when you have a suspended driver’s license needs to be done with a lot of patience on your part. Keep in mind that auto insurance companies provide insurance hoping the driver will not need to make many claims. They base their rates and whether or not they will provide insurance to a particular driver on the driver’s level of risk of making a claim. Being found without auto insurance while involved in getting a traffic ticket or an accident puts you at a higher risk level in the insurer’s point of view, so don’t expect to see any cheap premiums coming your way at first.
When it comes to the price of your premium, allow the auto insurance agent to explain their policies on providing insurance to someone of high risk. They may expect you to pay a high rate for a certain time period, but if you have demonstrated safe driving during that time period by not receiving any traffic tickets or being involved in any accidents while maintaining your auto insurance policy, your rates may begin to decrease. If the insurance agent does not mention this, politely ask if they follow this pattern.
If by chance the first auto insurance company offers to provide insurance to you, perhaps you should opt to tell them you will think about it and call the next auto insurance company to see what they will provide to you. Not all insurance companies offer the exact same price for auto insurance policies, and you could still find something that may be slightly cheaper. Knowing what each auto insurance company is willing to provide for you will help you make a better decision in the long run, as opposed to just picking a random company and going along with what they have to say. Remember to stay patient as you search.
When you have found a policy that suits you best, purchase it and request proof of insurance immediately. Usually the court of law only gives you a small window of time to get auto insurance before they instill another penalty upon you for lack of auto insurance. The quicker you resolve this issue, the better. You can take your proof of insurance card to the courthouse (or other location if it’s recommended) to show the judge, who will then lift the suspension of your driver’s license. If the suspension of your vehicle’s registration was part of your punishment, this will be lifted too. You can then reinstate your license (and registration) by paying a fee, and be prepared for this fee to around $100, if not more.
As you can see, this process is timely and can be stressful with all of the necessary contacting of auto insurance companies, waiting to get auto insurance and the proof that you have it, and then dealing again with the courts and fees it takes to get everything situated to how it needs to be to drive legally. When it is time to renew your auto insurance policy, do not procrastinate or allow the auto insurance company to automatically renew it for you. Do not be late in paying for your premium, whether it is done as monthly payments or at the beginning of the policy in full. If you have difficulties remembering to pay your bills on time, ask the auto insurance company if they have automatic billing programs, where they will bill your bank account directly without any work on your part.
Failing to carry auto insurance will result in the notification to your state’s transportation department and penalties will be issued. A state can be notified when a driver isn’t carrying auto insurance, either by an insurance company telling the state a person hasn’t renewed their auto insurance policy or by a traffic officer reporting the absence of proof of insurance when completing a traffic stop. Many officers now request your insurance card in addition to your license and vehicle registration. Penalties for not having auto insurance range from fines and the suspension of your driver’s license and/or vehicle registration to very expensive fines and jail time, all of which depends on how many times you have previously committed this crime.
If you have found yourself in this situation, where your driver’s license has been suspended because of a lack of auto insurance, we can offer some suggestions on what you can do to find a great auto insurance policy as well as reinstate your driver’s license. It may be a question of where to begin or how to approach your situation, but your condition can improve if you work hard and become dedicated to keeping the laws about carrying auto insurance now and through the future.
You will not be able to reinstate your driver’s license until you have proof of auto insurance, so the first step would be to find an insurer who is willing to work with you at this difficult time. You can try to use our auto insurance search by entering in your zip code and honestly answering the remaining questions regarding your driving history and vehicle you drive, but in the end they may not offer you auto insurance over the Internet and will want to speak directly to you to work with you more effectively. If anything, this method of searching for an auto insurance company will at least provide to you a list of local auto insurance companies that you can contact on your own.
Contacting auto insurance companies to get auto insurance when you have a suspended driver’s license needs to be done with a lot of patience on your part. Keep in mind that auto insurance companies provide insurance hoping the driver will not need to make many claims. They base their rates and whether or not they will provide insurance to a particular driver on the driver’s level of risk of making a claim. Being found without auto insurance while involved in getting a traffic ticket or an accident puts you at a higher risk level in the insurer’s point of view, so don’t expect to see any cheap premiums coming your way at first.
When it comes to the price of your premium, allow the auto insurance agent to explain their policies on providing insurance to someone of high risk. They may expect you to pay a high rate for a certain time period, but if you have demonstrated safe driving during that time period by not receiving any traffic tickets or being involved in any accidents while maintaining your auto insurance policy, your rates may begin to decrease. If the insurance agent does not mention this, politely ask if they follow this pattern.
If by chance the first auto insurance company offers to provide insurance to you, perhaps you should opt to tell them you will think about it and call the next auto insurance company to see what they will provide to you. Not all insurance companies offer the exact same price for auto insurance policies, and you could still find something that may be slightly cheaper. Knowing what each auto insurance company is willing to provide for you will help you make a better decision in the long run, as opposed to just picking a random company and going along with what they have to say. Remember to stay patient as you search.
When you have found a policy that suits you best, purchase it and request proof of insurance immediately. Usually the court of law only gives you a small window of time to get auto insurance before they instill another penalty upon you for lack of auto insurance. The quicker you resolve this issue, the better. You can take your proof of insurance card to the courthouse (or other location if it’s recommended) to show the judge, who will then lift the suspension of your driver’s license. If the suspension of your vehicle’s registration was part of your punishment, this will be lifted too. You can then reinstate your license (and registration) by paying a fee, and be prepared for this fee to around $100, if not more.
As you can see, this process is timely and can be stressful with all of the necessary contacting of auto insurance companies, waiting to get auto insurance and the proof that you have it, and then dealing again with the courts and fees it takes to get everything situated to how it needs to be to drive legally. When it is time to renew your auto insurance policy, do not procrastinate or allow the auto insurance company to automatically renew it for you. Do not be late in paying for your premium, whether it is done as monthly payments or at the beginning of the policy in full. If you have difficulties remembering to pay your bills on time, ask the auto insurance company if they have automatic billing programs, where they will bill your bank account directly without any work on your part.
Do We Need Tort Reform For Auto Safety?
Europe has significant safety features for automobiles that are either standard or optional equipment for their vehicles. These features have not been introduced here in the US. Why?
Could a lack of tort reform be the culprit? It boggles the mind. This was a topic of discussion at an April 21, 2004, meeting of Advocates for Auto and Highway Safety.
What is tort reform and why does it affect car insurance? Tort reform is used by its advocates to describe a change in the United States civil justice system that will limit tort litigation and damages. By doing so, it will reduce litigation’s adverse effects on the economy.
Michael Sanders is the global director for automotive safety for DuPont Performance Materials. Some of the new technologically advanced safety features he told the board about were side curtain airbags, laminated glass, radar-based rear obstacle detection, rear view camera systems, anti-trap technology for windows, an advanced rear seat belt reminder, and pretension seatbelts. Many of these features are standard or optional equipment in Europe. The significance of this is that the market penetration of these features in Europe is deep while they have had relatively no impression here at home.
What is keeping these potentially important safety features out of the grasp of American drivers? You may be surprised to learn that the group believes our litigious society, the contingency fee system, and our court system are reasons such safety equipment is not available in the US and why most of the suppliers are in Europe. What can be done to solve the problem? Unfortunately, it will require more regulation. This seems to be a never-ending spiral of deeper and deeper red tape in order to simplify and safeguard our driving risks. An example of this is to have carefully drawn regulatory standards so that consumers cannot sue auto companies for failure to use such equipment in the past. The group felt that availability of such equipment as standard equipment (OEM) on U.S. cars is probably dependent on tort reform.
We may see a change in this arena.
The U.S. Class Action Fairness Act of 2005 shifts many large class-action lawsuits involving parties from state to federal courts. This may or may not be a good thing. Erasing the needless burden of state litigation with more bureaucratic federal litigation may subvert the constitution’s intent. This Act removes many class action lawsuits from the jurisdiction of state courts. Business groups had lobbied for the legislation, arguing that class-action lawsuits enriched trial lawyers.
The Act accomplished two key goals of tort reform advocates:
1. Reduces the likelihood that out-of-state defendants will be subject to what proponents deem are excessive verdicts, by reducing settlements that may occur in plaintiff-friendly local venues.
2. Enacts procedures for the review of coupon settlements, to reduce attorney's fees that are deemed “excessive” relative to the benefits actually afforded class members.
The Act gives federal courts sole jurisdiction to certain class actions in which the amount in controversy exceeds $5 million, and in which any of the members of a class of plaintiffs is a citizen of a state different from any defendant, unless at least two-thirds or more of the members of all proposed plaintiff classes in the aggregate and the primary defendants are citizens of the state in which the action was originally filed.
Could a lack of tort reform be the culprit? It boggles the mind. This was a topic of discussion at an April 21, 2004, meeting of Advocates for Auto and Highway Safety.
What is tort reform and why does it affect car insurance? Tort reform is used by its advocates to describe a change in the United States civil justice system that will limit tort litigation and damages. By doing so, it will reduce litigation’s adverse effects on the economy.
Michael Sanders is the global director for automotive safety for DuPont Performance Materials. Some of the new technologically advanced safety features he told the board about were side curtain airbags, laminated glass, radar-based rear obstacle detection, rear view camera systems, anti-trap technology for windows, an advanced rear seat belt reminder, and pretension seatbelts. Many of these features are standard or optional equipment in Europe. The significance of this is that the market penetration of these features in Europe is deep while they have had relatively no impression here at home.
What is keeping these potentially important safety features out of the grasp of American drivers? You may be surprised to learn that the group believes our litigious society, the contingency fee system, and our court system are reasons such safety equipment is not available in the US and why most of the suppliers are in Europe. What can be done to solve the problem? Unfortunately, it will require more regulation. This seems to be a never-ending spiral of deeper and deeper red tape in order to simplify and safeguard our driving risks. An example of this is to have carefully drawn regulatory standards so that consumers cannot sue auto companies for failure to use such equipment in the past. The group felt that availability of such equipment as standard equipment (OEM) on U.S. cars is probably dependent on tort reform.
We may see a change in this arena.
The U.S. Class Action Fairness Act of 2005 shifts many large class-action lawsuits involving parties from state to federal courts. This may or may not be a good thing. Erasing the needless burden of state litigation with more bureaucratic federal litigation may subvert the constitution’s intent. This Act removes many class action lawsuits from the jurisdiction of state courts. Business groups had lobbied for the legislation, arguing that class-action lawsuits enriched trial lawyers.
The Act accomplished two key goals of tort reform advocates:
1. Reduces the likelihood that out-of-state defendants will be subject to what proponents deem are excessive verdicts, by reducing settlements that may occur in plaintiff-friendly local venues.
2. Enacts procedures for the review of coupon settlements, to reduce attorney's fees that are deemed “excessive” relative to the benefits actually afforded class members.
The Act gives federal courts sole jurisdiction to certain class actions in which the amount in controversy exceeds $5 million, and in which any of the members of a class of plaintiffs is a citizen of a state different from any defendant, unless at least two-thirds or more of the members of all proposed plaintiff classes in the aggregate and the primary defendants are citizens of the state in which the action was originally filed.
Sunday, May 17, 2009
What Kind of Auto Insurance Do I Need?
auto insurancePerhaps you are the parent or guardian of a new driver looking to purchase auto insurance. Or maybe you are a driver looking to change your auto insurance policy to provide more coverage. Whatever your situation, initially it can be a bit confusing trying to decipher the different parts of auto insurance and what you as the policyholder need to purchase to provide good protection. We offer a few general tips that may guide you towards your decision, possibly helping you see other options that you haven’t before considered.
State Law Requirement
Some new drivers may not realize that almost every state in our country requires — by law — that all drivers obtain and maintain an auto insurance policy. Failure to do so will result in consequences that may include pricy fines. Consequences also include the suspension of the vehicle’s registration and the suspension of the driver’s license, both of which will be reinstated by the owner by paying a hefty reinstatement fee. A repeat offender could find themselves being charged with time in jail simply for not maintaining auto insurance.
Each state specifically requires drivers to carry what’s known as financial responsibility, or the ability to pay for damages that may be caused by the driver. Because the most popular form of financial responsibility is auto insurance, each state has given specific requirements regarding what type of auto insurance coverage should be carried and the minimum dollar amount that should be purchased. Every Department of Transportation or Department of Motor Vehicles will be able to inform drivers of the state’s requirements.
These requirements revolve around bodily injury liability and property damage liability. Bodily injury liability is set on two factors: one, it is a coverage for the other driver and passenger’s bodily injuries as individuals that were sustained when you crashed into them; and two, it is a combined maximum amount for the total cost of bodily injuries. For instance, if an amount of $15,000 was purchased for bodily injury per person, and $30,000 per accident, the insurance company will pay up to $15,000 for the cost of the medical injuries of each person as a result of the accident. The combined cost for all injuries of the driver and passengers in the other vehicle cannot exceed $30,000, as this is the amount purchased.
Property damage liability is just as it sounds; it covers the cost of repairing the property that was damaged in your accident. This property can be another vehicle, a pole, fence, building, the traffic light pole, or any other structure you negligently ran into and subsequently damaged. If an amount of $10,000 was purchased, the insurance company would pay up to $10,000 to restore the damaged property to its original condition.
As with any recommended auto insurance coverage purchased, the insurer will only pay up to the specific amount purchased by the policyholder. Experts agree that many of the minimum requirements are not enough to pay for major accidents where a large amount of damage takes place. Medical bills and property repairs are becoming more expensive, and often the state required amounts do not rise with those costs. Policyholders should compare the minimum purchased amounts with current repair/medical bill costs and evaluate if they are carrying enough.
When the amount of repairs exceeds the amount of insurance, the policyholder is then left wondering how to pay the balance. As an example, a policyholder purchased $5,000 in property damage liability. The policyholder’s 17-year-old son was talking on his cell phone with the radio on and wasn’t paying attention to the child in the parking lot. To avoid a collision with the child, the 17-year-old swerved and ended up through the wall of the store. The total damage of the store was $17,000, which left the policyholder (and the son) financially responsible for $12,000 after the insurance paid for their $5,000.
Experts suggest carrying a policy of 100/300/100, or $100,000 for bodily injury liability per person, $300,000 for bodily injury per accident, and $100,000 for property damage liability, despite what the minimum state requirements are. And no, these coverage options do not apply to your vehicle or medical injuries. Other coverage options are needed for that.
Other Possible State Requirements
Beyond bodily injury and property damage liability coverage, some states also require the purchase of additional auto insurance coverage while other states leave the decision to the driver. Uninsured or underinsured motorist liability protects policyholders (and members of their policy) by agreeing to pay for — up to the purchased amount — any damages that occur to them from drivers with little or no auto insurance. Because those drivers do not have the financial means to pay for their own damages, the policyholder’s insurance can pay for those damages.
Another coverage that may be required by your state is personal injury protection. This coverage works much like a health insurance policy, where the medical bills of you and your passengers will be covered by the auto insurance company, up to the amount purchased. If this coverage is not required in your state, but you regularly drive a carpool, you may want to consider adding this coverage option to your policy as it provides compensation for your passengers.
Again, check with your state transportation or motor vehicle departments to know what coverage you need to have to be considered legal to operate a vehicle.
Drivers with Little to No Health Insurance
Drivers who do not have access to quality health insurance may want to consider personal injury protection (discussed above) or the option known as medical payments. Medical payments also covers the medical expenses of the policyholder and can be used in conjunction with health insurance or on its own.
Other Options
To be able to pay for your own vehicle’s damage you will need to purchase options like collision and comprehensive coverage. If you do not own your vehicle but are making payments, your loan or lease company will probably require you to purchase those options.
Conclusion
Basically, when choosing the type of coverage within an auto insurance policy, be thorough. Think of different situations you or members of your policy may encounter and evaluate the cost that would come from those mistakes. It’s understandably stressful to think of accident conditions, but more stress will come if those accidents happen without having adequate auto insurance.
State Law Requirement
Some new drivers may not realize that almost every state in our country requires — by law — that all drivers obtain and maintain an auto insurance policy. Failure to do so will result in consequences that may include pricy fines. Consequences also include the suspension of the vehicle’s registration and the suspension of the driver’s license, both of which will be reinstated by the owner by paying a hefty reinstatement fee. A repeat offender could find themselves being charged with time in jail simply for not maintaining auto insurance.
Each state specifically requires drivers to carry what’s known as financial responsibility, or the ability to pay for damages that may be caused by the driver. Because the most popular form of financial responsibility is auto insurance, each state has given specific requirements regarding what type of auto insurance coverage should be carried and the minimum dollar amount that should be purchased. Every Department of Transportation or Department of Motor Vehicles will be able to inform drivers of the state’s requirements.
These requirements revolve around bodily injury liability and property damage liability. Bodily injury liability is set on two factors: one, it is a coverage for the other driver and passenger’s bodily injuries as individuals that were sustained when you crashed into them; and two, it is a combined maximum amount for the total cost of bodily injuries. For instance, if an amount of $15,000 was purchased for bodily injury per person, and $30,000 per accident, the insurance company will pay up to $15,000 for the cost of the medical injuries of each person as a result of the accident. The combined cost for all injuries of the driver and passengers in the other vehicle cannot exceed $30,000, as this is the amount purchased.
Property damage liability is just as it sounds; it covers the cost of repairing the property that was damaged in your accident. This property can be another vehicle, a pole, fence, building, the traffic light pole, or any other structure you negligently ran into and subsequently damaged. If an amount of $10,000 was purchased, the insurance company would pay up to $10,000 to restore the damaged property to its original condition.
As with any recommended auto insurance coverage purchased, the insurer will only pay up to the specific amount purchased by the policyholder. Experts agree that many of the minimum requirements are not enough to pay for major accidents where a large amount of damage takes place. Medical bills and property repairs are becoming more expensive, and often the state required amounts do not rise with those costs. Policyholders should compare the minimum purchased amounts with current repair/medical bill costs and evaluate if they are carrying enough.
When the amount of repairs exceeds the amount of insurance, the policyholder is then left wondering how to pay the balance. As an example, a policyholder purchased $5,000 in property damage liability. The policyholder’s 17-year-old son was talking on his cell phone with the radio on and wasn’t paying attention to the child in the parking lot. To avoid a collision with the child, the 17-year-old swerved and ended up through the wall of the store. The total damage of the store was $17,000, which left the policyholder (and the son) financially responsible for $12,000 after the insurance paid for their $5,000.
Experts suggest carrying a policy of 100/300/100, or $100,000 for bodily injury liability per person, $300,000 for bodily injury per accident, and $100,000 for property damage liability, despite what the minimum state requirements are. And no, these coverage options do not apply to your vehicle or medical injuries. Other coverage options are needed for that.
Other Possible State Requirements
Beyond bodily injury and property damage liability coverage, some states also require the purchase of additional auto insurance coverage while other states leave the decision to the driver. Uninsured or underinsured motorist liability protects policyholders (and members of their policy) by agreeing to pay for — up to the purchased amount — any damages that occur to them from drivers with little or no auto insurance. Because those drivers do not have the financial means to pay for their own damages, the policyholder’s insurance can pay for those damages.
Another coverage that may be required by your state is personal injury protection. This coverage works much like a health insurance policy, where the medical bills of you and your passengers will be covered by the auto insurance company, up to the amount purchased. If this coverage is not required in your state, but you regularly drive a carpool, you may want to consider adding this coverage option to your policy as it provides compensation for your passengers.
Again, check with your state transportation or motor vehicle departments to know what coverage you need to have to be considered legal to operate a vehicle.
Drivers with Little to No Health Insurance
Drivers who do not have access to quality health insurance may want to consider personal injury protection (discussed above) or the option known as medical payments. Medical payments also covers the medical expenses of the policyholder and can be used in conjunction with health insurance or on its own.
Other Options
To be able to pay for your own vehicle’s damage you will need to purchase options like collision and comprehensive coverage. If you do not own your vehicle but are making payments, your loan or lease company will probably require you to purchase those options.
Conclusion
Basically, when choosing the type of coverage within an auto insurance policy, be thorough. Think of different situations you or members of your policy may encounter and evaluate the cost that would come from those mistakes. It’s understandably stressful to think of accident conditions, but more stress will come if those accidents happen without having adequate auto insurance.
Simple Steps to Filing Your Car Insurance Claim
Having even a teeny-tiny car accident can be one of life's least enjoyable moments. However, accidents happen, and sooner or later, we all have the experience of meeting one of our fellow road travelers up close and personal. Using the following seven steps to filing your claim will help you get over this speed bump as smoothly as possible.
They aren’t really accidents. They are more of an incident. Usually they are an incident that you would like to forget.
* Understand your policy before a loss, sit down and carefully read your insurance policy. Call your agent or company if you have any questions about what is or is not covered.
* Make sure everyone is okay and check to see if anyone needs medical attention. Even if your injuries are minor, you may still want to have them checked out at a hospital or with your family doctor. Minor injuries can become major, long-lasting injuries.
* Exchange information when you are involved in an accident, get the other driver's name, address, phone number, insurance carrier, and insurer's phone number. Be prepared to give the same information about yourself to the other driver. You can find insurers’ telephone numbers on the proof-of-insurance cards that should be carried on your person when operating a motor vehicle.
* Identify witnesses and ask witnesses to the accident for their names and phone numbers in case their account of the accident is needed.
* File an accident report and contact local law enforcement officers to have an accident report prepared. If law enforcement is not reachable, accident reports and detailed instructions are available at all police departments, sheriff's offices, your local Department of Motor Vehicles office, and on your local Department of Motor Vehicles' web site
* Notify your insurer by contacting your insurance company about the accident as soon as possible. An insurance adjuster will review the accident report to determine who caused the accident. If the accident was not your fault, you can have either your insurance company or the at-fault driver's insurance company handle the repair or replacement of your vehicle. If you use the other driver's company, you will not have a claim on your automobile policy and you will not have to pay a deductible.
* Do not release insurers too early. Do not relieve your insurance company of its responsibility until the damages are settled to your satisfaction. For example, have your insurance company handle the claim if the other party's insurance company questions its policyholder’s negligence or offers an unacceptable settlement.
* Consider these settlement factors.
o Bodily injuries: You may be entitled to a monetary settlement for injuries caused by another at fault (liable) party. It can take several days for some injuries to become apparent.
o Damages: The insurance company is responsible to pay for the reasonable cost of repairs to your vehicle. An insurance adjuster will assess the damage. Usually, insurance companies and auto body shops negotiate disagreements about what should be repaired. If you disagree with their conclusions, you have the right to obtain another appraisal at any auto body shop.
o Appraisal clause: Most auto insurance policies include an appraisal clause, which can be used to help settle disputes about physical damage claims between you and your insurance company. (The appraisal clause does not apply for claims you file with the other party's insurance company.) If you cannot reach an agreement with your company, you or your insurer can initiate the appraisal clause. Your appraiser and your insurer's appraiser then select an independent umpire to try to resolve the dispute. Check your policy or ask your agent or insurance company for more information about the appraisal clause.
And that is it. While filing a claim is certainly no fun, following these seven steps will make the process almost as easy as getting free quotes and purchasing your car insurance at CarInsurance.com.
They aren’t really accidents. They are more of an incident. Usually they are an incident that you would like to forget.
* Understand your policy before a loss, sit down and carefully read your insurance policy. Call your agent or company if you have any questions about what is or is not covered.
* Make sure everyone is okay and check to see if anyone needs medical attention. Even if your injuries are minor, you may still want to have them checked out at a hospital or with your family doctor. Minor injuries can become major, long-lasting injuries.
* Exchange information when you are involved in an accident, get the other driver's name, address, phone number, insurance carrier, and insurer's phone number. Be prepared to give the same information about yourself to the other driver. You can find insurers’ telephone numbers on the proof-of-insurance cards that should be carried on your person when operating a motor vehicle.
* Identify witnesses and ask witnesses to the accident for their names and phone numbers in case their account of the accident is needed.
* File an accident report and contact local law enforcement officers to have an accident report prepared. If law enforcement is not reachable, accident reports and detailed instructions are available at all police departments, sheriff's offices, your local Department of Motor Vehicles office, and on your local Department of Motor Vehicles' web site
* Notify your insurer by contacting your insurance company about the accident as soon as possible. An insurance adjuster will review the accident report to determine who caused the accident. If the accident was not your fault, you can have either your insurance company or the at-fault driver's insurance company handle the repair or replacement of your vehicle. If you use the other driver's company, you will not have a claim on your automobile policy and you will not have to pay a deductible.
* Do not release insurers too early. Do not relieve your insurance company of its responsibility until the damages are settled to your satisfaction. For example, have your insurance company handle the claim if the other party's insurance company questions its policyholder’s negligence or offers an unacceptable settlement.
* Consider these settlement factors.
o Bodily injuries: You may be entitled to a monetary settlement for injuries caused by another at fault (liable) party. It can take several days for some injuries to become apparent.
o Damages: The insurance company is responsible to pay for the reasonable cost of repairs to your vehicle. An insurance adjuster will assess the damage. Usually, insurance companies and auto body shops negotiate disagreements about what should be repaired. If you disagree with their conclusions, you have the right to obtain another appraisal at any auto body shop.
o Appraisal clause: Most auto insurance policies include an appraisal clause, which can be used to help settle disputes about physical damage claims between you and your insurance company. (The appraisal clause does not apply for claims you file with the other party's insurance company.) If you cannot reach an agreement with your company, you or your insurer can initiate the appraisal clause. Your appraiser and your insurer's appraiser then select an independent umpire to try to resolve the dispute. Check your policy or ask your agent or insurance company for more information about the appraisal clause.
And that is it. While filing a claim is certainly no fun, following these seven steps will make the process almost as easy as getting free quotes and purchasing your car insurance at CarInsurance.com.
Thursday, May 14, 2009
Car Insurance Rates Are Dropping
According to a new survey by Insurance.com, 44% of shoppers believed they were overpaying for car insurance. In addition, 22% said that they were shopping because their rates had recently increased with the renewal bill from their current auto insurance company.
Are you getting a good deal? March RateWatch data shows that drivers who pay too much for car insurance now have a great chance to save. "Consumers who shopped for car insurance recently saw rates that were $100 lower on average than rates quoted last fall," said Sam Belden, Vice President at Insurance.com. "Most policies renew every six months, so this decline in average quotes comes as good news for consumers whose policies were affected by rising prices in late 2008."
Insurance.com's survey also found that 32% of drivers were driving less compared to six months ago. Driving fewer miles presents another savings opportunity, because it could earn drivers a 5–15% Low Mileage discount on their auto insurance policy with most insurance companies.
Consumers are making tough decisions about how much coverage they buy, while still trying to maintain their policies. 25% of car insurance shoppers surveyed bought less auto insurance coverage than they had on a prior policy, and 26% dropped comprehensive and collision coverage. While less coverage always beats no insurance, we'd like to remind you that auto insurance provides important protection. Consider these tips:
Are you getting a good deal? March RateWatch data shows that drivers who pay too much for car insurance now have a great chance to save. "Consumers who shopped for car insurance recently saw rates that were $100 lower on average than rates quoted last fall," said Sam Belden, Vice President at Insurance.com. "Most policies renew every six months, so this decline in average quotes comes as good news for consumers whose policies were affected by rising prices in late 2008."
Insurance.com's survey also found that 32% of drivers were driving less compared to six months ago. Driving fewer miles presents another savings opportunity, because it could earn drivers a 5–15% Low Mileage discount on their auto insurance policy with most insurance companies.
Consumers are making tough decisions about how much coverage they buy, while still trying to maintain their policies. 25% of car insurance shoppers surveyed bought less auto insurance coverage than they had on a prior policy, and 26% dropped comprehensive and collision coverage. While less coverage always beats no insurance, we'd like to remind you that auto insurance provides important protection. Consider these tips:
Essential Tips and Auto Insurance Policy Basics
Finding the best auto insurance company that will provide the amount of coverage that you need at the price you can afford is just the first step. This can be easily done online with an electronic application and most companies give you the opportunity to print the proof of insurance immediately.
With the technology of today, you now have the ability to search, find and purchase auto insurance online with just a few clicks. When you have finished the process of obtaining a paperless purchase online, you will be sent the full paper policy to review. The policy basically tells the vital information and details of your new coverage.
Understanding an auto insurance policy is not as difficult as some people may think. Basically, it gives all of the pertinent information that relates to the insurance coverage and what it all means. It can be a bit confusing at first, but once you can comprehend it all, it really isn’t as hard as you think. An explanation is given below to give you additional information for reviewing your auto insurance policy.
Things on an Auto Insurance Policy Declaration Page
While there are many kinds of coverage and auto insurance options, every declaration page will look different. As soon as you receive your auto insurance declarations page, which should be issued upon inception, it will be a good idea to check over all of the listed values and information. If you have any questions concerning the policy, the insurance company would be able to help answer them for you.
Sometimes called a “Dec” page, the auto insurance policy declaration page is simply an itemized description that tells about your vehicles and the coverage that you have purchased. This page will list your name and address, the name of your insurer, policy number and effective dates of the policy. Also shown would be a description and coverage of included vehicles, premium for the coverage, loss payee or lien holder and any special conditions on the coverage which would be listed as an endorsement. The loss payee will be anyone that has a lien on your vehicle; such as if you have an auto loan on it and in that case the financial institution will have to be listed.
One thing that is often confused concerning the declaration page of your insurance policy is that when liability medical coverage is listed it is wrongly interpreted as covering their medical costs. This gives a false security because in actuality, unless there is medical injury protection listed, the coverage does not include any type of coverage for your injuries or damages. It only pertains to injuries to others that may have been involved in an automobile mishap. This is a very important to check on your policy and you should ask about it if it is not there.
Adding Vehicles and Drivers to Your Auto Insurance Policy
It is usually advantageous to add a driver to an auto insurance policy because of additional discounts that you will receive and the ability to drive any of the other vehicles in the home. Multiple drivers and vehicles can easily be included on one policy when you purchase online or in person. Each insurer will have its own set of rules, so it will be best to check with your carrier on the procedures. The biggest obstacle that you might have to face is that all of the vehicles will be on one policy with one set due date for the premium to be paid. It will require every driver to pay their portion of the payment at the same time as others and paydays may be different for each person. This may create an issue that could put you at risk of losing your auto insurance coverage, if the monthly premium is not paid on time.
Some parents may wonder if they should add their children to their existing auto insurance policy and there is not a definitive answer to that question. Each individual and circumstances will vary, so you will need to assess the options by possibly getting an online auto insurance quote for the separate policy for your child. Then check into the price increase that adding them to your current policy will create and then you can compare the two choices in order to decide.
There are a couple of things to keep in mind, however, when adding a child to your existing auto insurance policy or obtaining a separate policy of their own. If you choose to add the new driver to your current insurance policy, the rates for all of the insured vehicles may increase and it may drive the premium to an unaffordable level. The child will be insured while driving all of the vehicles in the household, so if they plan on driving your car, this is the way to go. If your current premium goes up drastically, get a quote from another carrier and compare the difference before making a decision. On the other hand, if you decide to go ahead and purchase a separate insurance policy for your child, he will not be insured while driving any of the other vehicles that are on your current policy.
Cancelling an Auto Insurance Policy
Many drivers think that they are obligated to hold their auto insurance policy throughout the coverage period, but it simply isn’t true. Through your search and comparison of other companies, if you happen to find another auto insurance carrier that you have decided to purchase, you will need to cancel your current policy. There could be cancellation fees involved, but they are normally billed later and are of a nominal amount. Insurance companies are not permitted to charge money for any unearned premiums, so when you cancel the coverage you will not owe for any upcoming periods. The fact of the matter is that most insurance premiums are charged for future months in which you will no longer have their coverage, so in that case, the insurance company will refund the prepaid money to you. Every insurer will have their own rules for cancellations, so it might be best to simply give them a call to find out about their guidelines for cancelling.
With the technology of today, you now have the ability to search, find and purchase auto insurance online with just a few clicks. When you have finished the process of obtaining a paperless purchase online, you will be sent the full paper policy to review. The policy basically tells the vital information and details of your new coverage.
Understanding an auto insurance policy is not as difficult as some people may think. Basically, it gives all of the pertinent information that relates to the insurance coverage and what it all means. It can be a bit confusing at first, but once you can comprehend it all, it really isn’t as hard as you think. An explanation is given below to give you additional information for reviewing your auto insurance policy.
Things on an Auto Insurance Policy Declaration Page
While there are many kinds of coverage and auto insurance options, every declaration page will look different. As soon as you receive your auto insurance declarations page, which should be issued upon inception, it will be a good idea to check over all of the listed values and information. If you have any questions concerning the policy, the insurance company would be able to help answer them for you.
Sometimes called a “Dec” page, the auto insurance policy declaration page is simply an itemized description that tells about your vehicles and the coverage that you have purchased. This page will list your name and address, the name of your insurer, policy number and effective dates of the policy. Also shown would be a description and coverage of included vehicles, premium for the coverage, loss payee or lien holder and any special conditions on the coverage which would be listed as an endorsement. The loss payee will be anyone that has a lien on your vehicle; such as if you have an auto loan on it and in that case the financial institution will have to be listed.
One thing that is often confused concerning the declaration page of your insurance policy is that when liability medical coverage is listed it is wrongly interpreted as covering their medical costs. This gives a false security because in actuality, unless there is medical injury protection listed, the coverage does not include any type of coverage for your injuries or damages. It only pertains to injuries to others that may have been involved in an automobile mishap. This is a very important to check on your policy and you should ask about it if it is not there.
Adding Vehicles and Drivers to Your Auto Insurance Policy
It is usually advantageous to add a driver to an auto insurance policy because of additional discounts that you will receive and the ability to drive any of the other vehicles in the home. Multiple drivers and vehicles can easily be included on one policy when you purchase online or in person. Each insurer will have its own set of rules, so it will be best to check with your carrier on the procedures. The biggest obstacle that you might have to face is that all of the vehicles will be on one policy with one set due date for the premium to be paid. It will require every driver to pay their portion of the payment at the same time as others and paydays may be different for each person. This may create an issue that could put you at risk of losing your auto insurance coverage, if the monthly premium is not paid on time.
Some parents may wonder if they should add their children to their existing auto insurance policy and there is not a definitive answer to that question. Each individual and circumstances will vary, so you will need to assess the options by possibly getting an online auto insurance quote for the separate policy for your child. Then check into the price increase that adding them to your current policy will create and then you can compare the two choices in order to decide.
There are a couple of things to keep in mind, however, when adding a child to your existing auto insurance policy or obtaining a separate policy of their own. If you choose to add the new driver to your current insurance policy, the rates for all of the insured vehicles may increase and it may drive the premium to an unaffordable level. The child will be insured while driving all of the vehicles in the household, so if they plan on driving your car, this is the way to go. If your current premium goes up drastically, get a quote from another carrier and compare the difference before making a decision. On the other hand, if you decide to go ahead and purchase a separate insurance policy for your child, he will not be insured while driving any of the other vehicles that are on your current policy.
Cancelling an Auto Insurance Policy
Many drivers think that they are obligated to hold their auto insurance policy throughout the coverage period, but it simply isn’t true. Through your search and comparison of other companies, if you happen to find another auto insurance carrier that you have decided to purchase, you will need to cancel your current policy. There could be cancellation fees involved, but they are normally billed later and are of a nominal amount. Insurance companies are not permitted to charge money for any unearned premiums, so when you cancel the coverage you will not owe for any upcoming periods. The fact of the matter is that most insurance premiums are charged for future months in which you will no longer have their coverage, so in that case, the insurance company will refund the prepaid money to you. Every insurer will have their own rules for cancellations, so it might be best to simply give them a call to find out about their guidelines for cancelling.
Factors That Affect Your Car Insurance Premium
Many factors affect the premium you will pay for auto insurance. Each is a statistically based risk for a specific population. The higher the risk associated with a person, the more he or she is likely to pay for coverage. We have elaborated on some of the risk factors below, but there are numerous others, including driver's gender, miles driven per year, purpose for using the vehicle (commuting to work, using for work, leisure only), etc.
Related Car Insurance Articles
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* Age
Statistically, drivers under the age of 25 are at greater risk of being in an accident than those over age 25. Drivers between the ages of 50 and 65 generally have the safest records.
* Gender
Women are statistically safer drivers, but that trend is changing as more female drivers get on the road.
* Marital Status
A married person will pay less than a single person with an identical driving record.
You can think about these factors and determine what you can do to change them in your situation. You may be able to save on insurance based upon these decisions:
* Geography
Where you live makes a difference. Folks living in areas with little or no traffic are likely to spend less on insurance than those living in congested cities or suburbs because areas with a lot of traffic tend to see more accidents. Some neighborhoods also have a higher rate of vehicle thefts, which can result in a higher premium.
* Driving Violations
Having an accident or moving violations on your record (speeding tickets, DWI, reckless driving, etc.) put you at a higher risk for accidents and will likely mean a higher premium. Some insurance companies will penalize you for your record for as many as five years from when the incident occurred. However, keep in mind, as your record improves, your premium will get lower.
* Vehicle Type
A cheap car will cost less to insure than that status symbol SUV sitting on 24" rims.
* Accident Claims
A driving record that is clean and free of accidents will hold far better for you than lots of tickets and/or accidents.
* Credit Rating
Many insurance companies view having a poor, or even no credit history as suggestive of higher risk and thus, charge you a higher premium. Monitor your credit rating free to see if you can get a better score. A better credit score will save on insurance premiums.
* Occupation
Insurers have statistically found a correlation between your occupation and risk. For instance, a newspaper delivery person is most likely a higher risk than the personal banker sitting at their desk all day.
* Education
A higher education can save on your premiums.
* Driving distance to work
* Miles driven each year
* Years of driving experience
* Business use of the vehicle
* Whether or not you currently have auto insurance and how high are your limits
* Theft protection devices (often results in discounts)
* Multiple cars and drivers (another opportunity for discounts)
Related Car Insurance Articles
* Which Cars Keep Your Insurance Rates Affordable
* Understanding How Your Credit History May Affect Your Car Insurance Coverage
* Car Insurance Discounts
* Choosing Higher Deductibles On Your Car Coverage
* Do Insurance Premiums Increase Every Year?
* Eight Easy Ways In Which To Cut Costs On Your Auto Insurance
* Insurance Tips: How to Save When Buying Car Insurance
* Auto Insurance for Young Drivers
* Consequences of Late Insurance Payments
* How Much Can My Auto Rate Increase After One Accident?
* Customizing Your Vehicle and Car Insurance
* What a Traffic Ticket can Truly Cost You
* Optional Auto Insurance Coverages in Florida
* Shop for Car Insurance Around Town or From Your House
* Auto Insurance Discounts To Ask About
* Ways in Which to Lower Your Car Insurance Rates
* Auto Insurance Rating Factors
* How Claims Affect Insurance Premiums
* Age
Statistically, drivers under the age of 25 are at greater risk of being in an accident than those over age 25. Drivers between the ages of 50 and 65 generally have the safest records.
* Gender
Women are statistically safer drivers, but that trend is changing as more female drivers get on the road.
* Marital Status
A married person will pay less than a single person with an identical driving record.
You can think about these factors and determine what you can do to change them in your situation. You may be able to save on insurance based upon these decisions:
* Geography
Where you live makes a difference. Folks living in areas with little or no traffic are likely to spend less on insurance than those living in congested cities or suburbs because areas with a lot of traffic tend to see more accidents. Some neighborhoods also have a higher rate of vehicle thefts, which can result in a higher premium.
* Driving Violations
Having an accident or moving violations on your record (speeding tickets, DWI, reckless driving, etc.) put you at a higher risk for accidents and will likely mean a higher premium. Some insurance companies will penalize you for your record for as many as five years from when the incident occurred. However, keep in mind, as your record improves, your premium will get lower.
* Vehicle Type
A cheap car will cost less to insure than that status symbol SUV sitting on 24" rims.
* Accident Claims
A driving record that is clean and free of accidents will hold far better for you than lots of tickets and/or accidents.
* Credit Rating
Many insurance companies view having a poor, or even no credit history as suggestive of higher risk and thus, charge you a higher premium. Monitor your credit rating free to see if you can get a better score. A better credit score will save on insurance premiums.
* Occupation
Insurers have statistically found a correlation between your occupation and risk. For instance, a newspaper delivery person is most likely a higher risk than the personal banker sitting at their desk all day.
* Education
A higher education can save on your premiums.
* Driving distance to work
* Miles driven each year
* Years of driving experience
* Business use of the vehicle
* Whether or not you currently have auto insurance and how high are your limits
* Theft protection devices (often results in discounts)
* Multiple cars and drivers (another opportunity for discounts)
Wednesday, May 13, 2009
Boat Insurance: What Is It?
If you own a boat, you probably think about skimming across the waves or spending long afternoons out on the water. Boat insurance is probably the furthest thing from your mind. But boats need insurance, too. Just like cars and homes, boats can be damaged or cause injury or damage to people or property.
Many states require a minimum amount of liability insurance on your boat. And if you have a boat loan, your lender probably requires you to carry insurance for the boat itself. Additionally, many marinas and yacht clubs won't allow you to dock your boat unless you're insured. Whether required or not, it's a good idea to protect your investment.
Doesn't my home insurance cover boats?
Homeowners insurance usually includes limited coverage, such as $1,000 for damage to your boat while stored at your home. Home insurance may also provide a small amount of personal liability coverage to protect against claims from accidents you cause with your boat. Jet skis and other personal watercraft are typically excluded from homeowners insurance coverage.
What boats can I insure?
Most typical insurance companies insure most types of boats. These include small fishing boats, speedboats, sailboats, canoes and houseboats. You'll probably need to search for a company specializing in boat insurance if you have an unusual boat, such as:
* Houseboats used as a main residence.
* Amphibious or exotic boats.
* Boats with excessive horsepower or capable of speeds over 75 mph.
* Boats used for business or commercial purposes.
* Boats traveling beyond 75-125 nautical miles from shore.
* Personal watercraft (e.g., jet skis).
What does boat insurance cover?
Boat insurance policies often resemble auto insurance policies. Just like car insurance, policies vary between companies, but the main types of coverage are bodily injury/property damage liability coverage and physical damage coverage. Other optional coverages often include medical payments coverage and uninsured/underinsured boater coverage.
* Property Damage liability – can pay for expenses resulting from property damaged in an accident you cause, like replacing or repairing a boat, a dock or other structure, as well as defense costs.
* Bodily Injury liability – can pay for expenses related to injury to others in an accident you cause. These expenses could include medical bills, lost wages, and pain and suffering, plus defense costs.
* Uninsured/underinsured boaters coverage – similar to Uninsured/underinsured motorist (UM/UIM) coverage. It can pay for things like bodily injury, lost wages, and pain and suffering for you, your passengers and your family members in an accident caused by a boater with no insurance or insufficient insurance. With the economy still souring, it's likely that people are dropping boat insurance as well, so this coverage is essential.
* Medical Payments coverage – can pay for a smaller amount of medical or funeral expenses for you, your passengers and others on your policy. Water sports coverage extends this protection to waterskiing and similar activities outside of the boat.
* Physical Damage coverage – protects your boat itself – and its towing trailer, if you want. The options for this coverage, from highest cost to lowest, are total replacement, agreed value, and actual cash value.
o Total replacement will replace your boat with a new boat of the same type and is usually only available for boats less than two years old.
o Agreed value will pay the amount listed on your policy, but is lower than the replacement cost of the boat.
o Actual cash value pays you the market value of the boat.
* These options all have deductibles.
Special boat insurance coverages
Because boats live on the water and have special needs, there are some specialized coverages you can add.
* Fishing equipment coverage – covers fishing supplies on the boat or while being transferred on or off the boat.
* Personal property coverage – covers personal effects on the boat or while being transferred on or off the boat.
* Roadside assistance – covers the boat during towing, and sometimes even the tow vehicle.
* Fuel spill/accident cleanup – covers removal of debris from an accident.
Discounts
Many boat insurance discounts are similar to auto insurance discounts. Here are some specific to boats:
* Fire suppression system discount – fires on the water can quickly destroy a boat, so these systems can be lifesavers.
* Diesel fuel discount – diesel isn't as flammable as gasoline, so it's safer.
* Safety device discount – depth-finders and other safety devices make boating less risky.
Boat insurance may not be required, but it's always a good idea. If you're lucky enough to have a boat, protecting it and your assets with boat insurance is a smart choice.
Many states require a minimum amount of liability insurance on your boat. And if you have a boat loan, your lender probably requires you to carry insurance for the boat itself. Additionally, many marinas and yacht clubs won't allow you to dock your boat unless you're insured. Whether required or not, it's a good idea to protect your investment.
Doesn't my home insurance cover boats?
Homeowners insurance usually includes limited coverage, such as $1,000 for damage to your boat while stored at your home. Home insurance may also provide a small amount of personal liability coverage to protect against claims from accidents you cause with your boat. Jet skis and other personal watercraft are typically excluded from homeowners insurance coverage.
What boats can I insure?
Most typical insurance companies insure most types of boats. These include small fishing boats, speedboats, sailboats, canoes and houseboats. You'll probably need to search for a company specializing in boat insurance if you have an unusual boat, such as:
* Houseboats used as a main residence.
* Amphibious or exotic boats.
* Boats with excessive horsepower or capable of speeds over 75 mph.
* Boats used for business or commercial purposes.
* Boats traveling beyond 75-125 nautical miles from shore.
* Personal watercraft (e.g., jet skis).
What does boat insurance cover?
Boat insurance policies often resemble auto insurance policies. Just like car insurance, policies vary between companies, but the main types of coverage are bodily injury/property damage liability coverage and physical damage coverage. Other optional coverages often include medical payments coverage and uninsured/underinsured boater coverage.
* Property Damage liability – can pay for expenses resulting from property damaged in an accident you cause, like replacing or repairing a boat, a dock or other structure, as well as defense costs.
* Bodily Injury liability – can pay for expenses related to injury to others in an accident you cause. These expenses could include medical bills, lost wages, and pain and suffering, plus defense costs.
* Uninsured/underinsured boaters coverage – similar to Uninsured/underinsured motorist (UM/UIM) coverage. It can pay for things like bodily injury, lost wages, and pain and suffering for you, your passengers and your family members in an accident caused by a boater with no insurance or insufficient insurance. With the economy still souring, it's likely that people are dropping boat insurance as well, so this coverage is essential.
* Medical Payments coverage – can pay for a smaller amount of medical or funeral expenses for you, your passengers and others on your policy. Water sports coverage extends this protection to waterskiing and similar activities outside of the boat.
* Physical Damage coverage – protects your boat itself – and its towing trailer, if you want. The options for this coverage, from highest cost to lowest, are total replacement, agreed value, and actual cash value.
o Total replacement will replace your boat with a new boat of the same type and is usually only available for boats less than two years old.
o Agreed value will pay the amount listed on your policy, but is lower than the replacement cost of the boat.
o Actual cash value pays you the market value of the boat.
* These options all have deductibles.
Special boat insurance coverages
Because boats live on the water and have special needs, there are some specialized coverages you can add.
* Fishing equipment coverage – covers fishing supplies on the boat or while being transferred on or off the boat.
* Personal property coverage – covers personal effects on the boat or while being transferred on or off the boat.
* Roadside assistance – covers the boat during towing, and sometimes even the tow vehicle.
* Fuel spill/accident cleanup – covers removal of debris from an accident.
Discounts
Many boat insurance discounts are similar to auto insurance discounts. Here are some specific to boats:
* Fire suppression system discount – fires on the water can quickly destroy a boat, so these systems can be lifesavers.
* Diesel fuel discount – diesel isn't as flammable as gasoline, so it's safer.
* Safety device discount – depth-finders and other safety devices make boating less risky.
Boat insurance may not be required, but it's always a good idea. If you're lucky enough to have a boat, protecting it and your assets with boat insurance is a smart choice.
5 Steps to Filing Your Auto Insurance Claim
1. Evaluate whether or not you should file a claim: Did you know that just when you call your insurance company with a question about possibly filing a claim it is often recorded on your insurance record? It is important to keep your insurance record clean and one way is deciding whether or not you should file a claim. It doesn’t matter if the accident is your fault or not, you should ask yourself first if you can pay for the damage. Simply put, if you can pay for it yourself without financial hardship, don’t file the claim.
2. Fill out your What to do After an Auto Accident Worksheet: This worksheet, which when you click on the title is provided for print-out, will help you keep track of the information you will need to file your auto insurance claim. It is important to get every detail of the accident documented and to try to find witnesses that would be willing to talk to your insurance company to back-up your story.
3. File the claim ASAP: You will want to file the claim as soon as possible with your insurance company. Even if it is not your fault, your insurance company will handle the claim process as your advocate.
4. Prepare for a possible call from the other insurance company: If there is a dispute between the two parties in the accident, you may get a call from the other driver’s insurance company asking for your version of what happened at the accident scene. If this happens make sure you document everything you say and the name of the customer service agent you talked too.
5. Finally, getting your car fixed: If you had body damage to your vehicle this is when you will finally get it fixed. After your claim is approved, you will likely get a call from your insurance company about sending an insurance adjuster out to assess the damage or asking you to send your car to a pre-approved shop to get it
2. Fill out your What to do After an Auto Accident Worksheet: This worksheet, which when you click on the title is provided for print-out, will help you keep track of the information you will need to file your auto insurance claim. It is important to get every detail of the accident documented and to try to find witnesses that would be willing to talk to your insurance company to back-up your story.
3. File the claim ASAP: You will want to file the claim as soon as possible with your insurance company. Even if it is not your fault, your insurance company will handle the claim process as your advocate.
4. Prepare for a possible call from the other insurance company: If there is a dispute between the two parties in the accident, you may get a call from the other driver’s insurance company asking for your version of what happened at the accident scene. If this happens make sure you document everything you say and the name of the customer service agent you talked too.
5. Finally, getting your car fixed: If you had body damage to your vehicle this is when you will finally get it fixed. After your claim is approved, you will likely get a call from your insurance company about sending an insurance adjuster out to assess the damage or asking you to send your car to a pre-approved shop to get it
Will Your Auto Insurance Weather The Storm?
(NAPSI)-Severe storms can cause enormous property damage to your home. They can also do the same thing to your car. With storms getting worse, what can you do? Take a look at your insurance policy. "Too often, people don't notice they lack certain types of coverage until they try to make a claim," says Ron Berry, seniSevere storms can cause enormous property damage to your home. They can also do the same thing to your car. With storms getting or vice president of the Council of Better Business Bureaus.
In fact, the number of reported claims for vehicle losses due to severe storms nearly doubled in the first five years of this century, according to ISO's Property Claim Services (PCS) unit, the recognized authority on insured property losses from catastrophes in the United States.
Fortunately, the Insurance Information Institute (I.I.I.), a nonprofit organization, says comprehensive coverage will reimburse you for loss due to fire, falling objects, storms, vandalism, animals and floods.
Comprehensive insurance usually has a $100 to $300 deductible, though you may want a higher one to lower your premium. Comprehensive insurance will reimburse you if your windshield is cracked or shattered.
"But, even if you have comprehensive coverage, it is not always guaranteed to meet your individual needs," says Carolyn Gorman, vice president of the I.I.I. "For example, you may be surprised to discover that after a storm your auto insurance does not automatically cover the cost of a replacement rental car while your car is in the repair shop or you wait for authorization for a new car."
She added that an individual could pay as much as $1,000 to rent a replacement car. "Rental reimbursement coverage, which is only a couple of dollars a month, covers the cost of a rental car while your car is being repaired or you are waiting for authorization for a new car. Renting a car for one day can cost more than one full year's coverage for rental reimbursement," Gorman said.
If your car is ever damaged in a storm:
• Know what your insurance covers. Don't wait to find out it doesn't include comprehensive or won't cover emergency roadside assistance or a rental car.
• Report damage as soon as possible. If your car is not drivable, your agent or claims center may be able to save you time and money by having it towed directly to the repair facility and providing you with a replacement rental car.
• Know your deductible and any other additional charges before authorizing work. Expect your insurance adjuster, claims representative or repair facility appraiser to review the damage with you and explain the process, including the use of original or generic auto parts.
In fact, the number of reported claims for vehicle losses due to severe storms nearly doubled in the first five years of this century, according to ISO's Property Claim Services (PCS) unit, the recognized authority on insured property losses from catastrophes in the United States.
Fortunately, the Insurance Information Institute (I.I.I.), a nonprofit organization, says comprehensive coverage will reimburse you for loss due to fire, falling objects, storms, vandalism, animals and floods.
Comprehensive insurance usually has a $100 to $300 deductible, though you may want a higher one to lower your premium. Comprehensive insurance will reimburse you if your windshield is cracked or shattered.
"But, even if you have comprehensive coverage, it is not always guaranteed to meet your individual needs," says Carolyn Gorman, vice president of the I.I.I. "For example, you may be surprised to discover that after a storm your auto insurance does not automatically cover the cost of a replacement rental car while your car is in the repair shop or you wait for authorization for a new car."
She added that an individual could pay as much as $1,000 to rent a replacement car. "Rental reimbursement coverage, which is only a couple of dollars a month, covers the cost of a rental car while your car is being repaired or you are waiting for authorization for a new car. Renting a car for one day can cost more than one full year's coverage for rental reimbursement," Gorman said.
If your car is ever damaged in a storm:
• Know what your insurance covers. Don't wait to find out it doesn't include comprehensive or won't cover emergency roadside assistance or a rental car.
• Report damage as soon as possible. If your car is not drivable, your agent or claims center may be able to save you time and money by having it towed directly to the repair facility and providing you with a replacement rental car.
• Know your deductible and any other additional charges before authorizing work. Expect your insurance adjuster, claims representative or repair facility appraiser to review the damage with you and explain the process, including the use of original or generic auto parts.
Understanding the Different Types of Auto Insurance Coverage
types of auto insurance coveragesThe need for sufficient auto insurance coverage goes beyond complying with the state insurance laws; it is one of the most important types of protection that you can obtain. Covering the costs of damage to your vehicle, as well as the other vehicle that may be involved creates the best reason to obtain an auto insurance policy. Some states have placed laws that will not even allow you to register a vehicle with the Bureau of Motor Vehicles without proof of insurance, so if you do not have a policy in which to provide the proof, you will be operating the vehicle illegally.
Why Auto Insurance is Important
Besides the fact that it is a law, it is very crucial to have auto insurance to cover your property and assets in case of accidental damage. Injuries to others, as well as your own injuries will be protected by auto insurance if you are in an accident and have these medical costs to cover. Sometimes, a medical coverage or employer provided health insurance will not be enough and may have automobile related exclusions attached. When you purchase auto insurance there is normally a small allowance for health and medical costs and can be increased, if so desired. If you are found to be liable for another person’s injuries, it is wise to ensure that you are completely covered with liability coverage.
Bodily injuries that may be caused by a driver that is uninsured or underinsured, as well as possible property damage should be taken into consideration to protect you from having pay out of pocket expenses. If you happen to be involved in an auto accident with an uninsured driver, you could be left with enormous property damage costs to repair and possibly medical costs also. Uninsured motorist auto insurance is advantageous for unexpected injuries and damage and is an optional addition to an auto insurance policy that is highly recommended.
Other important reasons to purchase auto insurance would be to protect against accidental damage to property resulting from vandalism, theft, fire or environmental hazards like wind storm or hail. Also, if you are ever in an accident that deems your vehicle inoperable, having additional rental car coverage would offset the expenses that would be required to rent a back up vehicle. These are a few of the reasons that having a good auto insurance coverage is important and there are numerous places on the internet that you can investigate insurance options, along with obtaining a free quote.
Why Auto Insurance is Important
Besides the fact that it is a law, it is very crucial to have auto insurance to cover your property and assets in case of accidental damage. Injuries to others, as well as your own injuries will be protected by auto insurance if you are in an accident and have these medical costs to cover. Sometimes, a medical coverage or employer provided health insurance will not be enough and may have automobile related exclusions attached. When you purchase auto insurance there is normally a small allowance for health and medical costs and can be increased, if so desired. If you are found to be liable for another person’s injuries, it is wise to ensure that you are completely covered with liability coverage.
Bodily injuries that may be caused by a driver that is uninsured or underinsured, as well as possible property damage should be taken into consideration to protect you from having pay out of pocket expenses. If you happen to be involved in an auto accident with an uninsured driver, you could be left with enormous property damage costs to repair and possibly medical costs also. Uninsured motorist auto insurance is advantageous for unexpected injuries and damage and is an optional addition to an auto insurance policy that is highly recommended.
Other important reasons to purchase auto insurance would be to protect against accidental damage to property resulting from vandalism, theft, fire or environmental hazards like wind storm or hail. Also, if you are ever in an accident that deems your vehicle inoperable, having additional rental car coverage would offset the expenses that would be required to rent a back up vehicle. These are a few of the reasons that having a good auto insurance coverage is important and there are numerous places on the internet that you can investigate insurance options, along with obtaining a free quote.
Should I Buy Rental Car Insurance?
Rental car agencies have a menu of insurance policies they would like to sell you. While each policy could be of some benefit under the right circumstances, you should review each plan (its provisions, limitations, and exclusions) before making a purchase. It is a good idea to request the detailed information from an agent at the rental office, as most companies only provide a summary on their Web sites.
Related Car Insurance Articles
* How Much Car Insurance Should You Buy?
* Which Cars Keep Your Insurance Rates Affordable
* Eight Easy Ways In Which To Cut Costs On Your Auto Insurance
* Purchasing a Road Hazard Warranty
* Types of Auto Insurance Coverage Explained
* The Many Benefits of Travel Protection Plans
* Auto Insurance Basics
* Shopping Options for Auto Insurance
* Tips for First Time Insurance Buyers
* The Benefits of Being in an Automotive Club
* Optional Auto Insurance Coverages in Florida
* Auto Insurance Discounts To Ask About
* Ways in Which to Lower Your Car Insurance Rates
* Auto Insurance Rating Factors
* Florida No-Fault Insurance
* The Basics of a Personal Liability Umbrella Policy
* How Claims Affect Insurance Premiums
* What does liability insurance protect?
Keep in mind; you may not need to buy this additional car insurance because you have auto insurance from your own car insurance company. Generally speaking, when you rent a car, the liability coverage limits you have in your own auto insurance policy remain in effect with the same limits. In addition, the comprehensive and collision coverages you have in your own auto insurance policy remain in effect with the same deductibles. You do have comprehensive and collision coverage don't you? See our article, "How Much Car Insurance Should You Buy?" for a listing of coverage types and definitions.
You may also have some kind of additional auto insurance coverage through your credit card but it is important that you check your credit card information for specific details. Some cards only offer coverage if you rent your car from a particular agency. Some limit the days for which coverage is available. Some will only provide coverage for certain types and/or classes of cars. With some cards, the coverage is not automatic and you must enroll in a program to get coverage. Some cards that advertise automatic rental insurance really only reimburse you for the deductible that you would have to pay under your regular insurance policy. Still others may provide only collision and comprehensive coverage, leaving you exposed for personal injury or property damage to others. Rental car agencies typically offer liability coverage in two parts - a supplemental liability policy protects against claims from others and a Loss Damage Waiver (LDW) covers the rental car. LDW is not technically insurance; rather, it is a company's agreement not to hold the consumer liable for loss from all or part of any damage to merchandise.
Before you rent a vehicle, realize the charges you could be responsible for and how these charges are covered or not covered by both your own auto insurance policy and the car insurance the rental company is offering.
If you suffer a loss that is not covered under your auto policy, check your other insurance policies. For example, if personal property has been stolen from your rental car, it may be covered under your homeowners or renters policy. Similarly, certain medical policies may cover costs of injuries not covered by your car insurance policy.
Related Car Insurance Articles
* How Much Car Insurance Should You Buy?
* Which Cars Keep Your Insurance Rates Affordable
* Eight Easy Ways In Which To Cut Costs On Your Auto Insurance
* Purchasing a Road Hazard Warranty
* Types of Auto Insurance Coverage Explained
* The Many Benefits of Travel Protection Plans
* Auto Insurance Basics
* Shopping Options for Auto Insurance
* Tips for First Time Insurance Buyers
* The Benefits of Being in an Automotive Club
* Optional Auto Insurance Coverages in Florida
* Auto Insurance Discounts To Ask About
* Ways in Which to Lower Your Car Insurance Rates
* Auto Insurance Rating Factors
* Florida No-Fault Insurance
* The Basics of a Personal Liability Umbrella Policy
* How Claims Affect Insurance Premiums
* What does liability insurance protect?
Keep in mind; you may not need to buy this additional car insurance because you have auto insurance from your own car insurance company. Generally speaking, when you rent a car, the liability coverage limits you have in your own auto insurance policy remain in effect with the same limits. In addition, the comprehensive and collision coverages you have in your own auto insurance policy remain in effect with the same deductibles. You do have comprehensive and collision coverage don't you? See our article, "How Much Car Insurance Should You Buy?" for a listing of coverage types and definitions.
You may also have some kind of additional auto insurance coverage through your credit card but it is important that you check your credit card information for specific details. Some cards only offer coverage if you rent your car from a particular agency. Some limit the days for which coverage is available. Some will only provide coverage for certain types and/or classes of cars. With some cards, the coverage is not automatic and you must enroll in a program to get coverage. Some cards that advertise automatic rental insurance really only reimburse you for the deductible that you would have to pay under your regular insurance policy. Still others may provide only collision and comprehensive coverage, leaving you exposed for personal injury or property damage to others. Rental car agencies typically offer liability coverage in two parts - a supplemental liability policy protects against claims from others and a Loss Damage Waiver (LDW) covers the rental car. LDW is not technically insurance; rather, it is a company's agreement not to hold the consumer liable for loss from all or part of any damage to merchandise.
Before you rent a vehicle, realize the charges you could be responsible for and how these charges are covered or not covered by both your own auto insurance policy and the car insurance the rental company is offering.
If you suffer a loss that is not covered under your auto policy, check your other insurance policies. For example, if personal property has been stolen from your rental car, it may be covered under your homeowners or renters policy. Similarly, certain medical policies may cover costs of injuries not covered by your car insurance policy.
Monday, May 11, 2009
Wear a Motorcycle Helmet - Please?
When it comes to riding motorcycles, there's one topic where many people agree to disagree: mandatory helmet use laws.
Against Helmets
To be fair, most people aren't actually against helmets per se. Rather, they're against forcing anyone to wear them. They view wearing a helmet as a personal choice, and believe that making someone wear a helmet amounts to trampling on their personal rights and freedoms as Americans. The motorcycle represents many things to different people, such as freedom from restraint, the feeling of power and speed or a certain solitude that can only be gained by riding alone with nothing in front of you but the open road. But let's face it. No one rides a motorcycle because they want to be safe. That's not to say riders don't want to be as safe as possible. It's just that many want to do it on their own terms.
Another point often raised by groups such as ABATE revolves around the fact that helmets, by themselves, don't really solve the problem of motorcycle safety. They believe that by focusing solely on helmet use laws, politicians and others ignore many other problems faced by riders, like right-of-way violations and general ignorance of motorcycles on the part of other drivers, and the lack of proper operator training and experience for motorcyclists.
For Helmets
The advocates for mandatory helmet use laws usually include safety organizations and governments. They also include those who feel their lives have been saved by a helmet, and people who feel that riders injured due to lack of a helmet represent a financial drain on society because of higher medical costs and disability payments. Their feelings can perhaps best be explained by a Massachusetts federal court judge responding to the argument that wearing a helmet should be a personal choice because only the rider is harmed in an accident: "The public has an interest in minimizing the resources directly involved. From the moment of injury, society picks the person up off the highway; delivers him to a municipal hospital and municipal doctors; provides him with unemployment compensation if, after recovery, he cannot replace his lost job; and, if the injury causes permanent disability, may assume responsibility for his and his family's subsistence. We do not understand a state of mind that permits plaintiff to think that only he himself is concerned."
Obviously, this argument does not sway everyone, particularly libertarians. Many studies have been done by the National Highway Traffic Safety Administration, the Insurance Institute for Highway Safety, the National Transportation Safety Board and other private researchers. Almost all serious, peer-reviewed studies conclude that helmets help reduce the incidence of injury and death to riders and the cost of the resulting medical treatment and that universal helmet laws increase helmet use and lower overall costs. Even the serious riders at Motorcyclist magazine believe that helmets are important (although they don't explicitly advocate use laws), so it's not just ignorant cagers (those who ride inside a vehicle, or "cage") trying to impose their will on riders due to poor awareness.
Against Helmets
To be fair, most people aren't actually against helmets per se. Rather, they're against forcing anyone to wear them. They view wearing a helmet as a personal choice, and believe that making someone wear a helmet amounts to trampling on their personal rights and freedoms as Americans. The motorcycle represents many things to different people, such as freedom from restraint, the feeling of power and speed or a certain solitude that can only be gained by riding alone with nothing in front of you but the open road. But let's face it. No one rides a motorcycle because they want to be safe. That's not to say riders don't want to be as safe as possible. It's just that many want to do it on their own terms.
Another point often raised by groups such as ABATE revolves around the fact that helmets, by themselves, don't really solve the problem of motorcycle safety. They believe that by focusing solely on helmet use laws, politicians and others ignore many other problems faced by riders, like right-of-way violations and general ignorance of motorcycles on the part of other drivers, and the lack of proper operator training and experience for motorcyclists.
For Helmets
The advocates for mandatory helmet use laws usually include safety organizations and governments. They also include those who feel their lives have been saved by a helmet, and people who feel that riders injured due to lack of a helmet represent a financial drain on society because of higher medical costs and disability payments. Their feelings can perhaps best be explained by a Massachusetts federal court judge responding to the argument that wearing a helmet should be a personal choice because only the rider is harmed in an accident: "The public has an interest in minimizing the resources directly involved. From the moment of injury, society picks the person up off the highway; delivers him to a municipal hospital and municipal doctors; provides him with unemployment compensation if, after recovery, he cannot replace his lost job; and, if the injury causes permanent disability, may assume responsibility for his and his family's subsistence. We do not understand a state of mind that permits plaintiff to think that only he himself is concerned."
Obviously, this argument does not sway everyone, particularly libertarians. Many studies have been done by the National Highway Traffic Safety Administration, the Insurance Institute for Highway Safety, the National Transportation Safety Board and other private researchers. Almost all serious, peer-reviewed studies conclude that helmets help reduce the incidence of injury and death to riders and the cost of the resulting medical treatment and that universal helmet laws increase helmet use and lower overall costs. Even the serious riders at Motorcyclist magazine believe that helmets are important (although they don't explicitly advocate use laws), so it's not just ignorant cagers (those who ride inside a vehicle, or "cage") trying to impose their will on riders due to poor awareness.
A Woman's Insurance Buying Guide
Women often feel vulnerable when purchasing a car because they sometimes think they will be taken advantage of in the car buying process. As a woman, if you feel like you can't haggle a price or just don't like to, you can at least purchase a car that will give you a low car insurance rate. And, because of the characteristics of insurance friendly vehicles, they are often the less expensive cars to buy anyhow. So, if you are a woman looking into getting a car insurance quote for a new vehicle, make sure to consider first what car you want to buy.
The cost of a car insurance quote should be at the top of the list when a woman is considering the total price of purchasing a new vehicle. Just because she buys a smaller, cheaper car does not insure a cheaper insurance rate. And, although car insurance for women tends to be cheaper than for a man, a woman's driving history is another of many factors that are considered when determining a car insurance rate. Characteristics of the vehicle being purchased plays a large role in insurance costs.
Below is a list of features or types of vehicles to avoid to get the best stretch out of your insurance buck.
The cost of a car insurance quote should be at the top of the list when a woman is considering the total price of purchasing a new vehicle. Just because she buys a smaller, cheaper car does not insure a cheaper insurance rate. And, although car insurance for women tends to be cheaper than for a man, a woman's driving history is another of many factors that are considered when determining a car insurance rate. Characteristics of the vehicle being purchased plays a large role in insurance costs.
Below is a list of features or types of vehicles to avoid to get the best stretch out of your insurance buck.
Hard-to-Find Car Insurance
There are a few reasons why a person would have difficulty finding car insurance through a regular insurance company: not driving long enough; having a car so new there is no insurance record or a high performance vehicle; living where there is a high amount of crime; and too many citations on your driving record. In any of these circumstances, a traditional auto insurer may be reluctant to provide coverage due to the higher risk.
In this case, there are two options: find a company that deals with “high-risk” drivers or join a risk pool assigned by the state you live in. With a state assigned risk pool, a system where insurers put in the amount of money equivalent to the business they have in the state, it will be likely to have higher premiums. Private insurance companies that sell “high-risk” or nonstandard policies will be more likely to provide more comprehensive coverage to someone with a bad driving record or owner of a high performance car than a risk pool.
If none of the insurance agents you call will insure you, don't give up. There are several routes to take to ensure you get the auto coverage you need. Any insurers who have provided coverage for your home or vehicle in the past should be able to supply a list of companies to call, and dialing your sate insurance department is likely to turn up more insurers to put on your list of possibilities.
When it comes time for the teenager in the house to start driving, call your insurance agent and let them know there will be an extra driver in the house. Then you can either add your teen to your own policy or, if they will be driving their own car, insure them under your current insurance provider to get a multi-driver household discount. If your teen is a good student, most insurers will offer a good grade discount for making at least a 'B' average and/or taking driving safety classes.
An umbrella policy, designed to pad your auto insurance, typically provides from one to five million more dollars in liability overage than a normal insurance policy. It's like having an extra layer of padding, or coverage, if ever sued in a lawsuit after an accident. An umbrella policy will help to cover any extra expenses after your liability coverage is exhausted.
Costing in the range from one hundred and fifty to three hundred dollars for one million dollars of coverage, the prices strongly jump as the next million will cost another $75, and $50 following that. Most insurers want policyholders to have at least $250,000 of liability coverage on your auto policy before they will sell you an umbrella policy for one million dollars coverage additionally.
Though often thought to be too complicated and too expensive, umbrella liability can easily be coordinated to sit on top of your current auto insurance coverage to give you some extra protection. In the days where litigation over next to nothing happens frequently, some people think a person shouldn't be without an umbrella policy. After all, it does pay up to one million dollars or more of a claim in addition to your usual insurance coverage.
In this case, there are two options: find a company that deals with “high-risk” drivers or join a risk pool assigned by the state you live in. With a state assigned risk pool, a system where insurers put in the amount of money equivalent to the business they have in the state, it will be likely to have higher premiums. Private insurance companies that sell “high-risk” or nonstandard policies will be more likely to provide more comprehensive coverage to someone with a bad driving record or owner of a high performance car than a risk pool.
If none of the insurance agents you call will insure you, don't give up. There are several routes to take to ensure you get the auto coverage you need. Any insurers who have provided coverage for your home or vehicle in the past should be able to supply a list of companies to call, and dialing your sate insurance department is likely to turn up more insurers to put on your list of possibilities.
When it comes time for the teenager in the house to start driving, call your insurance agent and let them know there will be an extra driver in the house. Then you can either add your teen to your own policy or, if they will be driving their own car, insure them under your current insurance provider to get a multi-driver household discount. If your teen is a good student, most insurers will offer a good grade discount for making at least a 'B' average and/or taking driving safety classes.
An umbrella policy, designed to pad your auto insurance, typically provides from one to five million more dollars in liability overage than a normal insurance policy. It's like having an extra layer of padding, or coverage, if ever sued in a lawsuit after an accident. An umbrella policy will help to cover any extra expenses after your liability coverage is exhausted.
Costing in the range from one hundred and fifty to three hundred dollars for one million dollars of coverage, the prices strongly jump as the next million will cost another $75, and $50 following that. Most insurers want policyholders to have at least $250,000 of liability coverage on your auto policy before they will sell you an umbrella policy for one million dollars coverage additionally.
Though often thought to be too complicated and too expensive, umbrella liability can easily be coordinated to sit on top of your current auto insurance coverage to give you some extra protection. In the days where litigation over next to nothing happens frequently, some people think a person shouldn't be without an umbrella policy. After all, it does pay up to one million dollars or more of a claim in addition to your usual insurance coverage.
Understanding Auto Insurance
It would be helpful if when trying to purchase auto insurance for the first time there was a starter’s package that would come with a huge explanation and guarantee you are purchasing exactly the correct coverage for the cheapest price. Unfortunately, this does not happen! New patrons to auto insurance coverage are required to learn on their own the ins and outs of auto insurance. Whether the time has come that your parents have kicked you off of their policy or you are a new driver purchasing your own policy, we can help you figure out auto insurance by explaining the terms, what is generally offered, and how to keep the price low.
While most auto insurance companies work the same and offer the same services, some of the particulars in each company may be different. It is very important to know the details of the terms that apply with any auto insurance company, so do not just assume that one company’s offering mirrors another. Any time you have a question regarding a specific coverage or understanding a policy, feel free to search our site for answers followed by contacting your insurer. Listed below are topics that are generally misunderstood by new auto insurance customers. We’ll do our best to explain them to you and the importance of having them.
State Requirements
Yes, it is a law in almost every state that all drivers must have proof of financial responsibility to legally operate a vehicle on public roads. This form of financial responsibility usually is in the form of auto insurance. The purpose of this law is to demand that all drivers have a way to be financially responsible for any damages they may cause to another person’s body or their property. These liability insurances only apply to the other person’s injuries or property damage, not to the policyholder. Other types of insurance must be purchased and included in the policy for the policyholder’s injuries and property damage to be covered.
When looking at an insurance policy, it is often read as 25/50/25. These numbers reflect the amount the policyholder has purchased for bodily injury liability and property damage liability, and we’ll go over those definitions later. Keep in mind that the numbers used here are only for the example and your state may have different requirements. The first two numbers apply for the bodily injury liability purchased. In this case the 25 is representing a maximum amount, or limit, of $25,000 that can be applied to a single person’s injury expenses, with a combined total of a limit of $50,000 (the second number is 50) for all person’s injuries. The third number, again 25, represents the $25,000 limit the insurer will pay for any property damage, such as the damage done to the car you’ve hit. The insurance company will only pay up to these amounts, and more than the minimum requirement may be purchased by the policyholder if desired.
Bodily injury liability is what the policyholder purchases to have the auto insurance company pay for any physical harm that is caused to the other driver and passengers involved in the accident. This will cover their medical expenses as well as any death costs, loss of wages, and pain and suffering costs. Also, it applies towards any court fees if you are taken to court because of the accident. Again, the members in the policyholder’s vehicle are not covered here.
Property damage liability covers the cost to repair any property that was damaged in an accident. This can apply towards another vehicle, or a fence, pole, or other building structure or property. Any expense that exceeds the amount of property liability that is purchased will be the sole responsibility of you as the policyholder.
Additional Coverage
Some states call for additional coverage as part of their basic minimum requirements. Check with your state on what coverage and amounts they require. The following list those requirements, but if your state does not require them, it is still very worthwhile to look into them as they will provide you with more protection.
Personal injury protection is a coverage that is parallel to health insurance. This coverage will provide medical expenses to you and your passengers and policy members. Even if you already carry health insurance, personal injury protection may be valuable as it can provide a bigger cushion in preventing you from having to pay for your medical expenses out of pocket.
Uninsured/underinsured motorist liability is just as it sounds; it provides protection to you against drivers who have little to no auto insurance. When this coverage is included in your policy, your insurance company will pay whatever bills the other driver’s insurance did not pay. This prevents you from having to pay for someone else’s mistake to your property.
You may have heard about comprehensive and collision insurance before. These are not required by any state, but they are required by companies who loan you money to purchase or lease your vehicle. These two coverage options cover just about any other means of damage done to your vehicle, including theft, vandalism, weather-related damage. These amounts are usually determined by the cash value of your vehicle at the time right before the accident and are paid for after you have paid your deductible.
Keeping Auto Insurance Cheap
There are a few ways any driver can keep their auto insurance premiums low. First, as long as you remain a cautious driver and receive little to no traffic tickets or accidents, your insurance rates will stay as cheap as possible. The more you demonstrate you are a safe driver, the cheaper your rates will be. Also, brand new cars are more expensive to insure because they are more expensive to repair if the insurer ever needs to do so. Drive a modest vehicle that is a few years old. You can also receive discounts on your premium by taking driving classes or if you are a student by getting good grades.
While most auto insurance companies work the same and offer the same services, some of the particulars in each company may be different. It is very important to know the details of the terms that apply with any auto insurance company, so do not just assume that one company’s offering mirrors another. Any time you have a question regarding a specific coverage or understanding a policy, feel free to search our site for answers followed by contacting your insurer. Listed below are topics that are generally misunderstood by new auto insurance customers. We’ll do our best to explain them to you and the importance of having them.
State Requirements
Yes, it is a law in almost every state that all drivers must have proof of financial responsibility to legally operate a vehicle on public roads. This form of financial responsibility usually is in the form of auto insurance. The purpose of this law is to demand that all drivers have a way to be financially responsible for any damages they may cause to another person’s body or their property. These liability insurances only apply to the other person’s injuries or property damage, not to the policyholder. Other types of insurance must be purchased and included in the policy for the policyholder’s injuries and property damage to be covered.
When looking at an insurance policy, it is often read as 25/50/25. These numbers reflect the amount the policyholder has purchased for bodily injury liability and property damage liability, and we’ll go over those definitions later. Keep in mind that the numbers used here are only for the example and your state may have different requirements. The first two numbers apply for the bodily injury liability purchased. In this case the 25 is representing a maximum amount, or limit, of $25,000 that can be applied to a single person’s injury expenses, with a combined total of a limit of $50,000 (the second number is 50) for all person’s injuries. The third number, again 25, represents the $25,000 limit the insurer will pay for any property damage, such as the damage done to the car you’ve hit. The insurance company will only pay up to these amounts, and more than the minimum requirement may be purchased by the policyholder if desired.
Bodily injury liability is what the policyholder purchases to have the auto insurance company pay for any physical harm that is caused to the other driver and passengers involved in the accident. This will cover their medical expenses as well as any death costs, loss of wages, and pain and suffering costs. Also, it applies towards any court fees if you are taken to court because of the accident. Again, the members in the policyholder’s vehicle are not covered here.
Property damage liability covers the cost to repair any property that was damaged in an accident. This can apply towards another vehicle, or a fence, pole, or other building structure or property. Any expense that exceeds the amount of property liability that is purchased will be the sole responsibility of you as the policyholder.
Additional Coverage
Some states call for additional coverage as part of their basic minimum requirements. Check with your state on what coverage and amounts they require. The following list those requirements, but if your state does not require them, it is still very worthwhile to look into them as they will provide you with more protection.
Personal injury protection is a coverage that is parallel to health insurance. This coverage will provide medical expenses to you and your passengers and policy members. Even if you already carry health insurance, personal injury protection may be valuable as it can provide a bigger cushion in preventing you from having to pay for your medical expenses out of pocket.
Uninsured/underinsured motorist liability is just as it sounds; it provides protection to you against drivers who have little to no auto insurance. When this coverage is included in your policy, your insurance company will pay whatever bills the other driver’s insurance did not pay. This prevents you from having to pay for someone else’s mistake to your property.
You may have heard about comprehensive and collision insurance before. These are not required by any state, but they are required by companies who loan you money to purchase or lease your vehicle. These two coverage options cover just about any other means of damage done to your vehicle, including theft, vandalism, weather-related damage. These amounts are usually determined by the cash value of your vehicle at the time right before the accident and are paid for after you have paid your deductible.
Keeping Auto Insurance Cheap
There are a few ways any driver can keep their auto insurance premiums low. First, as long as you remain a cautious driver and receive little to no traffic tickets or accidents, your insurance rates will stay as cheap as possible. The more you demonstrate you are a safe driver, the cheaper your rates will be. Also, brand new cars are more expensive to insure because they are more expensive to repair if the insurer ever needs to do so. Drive a modest vehicle that is a few years old. You can also receive discounts on your premium by taking driving classes or if you are a student by getting good grades.
Car Insurance: What Not to Do
ou can save money on your car insurance. That's the good news. The bad news is that you can't safely save money by slashing your coverages dramatically and dropping damage coverage for your car. Sorry for the reality check, but if anyone tells you to improve your financial situation by calling your auto insurance company and buying a lot less coverage, they simply don't have all the facts.
What? Cheaper is better!
Sometimes, yes. However, you get what you pay for. Everyone wants to save money on their insurance premium, but no one wants to pay out of pocket when the unexpected happens. Car insurance exists because bad things happen. If you reduce your liability coverage and drop uninsured/underinsured motorist coverage, and drop comprehensive and collision or raise the deductibles, who pays when there's an accident? Most likely, you do.
Dropping and reducing auto insurance coverages is a lot like gambling. It's a decision to stake your financial future on the assumption that you are an excellent driver, that everyone you encounter is an excellent (and insured) driver, and that your car will never be damaged or stolen.
But my friend saved a lot by getting the bare minimum.
It's possible to save money if you only get what's required, just like it's possible to win the lottery or predict the stock market. That doesn't make it a good bet. Let's look at why.
Suppose you have an old car that's only worth around $2,000. Your friend tells you he saved $300 a year by dropping collision coverage. You like saving money, so you do the same, but the next week you lose control of your car and hit a utility pole. You were only going 20 MPH, but that's enough to total the car, since repair costs exceed $2,000. You did save $300 on your premium, but you have no car and no coverage. Now you have to find a car that's as reliable as your old one for as little money as possible.
What if you also tried to save money by lowering your liability limits to the state minimum? For example, in Ohio the minimum limit for property damage coverage is $7,500. If you knocked the utility pole over into a storefront, taking out power for the block at the same time, who pays? If it costs $15,000 to repair the pole and replace the store's window and display, you can bet the extra $7,500 will come out of your pocket somehow. If you have assets, those will be used to provide payment, and if you don't have assets, you'll usually be asked to work out a payment plan. Now you've actually cost yourself money instead of saving it, and this accident didn't even involve any injuries.
So how can I save money?
We did mention that there was good news. Although you don't want to eliminate the protection you have with uninsured/underinsured motorist and Comp & Collision coverages unless there's no choice, you still have options. First, make sure you're getting all of the discounts you're eligible for. Next, compare auto insurance rates from other companies to see if you're paying more than you have to for the same coverage. Rates can vary considerably from one company to the next, so investing a little time in comparing quotes might pay big dividends in savings.
What? Cheaper is better!
Sometimes, yes. However, you get what you pay for. Everyone wants to save money on their insurance premium, but no one wants to pay out of pocket when the unexpected happens. Car insurance exists because bad things happen. If you reduce your liability coverage and drop uninsured/underinsured motorist coverage, and drop comprehensive and collision or raise the deductibles, who pays when there's an accident? Most likely, you do.
Dropping and reducing auto insurance coverages is a lot like gambling. It's a decision to stake your financial future on the assumption that you are an excellent driver, that everyone you encounter is an excellent (and insured) driver, and that your car will never be damaged or stolen.
But my friend saved a lot by getting the bare minimum.
It's possible to save money if you only get what's required, just like it's possible to win the lottery or predict the stock market. That doesn't make it a good bet. Let's look at why.
Suppose you have an old car that's only worth around $2,000. Your friend tells you he saved $300 a year by dropping collision coverage. You like saving money, so you do the same, but the next week you lose control of your car and hit a utility pole. You were only going 20 MPH, but that's enough to total the car, since repair costs exceed $2,000. You did save $300 on your premium, but you have no car and no coverage. Now you have to find a car that's as reliable as your old one for as little money as possible.
What if you also tried to save money by lowering your liability limits to the state minimum? For example, in Ohio the minimum limit for property damage coverage is $7,500. If you knocked the utility pole over into a storefront, taking out power for the block at the same time, who pays? If it costs $15,000 to repair the pole and replace the store's window and display, you can bet the extra $7,500 will come out of your pocket somehow. If you have assets, those will be used to provide payment, and if you don't have assets, you'll usually be asked to work out a payment plan. Now you've actually cost yourself money instead of saving it, and this accident didn't even involve any injuries.
So how can I save money?
We did mention that there was good news. Although you don't want to eliminate the protection you have with uninsured/underinsured motorist and Comp & Collision coverages unless there's no choice, you still have options. First, make sure you're getting all of the discounts you're eligible for. Next, compare auto insurance rates from other companies to see if you're paying more than you have to for the same coverage. Rates can vary considerably from one company to the next, so investing a little time in comparing quotes might pay big dividends in savings.
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