You were on the phone, got distracted and before you knew it traffic had stopped, giving you no room to stop and you rear end the girl in front of you. Or, let's say you're driving along and a deer jumps out and rams into the side of your door.
Now, let's say you need to file and claim and get your car fixed. But, are your rates going to go up?
In the first case, more than likely they will depending on how much your insurance company pays out to fix both cars and medical bills if anyone was injured.
But, in the second example, since this will be a comprehensive claim your rates should not see an increase at your renewal. Unless you have a long history of hitting deer then the people from PETA will be out to get you. Or if you file a lot of small glass damage claims then your rates could be affected or you may have to pay a higher deductible for comprehensive in which case small glass damage will be less than your deductible and you will pay out of pocket.
Part 2: How long does an accident stay on my record?
Ok, so back to the example where you rear ended someone. We have already established that you are going to see your insurance rates go up. Now, we need to find out how long and how much will they go up.
State insurance boards usually allow insurance companies to charge for a accident for 3 years from the day they started charging for it. Not from the time you got into the accident. You got in the accident in December and your policy runs from October to April. Your rates won't be affected until April of the next year and the surcharge will drop off 3 years from that April.
How much will your rates go up? Are they trying to get back the money they paid out for my claim? You can usually expect a rate increase of between 20-40% on average per six months. They could go up even more if you lose some discounts you were getting, such as a claim free discount.
The increase is not a recoupment of the monies paid out by your insurance company. It is designed to charge you a premium based on the risk, or chance, that you will get into another accident in the next 3 years. You are a higher risk to the insurance company and they are able to charge you for the higher risk you present to them.
If it was based on how much the insurance company paid out then you wouldn't be able to afford it if you totaled out your 2004 Nissan Maxima at $25,000 and you had to pay that back within the 3 year surcharge period. Makes sense? Good, now get off the cell phone!
Monday, August 13, 2007
Get Cheap Auto Insurance For Your Teen Son
Your son has just obtained his license and with that a new found sense of freedom. Now you ask how to get cheap auto insurance for my son ? Car insurances can vary dramatically in price so read on to learn how to buy car insurance that is affordable for your teen drivers.
Because teens lack driving experience insurers consider them a high risk to insure and thus the premiums assigned are much higher than an adults insurance rates would be. There are a few things you can do to help reduce the rates you pay for your teen drivers.
First you need to stress to them how important it is for them to keep a clean driving record. That means driving safely – no speeding tickets, no traffic violations, and no accidents. Over a period of time there safe driving will be rewarded with lower premiums.
You can also reduce their rates by purchasing insurance with a higher deductible. The higher the deductible is the lower the premium is.
If you are going to be purchasing a vehicle for your teen choose a vehicle that is built well with extra safety features, and do not choose a vehicle that falls into a sports class or higher risk rating class. Be sure to check the class the vehicle falls into.
The graduated licensing laws have come into effect in most states in the USA and some provinces in Canada. The rules will vary from one location to another but the basic underlying philosophy is to restrict new drivers by limiting what their license will allow them to do.
They may be issued a full auto license such as a class 5 but there is usually a letter designation behind it to indicate they are a new driver. These new drivers have nighttime driving restrictions, vehicle occupant restrictions, and a 0 alcohol tolerance restriction to name just a few. They will also be required to take an additional test after a specific period of time to remove them from the new driver programmer.
But you’re still wondering where to get cheap auto insurance for my son? Teenage drivers can dramatically reduce the cost of insurance by purchasing a stand alone policy from an agency that specializes in providing teen insurance. A stand alone policy means they are not added as an additional driver on your insurance but rather carry their own insurance.
These insurance companies reduce their risk for insuring teens by placing certain concessions on the driving habits of them. They may require driving school, no driving after dark, or various other restrictions which allow them to keep the premiums lower for teen drivers.
The statistics for teen drivers aren’t good. A 16 year old driver is 10 times more likely to get into an accident than an adult between the ages of 30 and 59, so you can see why insurance companies are hesitant to provide good rates.
The best thing you can do for your teenager and his or her insurance rates is to teach responsibility and make them accountable. Make them earn your trust for the use of the car, and make them accountable to pay at least a portion of their insurance premiums. They can do this by working a part time job which also breeds maturity, so it’s a win-win all the way.
You and your teenager are thrilled with the new found freedom for both of you. So now you need to do your homework and research teen insurance rates so you can get them on the road. What are you waiting for?
Saturday, August 11, 2007
Tips To Avoid Car Insurance Premium Increases & Becoming Assigned Risk
Claim Reports: You know about credit reports, you should also know about claim reports. C.L.U.E.® (Comprehensive Loss Underwriting Exchange), is a claim report service provided by ChoicePoint, Inc. ChoicePoint, Inc. states on their web site "C.L.U.E. is a claim history information exchange that enables insurance companies to access prior claim information in the underwriting and rating process. C.L.U.E. Personal Property reports contain up to five years of personal property claims matching the search criteria submitted by the inquiring insurance company. Data provided in C.L.U.E. reports includes policy information such as name, date of birth and policy number, and claim information such as date of loss, type of loss and amounts paid."
Tip: C.L.U.E. reports contain information on claims history by a residence address. Just like credit reports, a C.L.U.E. report may have errors. It is advisable to obtain a copy of your C.L.U.E. report at ChoiceTrust.com to check your report for errors.
Credit reports: Insurance companies are now looking at credit reports to determine future premiums. They have determined that people with better credit scores have fewer claims. Consequently, if you have a poor credit report you may find yourself paying more for car insurance.
Tip: Always make at least the minimum payment for your bills on time, particularly your insurance bill.
Glass Coverage: Most car insurance salespeople recommend "full" glass coverage for an additional premium, when you purchase collision coverage for your car. They remind you how much it costs to replace all your windows if broken by a vandal. What they do not tell you, and it is unlikely that they would even know (I would only trust the answer from an underwriter, not a sales representative), is whether your insurance company will use a previous glass claim to increase your future premium and whether they will report your glass claims to C.L.U.E.
Some insurance companies will report glass claims to C.L.U.E. and then use these claims to raise your premium or even worse, cancel your car insurance policy making you assigned risk with a substantial premium increase. Allstate notified me that after four claims in less than five years, they terminated my auto insurance policy and then offered to sell me coverage in their Indemnity Company with a shocking premium increase. These claims consisted of two claims for a broken windshield, one for a stolen and recovered car and one accident.
I had a sports car and had to endure a total premium increase over a period of four years of approximately $12,000 and remain claim free before I became eligible for coverage outside of the assigned risk pool. I wrote a letter to the president of Allstate complaining that they should not have considered my glass claims when canceling my car insurance because the glass claims were made under a separate part of the policy for which I paid a separate and additional premium. Allstate responded in a letter stating "Although this claim activity does not indicate that you were directly at fault in each loss, the frequency and severity of the above losses was not within our range of acceptability. After careful review, I regret to inform you that we cannot reverse our original decision regarding the above policy. We have however continued to offer coverage in our Indemnity Company."
Tip: Check with the underwriting department of your insurance company to see if they will consider glass claims when assessing premiums or if they report glass claims to C.L.U.E. If yes, do not make a glass claim. The two windshields which Allstate provided me with were aftermarket windshields which would have cost me less than $300 each. During the last 30 years of my driving history, I have experienced two broken front windshields, one broken rear windshield and two broken side windows. While the financial risk of totaling a car can be substantial, the financial risk of replacing a windshield is comparatively insignificant. It does not make sense to file a glass claim if it will increase your premium. You may even want to decline this coverage altogether and save the premium.
Tip for leased vehicles: Some lease agreements require that the car be returned with an OEM windshield. If you lease a car and replace a front windshield using your "full" glass coverage, insist that the insurance company provide you with an OEM windshield from the manufacturer. If you pay for the windshield yourself, check your lease agreement carefully to see if you must use an OEM windshield from the manufacturer or if you can use an aftermarket windshield. Some people with leased cars who have replaced a windshield with an aftermarket windshield are shocked, when they return their car, to find that the leasing company is charging them $800 for a new OEM windshield, even though the aftermarket windshield is in perfect condition.
Car Rental & Towing Coverage: While it may be a good idea to have this coverage, it is not always a good idea to use it. Some people have realized that this coverage is not just available when an accident has occurred. For instance, some people have used the car rental coverage when their car was in a repair shop or the towing coverage when their car broke down on the road. As with glass coverage, using this coverage may be the same as filing a claim.
Tip: C.L.U.E. reports contain information on claims history by a residence address. Just like credit reports, a C.L.U.E. report may have errors. It is advisable to obtain a copy of your C.L.U.E. report at ChoiceTrust.com to check your report for errors.
Credit reports: Insurance companies are now looking at credit reports to determine future premiums. They have determined that people with better credit scores have fewer claims. Consequently, if you have a poor credit report you may find yourself paying more for car insurance.
Tip: Always make at least the minimum payment for your bills on time, particularly your insurance bill.
Glass Coverage: Most car insurance salespeople recommend "full" glass coverage for an additional premium, when you purchase collision coverage for your car. They remind you how much it costs to replace all your windows if broken by a vandal. What they do not tell you, and it is unlikely that they would even know (I would only trust the answer from an underwriter, not a sales representative), is whether your insurance company will use a previous glass claim to increase your future premium and whether they will report your glass claims to C.L.U.E.
Some insurance companies will report glass claims to C.L.U.E. and then use these claims to raise your premium or even worse, cancel your car insurance policy making you assigned risk with a substantial premium increase. Allstate notified me that after four claims in less than five years, they terminated my auto insurance policy and then offered to sell me coverage in their Indemnity Company with a shocking premium increase. These claims consisted of two claims for a broken windshield, one for a stolen and recovered car and one accident.
I had a sports car and had to endure a total premium increase over a period of four years of approximately $12,000 and remain claim free before I became eligible for coverage outside of the assigned risk pool. I wrote a letter to the president of Allstate complaining that they should not have considered my glass claims when canceling my car insurance because the glass claims were made under a separate part of the policy for which I paid a separate and additional premium. Allstate responded in a letter stating "Although this claim activity does not indicate that you were directly at fault in each loss, the frequency and severity of the above losses was not within our range of acceptability. After careful review, I regret to inform you that we cannot reverse our original decision regarding the above policy. We have however continued to offer coverage in our Indemnity Company."
Tip: Check with the underwriting department of your insurance company to see if they will consider glass claims when assessing premiums or if they report glass claims to C.L.U.E. If yes, do not make a glass claim. The two windshields which Allstate provided me with were aftermarket windshields which would have cost me less than $300 each. During the last 30 years of my driving history, I have experienced two broken front windshields, one broken rear windshield and two broken side windows. While the financial risk of totaling a car can be substantial, the financial risk of replacing a windshield is comparatively insignificant. It does not make sense to file a glass claim if it will increase your premium. You may even want to decline this coverage altogether and save the premium.
Tip for leased vehicles: Some lease agreements require that the car be returned with an OEM windshield. If you lease a car and replace a front windshield using your "full" glass coverage, insist that the insurance company provide you with an OEM windshield from the manufacturer. If you pay for the windshield yourself, check your lease agreement carefully to see if you must use an OEM windshield from the manufacturer or if you can use an aftermarket windshield. Some people with leased cars who have replaced a windshield with an aftermarket windshield are shocked, when they return their car, to find that the leasing company is charging them $800 for a new OEM windshield, even though the aftermarket windshield is in perfect condition.
Car Rental & Towing Coverage: While it may be a good idea to have this coverage, it is not always a good idea to use it. Some people have realized that this coverage is not just available when an accident has occurred. For instance, some people have used the car rental coverage when their car was in a repair shop or the towing coverage when their car broke down on the road. As with glass coverage, using this coverage may be the same as filing a claim.
Car Insurance - What You Should Know
Most of us haven't got a clue about what our car insurance really covers. Here's what car insurance covers and how you can save money on your premium.
Collision Coverage
Collision insurance pays for repairs to your car from a collision regardless of who was at fault.
Raising the deductible - the amount you pay before your insurance company pays a claim - will save you hundreds of dollars a year on your premium. If you have an older car that's not worth a lot, dropping your coverage, especially if your car is worth less than your insurance premium, can save you $450 or more.
Comprehensive Coverage
Comprehensive insurance pays for non-collision damage to your car from such things as vandalism, break-ins, fire, natural disasters, and other causes.
Raising your deductible will lower your premium considerably. Dropping this coverage if you drive an older car will also save you money.
Liability Coverage
Liability coverage pays for claims made against you for property damage and physical injury. It's really the most important coverage because it protects you from losing your assets.
Don't skimp on this one. If you don't own much, you can stick with the minimum coverage. But if you do have assets you want to protect, get as much coverage as you can to protect those assets. Increasing your liability coverage won't cost you that much more.
Medical Coverage
Medical coverage pays medical expenses when you or your passengers have an accident. It also pays expenses if you or your family are injured in someone else's car.
Consider dropping this coverage if you already have health insurance. And if you don't have health insurance consider getting it instead of carrying medical coverage on your car insurance policy.
Good luck!
Collision Coverage
Collision insurance pays for repairs to your car from a collision regardless of who was at fault.
Raising the deductible - the amount you pay before your insurance company pays a claim - will save you hundreds of dollars a year on your premium. If you have an older car that's not worth a lot, dropping your coverage, especially if your car is worth less than your insurance premium, can save you $450 or more.
Comprehensive Coverage
Comprehensive insurance pays for non-collision damage to your car from such things as vandalism, break-ins, fire, natural disasters, and other causes.
Raising your deductible will lower your premium considerably. Dropping this coverage if you drive an older car will also save you money.
Liability Coverage
Liability coverage pays for claims made against you for property damage and physical injury. It's really the most important coverage because it protects you from losing your assets.
Don't skimp on this one. If you don't own much, you can stick with the minimum coverage. But if you do have assets you want to protect, get as much coverage as you can to protect those assets. Increasing your liability coverage won't cost you that much more.
Medical Coverage
Medical coverage pays medical expenses when you or your passengers have an accident. It also pays expenses if you or your family are injured in someone else's car.
Consider dropping this coverage if you already have health insurance. And if you don't have health insurance consider getting it instead of carrying medical coverage on your car insurance policy.
Good luck!
How to get cheap car insurance?
There are a number of ways that a teen driver can go about getting cheap car insurance. It is important to realize that there is actually a lot of variance when it comes to car insurance prices and costs. This is because the insurance is based on several variables and is comprised of various components that take those variables into account. Finding cheap motor insurance is partially dependent on how the vehicle is operated, the safety of the vehicle, the distance the vehicle will be driven, and the safety of the driver in general.
Operating a motor vehicle is certainly an aspect of life that many teens are excited about. Teen girls and boys are enthralled at the notion of hopping behind the wheel of a car and getting their driver's licenses as soon as possible. This philosophy, however, has implications for the insurance of the driver and can mean a lot when it comes to getting cheap car insurance for a teen. Teens operating a motor vehicle need to realize that the rates that they will get from an insurance company have an awful lot to do with their driving record.
Teen drivers are more prone to having higher car insurance rates because of the relatively high rate of accidents and incidents involving teen drivers. Finding cheap vehicle insurance for a teen can be a daunting task because the deck is virtually stacked against the particular age group because of the norm in driving incidents. For this reason, motor insurance companies offer premiums to drivers that continue to drive without incident or accident. Various programs are in place to enable teen drivers to work on incentive programs that reward good driving with better insurance rates.
If a teen is able to drive without speeding tickets, traffic violations, or accidents, the notion of lower rates for motor insurance becomes a bit more credible. Insurance companies hesitate to give insurance rates to teens at a low cost because the norm in terms of teen driving indicates that they are in a higher risk category than any other driving age, including seniors. Cheap car insurance becomes an issue of having a good driving record, a reputable insurance company, and high standards for motor vehicle operation.
There is also the issue of rating classes in terms of cars. Most quotes for car insurance also take into account the type of vehicle that is being driven. Cars in the sports-class, for example, rate higher and are not as likely to garner cheap car insurance because of the ultimate danger in driving a faster, sportier car. Buying a teen a sports car for their sixteenth birthday, then, is not the best of ideas if the goal is to get reasonable quotes for car insurance.
Finding cheap car insurance for a teen can be complex because they are in such a high risk category in terms of insurance providers. These companies are very cautious of supplying their lowest premiums to teen drivers because of the proven association between teens and reckless driving. Instead, getting cheap car insurance for a teen becomes about the other variables and making the car as safe as possible so that the determination of the premium rates can rely on other factors as opposed to the age of the driver.
Operating a motor vehicle is certainly an aspect of life that many teens are excited about. Teen girls and boys are enthralled at the notion of hopping behind the wheel of a car and getting their driver's licenses as soon as possible. This philosophy, however, has implications for the insurance of the driver and can mean a lot when it comes to getting cheap car insurance for a teen. Teens operating a motor vehicle need to realize that the rates that they will get from an insurance company have an awful lot to do with their driving record.
Teen drivers are more prone to having higher car insurance rates because of the relatively high rate of accidents and incidents involving teen drivers. Finding cheap vehicle insurance for a teen can be a daunting task because the deck is virtually stacked against the particular age group because of the norm in driving incidents. For this reason, motor insurance companies offer premiums to drivers that continue to drive without incident or accident. Various programs are in place to enable teen drivers to work on incentive programs that reward good driving with better insurance rates.
If a teen is able to drive without speeding tickets, traffic violations, or accidents, the notion of lower rates for motor insurance becomes a bit more credible. Insurance companies hesitate to give insurance rates to teens at a low cost because the norm in terms of teen driving indicates that they are in a higher risk category than any other driving age, including seniors. Cheap car insurance becomes an issue of having a good driving record, a reputable insurance company, and high standards for motor vehicle operation.
There is also the issue of rating classes in terms of cars. Most quotes for car insurance also take into account the type of vehicle that is being driven. Cars in the sports-class, for example, rate higher and are not as likely to garner cheap car insurance because of the ultimate danger in driving a faster, sportier car. Buying a teen a sports car for their sixteenth birthday, then, is not the best of ideas if the goal is to get reasonable quotes for car insurance.
Finding cheap car insurance for a teen can be complex because they are in such a high risk category in terms of insurance providers. These companies are very cautious of supplying their lowest premiums to teen drivers because of the proven association between teens and reckless driving. Instead, getting cheap car insurance for a teen becomes about the other variables and making the car as safe as possible so that the determination of the premium rates can rely on other factors as opposed to the age of the driver.
Cheap Auto Insurance Quotes - Tips For Getting The Lowest Rate
Finding auto insurance quotes online is easy, but finding the cheapest auto insurance rates can be more of a challenge. To get the lowest quotes, follow these tips to help you find ways to trim possibly hundreds off your auto insurance quotes.
1. Give them details – If you don’t provide information about your zip code, marital status, car’s safety features, and annual commuting miles, by default insurance companies will quote you a higher auto insurance rate. Provide as much detail as possible to make sure you get each discount that you qualify for.
2. Shop around – Auto insurance rates can vary as much as 300% between companies for the same coverage. You can save hundreds of dollars a year by comparing prices between companies. Don’t forget to check out your current insurance company, they may have lower rates for new customers that you may be able to negotiate for yourself.
3. Raise your deductible – Higher deductibles equal lower insurance premiums. For example, increasing your deductible from $250 to $500, can save you a hundred dollars or more on your annual premium. However, plan on having additional financial resources to cover the deductible in case of an accident.
4. Cut the miles you drive – For drivers who travel on average 40 miles or less a day, they qualify for a low mileage discount with most insurance companies. Consider carpooling or taking public transit a couple of days a week to reduce your car’s mileage to qualify for the discount. By flying or taking a train for vacations instead of driving, you can further reduce the miles on your car.
5. Switch drivers – For married couples, compare insurance quotes between the male as the main driver and the female as the main driver. You may get a lower quote if the female is insured on a truck and the male is insured on the minivan. Teens should also be insured on safer cars such as the family sedan, rather than a sports car.
6. Add an anti-theft device – By installing car alarms or a tracking system in your car, you will get a discount from auto insurance companies. Since anti-theft devices reduce the risk of your car being stolen, insurance companies pass on the savings to you. A certified defensive-driving class can also reduce your premium for three years with most insurance companies.
Next article soon!
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