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Where you live
or, more precisely, where you
keep your car at night has a
bearing on your chances of
having an accident or becoming a
victim of theft or vandalism.
That's why a vehicle owner in
Manhattan, New York, pays a
higher rate than the owner of an
identical vehicle in Black
Mountain, North Carolina.
Other factors
affecting regional insurance
rates include time and
efficiency of police response
and law enforcement, local road
and traffic conditions and the
quality of local medical
services. Most insurance companies factor
in the litigation rates in a
given area--that is, how many
lawsuits are filed, go to trial,
are settled out of court and for
how much.
Why are rates different for
different cars, even if the cars
cost the same?
Vehicles are also
grouped into categories
according to their chances of
being damaged, vandalized or
stolen. Insurers generally
consider the size and type of
vehicle, as well as the value
and the cost of repairs which
vary greatly, even on vehicles
that cost about the same amount.
Therefore, it is assumed that a
new sport utility vehicle is
expected to hold up better in an
accident than a sports car or a
subcompact or electric hybrid
car.
Putting insurance
aside for a moment, safety is
key when buying an automobile.
Your life and everyone who rides
with you depends on it! Some
cars are considered safer than
others because of their
performance record in safety
tests and real accidents.
That is why you
consumers should research
insurance coverage before you
buy your car. It helps you to
understand the actual cost and
indicates those vehicles with
good safety records. Your
insurer will ultimately reward
you for putting safety first.
What is
"no-fault" insurance?
No-fault
insurance is a system adopted in
some states that essentially
bypasses the conventional legal
procedure which finds fault in
an accident. This is the
procedure by which you hire a
attorney, file suit and possibly
go to court to prove the
accident was the other guy's
fault. No-fault simply does away
with the concept of one party or
the other being at fault--no
lawyers, no court, no judge, no
jury, no lengthy lawsuits
against the other party. This is
considered beneficial to
taxpayers, because it eliminates
costly legal proceedings that
the state must manage, and to
insurance policyholders, because
it helps keep rates down.
If you are
insured in a no-fault state and
have an accident, you don't go
after the other driver. You
contact your own insurer and
file a claim. Your own insurance
policy guarantees you immediate
compensation for damages,
medical expenses, lost wages,
essential services, rental car
arrangements etc.
The type and
range of no-fault coverage
varies from state to state. What
defines the limitations of
no-fault policies can differ in
two important areas:
-
Threshold--The
type of damage or injury or
the cost of repair or
recovery that triggers the
need for legal action.
-
Mandated--Benefit
Level The package of
benefits (medical, wage
loss, replacement services
and other expenses) your
state requires you to carry.
The details of
no-fault insurance can be
complicated. Contact your agent
or state's insurance department
for further information.
No. Some states,
while not mandating auto
insurance, have what is known as
financial responsibility laws
that require all drivers to be
able to pay for any damage or
injury they may cause. However,
carrying liability insurance is
still the best way for you to
meet your state's financial
responsibility requirements once
you know what they are.
UM and UIM policies are offered
by law in all states, including
no fault states. In fact, some
states require all motorists to
carry this coverage in order to
gain protection from inadequate
insurance coverage of other
drivers that may not carry
enough or higher limits as the
majority does; i.e.,
100-300-50,000.
First, call the
police to the scene to be sure
all pertinent information is
properly recorded. Your nerves
will be shaken right after an
accident, and it helps to have a
calm and knowledgeable person
walking you through the
necessary details.
Then, contact
your agent or policy holder
services or claims number
usually on your ID Card
immediately and ask about filing
a claim. If you followed all the
recommended guidelines and
procedures when you bought your
policy, you should be covered
within the benefits and or
limitations of that policy.
Remember, your car insurance
policy is designed to protect
you and anyone in your vehicle.
If the cost of your physical
damages or personal injuries
exceed the amount your policy
will pay for, it may be time to
take legal action against the
other party. Even if you have
no-fault insurance, sometimes
the only way to be compensated
is to place blame and
responsibility where it belongs.
That is why it is best to get a
police report documenting the
incident and any witnesses
statement while it is fresh in
their minds. This will preserve
that moment in time and remove
any room for doubt later in the
legal process.
It is better to
have the police report and not
really need it , than it is to
need one for court and not have
one because it would have taken
another thirty minutes to an
hour extra at the incident
scene.
Technically, in
most states your insurer can
cancel your policy only if:
- you
fail to pay your premium;
- you
lose your driver's license;
- you
are guilty of material
misrepresentation during the
application process i.e.,
you fail to notify your
insurer of a recorded
violation, such as a drunken
driving, or possession of
drugs or any illegal
activity offense; or
- you
fail to report a substantial
change of risk, such as
buying a new high
performance sports car to
replace an old high mileage
family sedan.
However, your
insurer can choose not to renew
your policy for a variety of
reasons.
Do you have a bad driving
record? Have you received a lot
of speeding tickets? Have you
ever been caught driving drunk?
Not only are these scenarios
considered unsafe and illegal,
they are justifiable cause for
your insurer to label you a bad
risk and refuse to renew your
policy. Some underwriters may
feel compelled to cancel
policies after only one
accident.
Where do you
live? Has the neighborhood
changed in the last few years?
Have the accident or crime rates
risen noticeably? As regions are
reassessed periodically, their
status could change and you
could suddenly find yourself
living in a higher risk area,
where your insurer's rates may
not be adequate to cover losses.
Even "good"
drivers can find themselves in
the position of being dropped by
their current carrier. Reasons
range from a couple of moving
violations, or multiple
accidents, or other serious
violations that make you a high
risk to situations outside your
control, such as when insurers
in your state are suffering
severe business losses. Overall
rises in claims or losses can
cause insurers to become highly
selective in determining whom
they can afford to offer to
insure.
That is why it is
important to note that if you
are licensed to drive, by law,
you are eligible for insurance.
However, your options for new
coverage may be limited. Each
state has created and regulates
a market of last resort for
those who cannot otherwise
obtain coverage. These groups
have various names, depending on
the state you live in, such as
assigned risk automobile
insurance plans or the residual
market, or the high risk pool.
Your assigned risk insurance agent or broker will know more about
the particulars in your state.
Regardless of the
reason you were dropped or
cancelled by your insurer, you
need to act immediately to get
another policy. Under no
circumstance should you drive
your vehicle without knowing one
hundred percent that you have
current insurance. Call your
local agent to help you find new
coverage. If you do find
yourself in the assigned risk
residual market pool, the price
may be higher but it may be your
only alternative in maintaining
your freedom to drive.
The most obvious
way to maintain your low risk
status is to keep a clean
driving record. If you've been
in an accident, consider taking
a defensive driving course. Even
those of us who have been
driving for years rarely know
the simple tricks to preventing
accidents through defensive
driving.
Also, look into purchasing
special safety and security
features for your car, such as
anti-lock brakes and an alarm
system, or try OnStar. Your
ARAIP insurance agent can give
you further tips on how to
convince your insurer you're a
safe driver.
Insurers often
discount their rates in order to
encourage good driving practices
and the use of safety and
security precautions. Depending
on the insurance company, you
can often lower your rates from
5 to 55 percent.
Sometimes the investment you
make in your vehicle is worth
the discount, and sometimes it's
simply worth some peace of mind.
For example, the purchase of
anti-lock brakes merits a
discount from nearly every
insurer, but the discount
probably will not pay for the
brakes which cost several
hundred dollars during the
normal life of your vehicle.
Anti-lock brakes are touted,
nonetheless, as a life-saving
feature and deserves serious
consideration when safety is a
top priority.Insurers generally
offer discounts for:
-
Safety Features
Anti-lock brakes, air bags
and passive restraint
systems i.e., automatic seat
belts.
-
Defensive Driving
Clean violation record,
driver's education courses
for teenagers and defensive
driving or accident
prevention courses for
adults insurance discounts
for the latter are required
in some states.
-
Security Systems
Alarms, electronic locks,
VIN etching and automotive
disabling devices.
-
Changing The Driving
Habits Try
commuting by public transit,
using a company vehicle for
work-related travel and
car-pooling.
-
Formal Agreements
Not to Drink and Drive
The availability of a
discount for signing such an
agreement varies among
insurers and states, however
is a powerful idea that
works.
-
Buying Home Owners
and Auto Policies from the
Same Company If you
own a home and an automobile
and you are insured by two
different companies, check
into the cost of carrying
both policies by one
insurer. Your agent can give
you guidance as to which
insurers offer discounts.
This will always offer your
the best buy, so put it in
your corner when shopping
for rates
You can also
lower your insurance rates by
requesting higher deductibles,
which is the amount of money you
pay out of pocket before you
make a claim. Increasing your
deductibles on collision and
comprehensive coverage from $100
to $250, or even $500, will
bring your rates down. Moreover,
you may not need collision and
comprehensive coverage if you
drive an older car. Ask your
agent which discounts are
available to you.
How does adding drivers to my
policy affect my rates?
The more people
you allow to drive your vehicle
on a regular basis, the greater
the chances of your vehicle
being in an accident. Teenagers
are especially expensive to
insure because they are the
least experienced drivers. A
driver's-ed course can help ease
the burden of insurance costs
since it teaches your teenager
defensive driving techniques. If
your child's high school does
not offer driver's-ed, try to
find one offered by another
school or a private firm in the
area. After all, the cost of
driver's-ed could be cheaper
than the extra cost of your
insurance. Many insurers offer
"good student" discounts as
well.
An adult's driving experience
can also affect your rates
significantly. Don't assume that
every adult you know has been
driving since age 16 or 17 or is
a competent driver with a clean
driving or insurance record.
Again, taking a defensive
driving course is a good way for
adults to prove they are also
responsible drivers, thus
lowering their risk and their
insurance premium rates.
