ILAIP Auto Insurance
An informational guide on IL
assigned risk and IL
preferred risk automobile
insurance.
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. Insurers even
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 you 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 agent
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.
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