Car Insurance Premiums: Monthly Vs. Annual Payments

When you purchase a car insurance policy, you’ll likely have the option of paying your annual premium upfront or opting for monthly payments. Depending on your budget, either option could be right for you. Here are a few things to consider:

Monthly payments may be easier to manage

If you’re on a budget and don’t have the luxury of a cushy savings account, monthly payments may be the only logical choice for you. For this reason, many policyholders opt to pay several smaller, easy-to-manage payments over a longer period of time rather than forking over one lump sum at the time of purchase.

Annual payments may be more convenient

Rather than pulling out your checkbook or logging in to your account every month, you only have to deal with making an annual payment once every year. If you’re looking to cut down on the number of bills you’ve got to keep up with every month, you may be relieved to pay off your insurance all at once and then push it out of your mind for the other 364 days of the year.

Monthly payments may help prevent lapses

If you choose to pay for your policy in annual payments, it’s extremely important to find out the exact date your policy will lapse in order to prevent losing your coverage. If you opt for monthly payments, it’s typically easier to keep up with the status of your policy. Plus, if you ever choose to switch providers you’ll likely only have one or two weeks of overlap between the old and new policy.

Annual payments could help you avoid overpaying on interest

Many insurance companies actually prefer their customers to pay for policies in one lump sum, because payment for coverage is securely guaranteed for a full year. Some offer discounts of as much as 5% for paying off the premium up front. In addition, a fee is sometimes applied to monthly payments (since the full premium hasn’t been covered yet). When you add up the extra fees and interest, some policyholders find that they’re actually shelling out an extra $100 or more by opting for monthly payments rather than one annual payment.

Before you swipe your credit card, take a second to weigh the advantages and disadvantages of both options. Do you have enough to cover the full premium in one lump payment? Can you afford to pay an extra $100 for the convenience of distributing your premium into smaller monthly payments? If you have questions about which option is right for your budget, discuss them with your licensed agent before you purchase.

Source: AutoInsurance

Automobile Insurance by the Numbers

Here’s something you need to know before you start your car this morning. Each year, there are about 12 million wrecks on U.S. roads. Following are some other numbers you ought to keep in mind:

1 – Cyprus ranks among the safest countries in which to drive. The U.S. is the eighth most dangerous, according to Forbes.com.

11 – Rank of automobile crashes in 2009 among the leading causes of death in the U.S. It was the first time wrecks ranked outside the Top 10 since 1981.

12 – Every 12 minutes, another person dies in a wreck on U.S. roads.

18 – Percentage of injury wrecks that included distracted driving as a cause.

24-48 – In hours, the maximum amount of time it take for an insurance company adjuster to contact you.

37 – Percentage of U.S. drivers who say they’ve fallen asleep at the wheel.

50 – The number of states that mandate automobile insurance (the District of Columbia does, too).

72 – In thousands, the amount of lives seatbelts saved from 2005 through 2009.

95 – The percent of automobile accidents that involve poor driver performance.

930 – In dollars, the average annual auto premium in Roanoke, VA, the least expensive U.S. city in which to drive.

1,199.66 – In dollars, the average auto insurance premium in the U.S. Do you come in above or below that amount?

6,456 – In dollars, the average annual auto premium in Detroit, the most expensive city in the U.S. in which to drive.

The bottom line: Accidents are too common, and U.S. driving practices are too horrid, for you to go without automobile insurance. Call a licensed agent today to get the lowdown on coverage.

Source: AutoInsurance

Stay in the Driver’s Seat When Adding a Teen to Your Policy

Few things frighten parents more than the prospect of their teen starting to drive. You have to worry about teaching that son or daughter to drive and riding with him or her until the lessons start to sink in. You have to worry when they go solo for the first time. You have to worry about whether your teen will speed, or text or otherwise be distracted behind the wheel and hit a mailbox or something.

And you have to worry about the expense of adding that teen driver to your auto insurance policy. It’s no secret that teenagers pay higher rates for coverage. It’s for good reason, or course. Teens have much higher accident rates than more mature drivers.

However, there are ways that you and your teen can work together to reduce just how much extra it will cost to have another driver listed on your policy. First, many carriers offer discounts for adding teen drivers to help ease some of the added cost to your premium. Some other ways to cushion the impact include the following:

• Good grades always pay off: Many carriers offer discounts to student drivers who have and maintain good grades, usually a B average or better in high school or college. This is for full-time students between the ages of 16 and 25.
• Demonstrate a commitment to safety: Lots of carriers offer price breaks for drivers younger than 21 who complete an approved driver-safety course.
• Out of sight, not out of mind: Dependents younger than 25 who attend school at least 100 miles away qualify for discounts from some providers.
• Monitoring devices: Some carriers offer policyholders the option of installing devices that monitor driving and reward safe practices.

The availability of these discounts varies by state and carrier, so ask your agent before assuming that any of them could apply to you and your teen.

But rate changes and discounts aren’t the only matters you have to think about as your teen begins driving. Following are some other things you should consider:

• Collision coverage: This type of coverage protects you in case your car hits something else, including another car. Animals are excluded, however. If your teen driver hits that mailbox, for example, and causes damage to your vehicle, collision coverage will kick in for the repairs once you meet the deductible. Collision coverage isn’t required by law, although most lenders will require you to have it before they give you a loan for the vehicle. If you don’t have it, now might be a good time to add it.
• Roadside assistance: You might be confident in your ability to change a tire in case of a blowout, but are you sure Junior or Missy can do it? If not, you might want to add this coverage to your policy to make sure he or she isn’t stranded in case you’re not available. Before you do this, however, make sure you don’t already have coverage through your warranty or through a service such as AAA.
• Increase liability insurance: Now is a good time to reconsider your liability limits. If your teen driver causes a wreck and injures someone or damages property (other than your car), this type of coverage can help cover the costs. Liability insurance is required in every state, but the limits differ. Make sure your limit is adequate for your household.
• Bundling with home insurance. If you’re still suffering from sticker shock over the increase in your premium, there could be discounts unrelated to your teen. One of the most lucrative is the auto/home bundle, in which you buy home and auto insurance from the same carrier. Most providers offer savings of up to 20% for this combo. There could be other discounts as well that you’re not taking advantage of. Ask your agent to investigate.

Getting your teenager on the road doesn’t have to be scary. Communicate with your teen, teach him or her the rules of the road and be patient when he or she makes a mistake. You – and your teen – can survive this.

Source: AutoInsurance

For Cars, What’s the New Black?

“Any customer can have a car painted any color that he wants so long as it is black,” Henry Ford once said to potential customers of his new Model T. Today, more than 100 years after the model T was released, cars come in a rainbow of colors, and the most popular is no longer Henry Ford’s iconic black.

Myths abound about those colors – some insist that certain ones make you more likely to be involved in a wreck or make it more difficult for you to get insurance. But those are just myths. Here are some facts about your car’s color and how it affects your life.

Most popular car colors in 2013

Despite Mr. Ford’s penchant for black, modern consumers have opted for a much larger color spectrum throughout the years. Many still prefer neutrals. In fact, more drivers choose white, and they have for several years. Here’s a breakdown of color preferences:

Global

• White 22%
• Silver 20%
• Black 19%
• Grey 12%

North America

• White 21%
• Black 19%
• Silver 16%
• Grey 16%

Red car myth

Whenever you buy a car, new or used, at least one relative or friend will, without fail, recommend against the color red. “Red cars get pulled over more often, get into more accidents, and are harder to insure,” these well-meaning acquaintances will say, oblivious to the fact that the popular myth they are repeating has no statistical basis.

Insurance providers don’t ask the color of your vehicle. And if there were any truth to the myth, they’d know it and protect themselves against it.

There are many reasons why this misconception could have originated and gained steam. Many sports cars are red; statistically, sports car owners drive more aggressive and therefore are more likely to be involved in accidents. The correlation between tickets, accidents, and insurance costs has much more to do with the vehicle model, however, than with car color.

Another hypothesis is that red cars are easier for police to see and therefore more likely to be ticketed. The facts don’t support the notion. Drivers of red cars actually don’t get ticketed more often than they should.

A third conjecture about red cars is that the bright color affects drivers’ moods, inciting them to become more aggressive, passion-driven, and reckless. Theories abound about color psychology, but none of them have been statistically proven.

What car color says about you

Many people believe that your choice of car color reflects your personality. While some car color choices can’t be helped because of used car limitations, limited color options, and availability, it can be fun to think about what aspects of your personality are projected out onto your car.

Color theorist Leatrice Eisman shares some ideas:

• White: fastidious, kind, lives a simple and uncomplicated life
• Silver: elegant, cool, classy, even-tempered
• Black: empowered, not easily manipulated, loves elegance and appreciates classics
• Grey: sober, corporate, practical, pragmatic
• Red:  sexy, sensual, high-energy, dynamic, enthusiastic
• Gold: intelligent, warm, comfort-loving
• Light/Mid blue: cool, calm, faithful, quiet, patient
• Dark blue: credible, confident, dependable
• Taupe/ Light brown: timeless, basic, has simple tastes
• Deep brown: down to Earth, no-nonsense
• Dark green: traditional, trustworthy, well-balanced, cautious
• Bright yellow or green: trendy, whimsical, lively
• Orange: fun-loving, talkative, fickle
• Deep purple: creative, individualistic, original.

Buying a car can be overwhelming.  In the grand scheme of things, color matters very little, especially because it doesn’t affect your auto insurance.

Aspects you should consider before glancing at your potential car’s hue are the model’s safety ratings, brand and the location in which you’ll be driving. All of these aspects can affect your car insurance premiums and create unexpected costs.

When buying a car, it’s best to choose safety first; then you can let your true colors shine.

Source: AutoInsurance

Should You Buy Insurance from a Rental Car Agency?

The answer is complicated. Aren’t they always? Rental car companies make a lot of money selling insurance to customers, and they can be aggressive in pushing it. The National Association of Insurance Commissioners says that more than a third of customers buy coverage from the rental companies.

It’s coverage that some critics insist is often unnecessary, because many rentals are covered either by the customer’s auto insurance policy and/or by the credit card used to secure the car. They are correct about that, of course, but it’s important to know some things before you decline the car rental company’s coverage.

Many auto insurance policies do cover rental cars, at least under some circumstances. That being said, many isn’t all. That means you’ll need to check with your insurance agent to make sure whether you’re covered when you get a rental car. For example, you might not have collision coverage, the type you’d most likely need if you have an accident that’s your fault. You’d have to pay to repair the damage to the vehicle in that instance.

Even if your policy includes your rental car and you have collision coverage, you might not have protection if you’re using the car for business. Some carriers limit coverage for long-term rentals, while others don’t offer transactions in foreign companies.

There’s another potential problem, too. It’s called your deductible – the amount you have to pay before your coverage kicks in. You’ll still be on the hook for that.

So what about credit card coverage? In many cases, it is secondary to your auto coverage, which means you must file with your carrier first. Some cards cover damage to the car you’re renting but do not have liability coverage that would help with medical, repair and other expenses related to the other car involved in an accident.

Here is one final warning about declining coverage. Car rental companies have begun charging fees for vehicles damaged by customers. One is a “loss of use” fee, which is it will charge for each day the auto is being repaired. Your provider and credit card company might not pay this fee, which means you could be responsible for it.

The bottom line: Consider this decision long before you step up to the rental car counter. Talk with your insurance agent about your policy – some providers offer riders that will extend you more protection. You also should ask your credit card company for the details of your coverage. In many cases, there’s no right answer to this question. But be sure you’re comfortable with the decision you make.

Source: AutoInsurance

Not So Fast or Furious: America’s Most Popular Car to Steal

America loves its cars. Glamorous sports cars cruise across movie screens, stolen by villains and desperate heroes alike. Movies such as Gone in 60 Seconds or the Fast and Furious series make car theft seem cool, complicated, and interesting. The real-life world of vehicle theft is not so glamorous. You likely will be surprised by America’s most popularly stolen vehicle model (hint- it is nowhere near as beautiful as a BMW or a Mercedes).

The truth is, most vehicles stolen are not taken for their overall value as a whole; instead, they’re broken down for parts. This ensures that the more generic or standard sedans (the Hondas, Toyotas, and Fords) are the most popular with car thieves because their parts don’t change much from year to year. It is also easier to fly under the radar in a stolen Honda than in, for example, a stolen Mercedes or another luxury car.

The National Insurance Crime Bureau has identified the current most popular model with car thieves in the U.S. as – drumroll, please – the 1994 Honda Accord. The ’94 Accord’s current trade-in value is $975: Its original price in 1994 was $15,430, and the new car value in 2011 is $20,200. What makes this the ideal candidate for theft is that its parts are quite generic; a part from a 1994 Accord could be used for an Accord from 1995, 1996, and so on.

How car insurance fits into the equation

Theft can be covered under your auto insurance if you’ve opted for comprehensive coverage. Unfortunately, owners of these older, more generic models commonly don’t wish to pay for comprehensive auto insurance coverage to cover them, primarily because their deductible could be close to the value of the vehicle.

Without comprehensive coverage, these vehicle owners could run into further problems if their car is stolen, including not qualifying for rental car replacement while they are looking for a new car.

As if adding insult to injury, car thieves’ way of doing things ensures that they won’t encounter problems any time soon. This specific form of car thievery is virtually “recession-proof.” A recession forces more people to make the decision to repair their old cars rather than buy new ones, creating a greater need for parts, which thieves are all too happy to provide.

Know what’s in your policy

No matter what model vehicle you have, you should know what’s included in your auto insurance coverage and take proper precautions to secure your car. The best way to keep your car safe is to stay informed.

Source: AutoInsurance

Do You Really Need Collision and Comprehensive Insurance?

You’re on an auto insurance website, so you probably don’t expect this answer: maybe not. Most often, however, the decision might not be in your hands.

That’s because most lenders will require you to carry collision and comprehensive coverage as part of your auto insurance package. The reason is simple. Lenders want to protect their investment. They’ve loaned you the money to buy the car, and they want to make sure you’ll keep repaying that loan, and if you don’t they’ll have collateral to recover their costs.

A primer on auto insurance

Car insurance can get confusing. That’s because requirements differ across states. Every state requires you to carry liability coverage, though minimums vary widely. Many but not all states also mandate uninsured/underinsured coverage, and some also require you to have medical payments coverage.

What do these terms mean? Liability coverage protects you when you cause an accident resulting in property damage and injuries to someone other than yourself. Uninsured/underinsured coverage protects you if the person who caused the wreck doesn’t have enough or any insurance. Medical payments coverage helps pay for injuries sustained by people in your car.

So why do you need more coverage?

Go back to the liability coverage: It pays for damage to the other car when you’re at fault. That still leaves you with damage to your car. That’s where collision fits in. It will help pay for repairs – minus your deductible. Comprehensive coverage pays for other damage to your car — for example, if it is stolen, vandalized or damaged in a riot, earthquake or some other event. Again, you must first meet your deductible before you get help from this policy.

When you might not need these coverages

To repeat, most lenders will require you to have collision and comprehensive coverages as a condition of receiving a loan. But once you pay off your note, you won’t have to keep carrying it. You may still want to, however, particularly while the vehicle still has a lot of value.

However, once the car is more than 10 years old, its value may not be high enough to justify coverage. Remember, you have to pay the deductible first before you receive help from either of these protections.

Make your choice carefully, and talk it over with a licensed agent before you drop ANY car insurance coverage so that you’ll understand the risk you’ll be taking. If you fall under this situation, you could choose to do without collision coverage and save on your premiums.  But if you do, you might want to put any savings you reap toward starting a new car fund.

Source: AutoInsurance

How Will a Traffic Ticket Affect my Insurance Rates?

Getting pulled over on the highway is a quick way to punish your bank account. Even after dealing with expensive fines and court fees, traffic law violators often worry about seeing their insurance premiums spike after getting a ticket. Here’s what you can expect insurance-wise if you get written up for speeding or other traffic violations:

If you’re caught flying down the freeway

Every car insurance company has different rules and regulations when it comes to raising rates after a speeding ticket, but it generally depends on the amount of risk a driver consistently demonstrates on his record. For example, a first-time offender caught going 5-10 mph over the posted limit may receive a warning before any changes are made to his or her premiums, while repeat offenders caught speeding 15 mph or more over the limit may see their rates spike instantly without warning. If you’ve recently gotten a speeding ticket and aren’t sure if it has affected your insurance rates, contact your licensed agent.

If you double parked

Typically, insurance companies predict your risk by evaluating your history of moving violations on your driving record. Since parking tickets are “nonmoving” violations, they are typically not recorded in your driving record, and they do not directly affect your insurance rates in the same way a speeding ticket or other violation does.

However, drivers who ignore piles of parking tickets in their glove boxes could face very expensive consequences: In addition to hefty fines, failure to clear up these violations could result in the suspension of your license and even possible jail time. A license suspension will certainly show up on your driving record and would likely result in higher insurance premiums.

Other violations

If you’re pulled over for dangerous driving, you can likely expect big penalties from law enforcement in the form of points off your license, plus major adjustments in your insurance policy (read: sky-high premiums) in order to account for your higher risk of accidents. Driving while impaired, reckless driving, aggressive driving and committing a hit and run are all major marks on your record that will almost certainly give your insurance rates an unwanted boost.

The best practice to help prevent your insurance rates from becoming highway robbery is to simply slow down and obey traffic laws. The safer you are behind the wheel – and the fewer encounters you have with law enforcement – the easier you are to insure and the lower your car insurance premium is likely to be.

Source: AutoInsurance

Motorcycles – Ride Safe and Smart

Whether you took your first ride as a baby strapped to your mother’s back or you only recently discovered the joy of riding a motorcycle, chances are strong that you’re hooked. For the enthusiast, there is nothing quite like it. It may be the freedom and the power that lures you, or perhaps it’s the chance to take in each and every smell along the way in an olfactory ride like none other. Whatever attracts you to the ride, you shouldn’t take it without buying motorcycle insurance first.

You wouldn’t dream of leaving your home unprotected or even of taking the family car out for a spin with no coverage. Why would you do anything less for your beloved bike? How long would it take you to save up the money to replace it if anything happened to it? How would you be able to respond if you cause a wreck and someone else is seriously injured or their property is destroyed? You could be on the hook for big bucks to make things right again.

What’s in a typical motorcycle insurance policy?

Your standard motorcycle policy will offer coverage much like what you’ll find on your auto policy, such as:

Bodily Injury Liability
• Property Damage Liability
• Uninsured/Underinsured Motorist Property and Bodily Injury
• Medical Payments
• Comprehensive and Collision Coverage
• Towing & Storage

You can also buy additional coverage such as roadside assistance and Custom Parts and Equipment coverage. The latter is a must for those whose bikes have accessories such as custom paint jobs, expensive electronic equipment, or trailers which are pulled behind.

Protect the Driver, Too

Of course, if you don’t take steps to protect yourself, you might not be riding for long anyway. Follow these basic safety precautions so you can keep riding for a good, long time.

• Take a training course and get licensed: Make sure you know – and master – basic riding skills such as braking and cornering.
• Follow up with refresher courses every few years: As times change, new information becomes available.
• Know the limits of your own skills and those of your bike, and observe those limits.
• Drive defensively, following posted speed limits at all times.
• Stay sober: Don’t drink and drive.
• Always wear protective gear, especially a helmet that meets your state’s standards.

Know what you’re doing and make sure you and your bike are protected. It’s the best way to let go and enjoy the ride.

Source: AutoInsurance

How to Lease a Car without Ripping Your Hair out

When most folks go out to buy a car, they usually consider a new or used vehicle; they don’t even consider a third option: leasing. How do leases work? A lease is like a long-term rental, generally ranging from one to four years. You’ll pay a monthly fee and also maybe some money down at the time you sign your contract. At the end of your lease, you’ll have the option of purchasing the vehicle. If you put more money down at the time of signing, you won’t have to pay as much to buy your car for keeps when your contract expires. Depending on your lifestyle and finances, leasing just might be the best option for getting the car of your dreams at a price you can manage.

Is leasing right for you?

You’ve looked at used vehicles, but right now you feel like buying a used car would be a gamble. Used cars and trucks can generate costs over time due to repairs and maintenance. You’d much rather drive a vehicle that is likely to run smoothly for the next few years. With a new car, most of your cost is up front since you generally can count on needing fewer repairs for the first few years of ownership, though there will still be maintenance costs, of course.

While you want a new vehicle, you don’t want to pay as much as you would for full ownership. You’re also not entirely certain that the kind of vehicle that complements your current lifestyle will be suitable in a few years. For example, maybe right now you’re living alone, but you see yourself married with kids within the next five years and you don’t want to go through the hassle of selling your car and buying another one. Leasing allows you to drive a new car without making a forever commitment.

Choose the right car

Do your homework so that you can walk into a dealership full prepared. What kind of car do you want? Take into consideration size, safety and fuel efficiency before you start looking at price. Once you know which type of car is best for your situation, you can start researching various models. Look at comparable models from a variety of makers and always look at lease deals since they vary greatly from traditional purchase prices. When you find a model that appeals to you, call or visit a few dealers that sell the model, since different sellers offer different rates.

Keep in mind that when it comes to leasing, the cheapest model may not be the least expensive lease agreement. With leasing, dealers gain from leasing very popular models since they have high resale values and a greater chance of being resold. For example, it’s cheaper to lease a Corolla than a Yaris from Toyota, even though the Corolla is more expensive. Since dealers have an easier time reselling used Corollas, they’re able to offer cheaper leases on them than the Yaris.

Strike a deal

Be prepared to haggle with pushy sales agents, particularly if you’re young and female. Bring all the information you acquired during your research and a friend, partner or relative for support. If you’re young, dress maturely so you’ll be taken more seriously. When you arrive at the dealership, don’t appear too eager and stress that you want concrete price quotes immediately. Figure out your options for money down and monthly payments. More money down means smaller monthly payments, but if you don’t have that money on hand right now, you might want to haggle for less money down. If the salesperson is putting off giving you a quote or seems to be trying to take advantage of you, threaten to walk out. Disrespectful salespeople aren’t worth your time.

Leasing is a little complicated, but when you figure out the basics, it doesn’t have to be a nightmare. Do your homework, and you’ll be able to get a good deal and keep all of your hair follicles intact.

Source: AutoInsurance

Raising Your Deductible Could Become a Wrong Turn

In the quest to pay less for auto insurance, many people decide to increase their deductible. They’re right on one level. Increasing your deductible typically will lower the amount you pay for coverage. But it’s a move that is fraught with risk. It might not be the best strategy for cutting your bill.

To decide whether it is a tactic worth exploring, first you must understand how auto insurance rates are set. Here are some of the factors:

The types of coverage you want
Every state requires liability insurance, though minimum amounts of coverage differ widely by location. This protects you in case you cause an accident that injures someone else or damages property (including other vehicles). Many states require uninsured/underinsured motorist coverage as well. That protects you in case a motorist who does not have enough or any coverage causes an accident that affects you.

Collision and comprehensive coverages are always optional as far state requirements are concerned. However, lenders generally require both of these to protect their investment. Collision helps with repairs or replacement of your car if you cause an accident. Comprehensive provides assistance for incidents other than collision, including if your vehicle is stolen or vandalized.

The type of car you own
Obviously, if you have a new car, it’s going to cost more for your auto insurance than if you’re trying to squeeze the last few miles out of a bucket of bolts. And a sports car likely will cost more to cover than a sedan.

You
Here’s where it gets tricky. Your coverage depends in large part on you. Age matters: Younger drivers are going to pay more than experienced motorists. Gender plays a role, too, as men are considered higher risks than women.

Where and how much you drive also factor in to your premium. Rural drivers, in general, pay less than urban motorists. People who commute longer distances and drive more in general also are charged more.

Finally, your past will catch up with you. Your driving record figures heavily into the rate you’ll pay. If you’ve caused several accidents and triggered claims, you’ll pay more than someone who has been accident-free for years. Your credit record also is a major factor. Studies show that credit history reflects your responsibility as a driver. The better your record, the lower your rate is likely to be.

You might notice something about those factors: There isn’t, in many cases, much you can do to change them. You can buy a cheaper car, but your age, gender, location and driving and credit histories are what they are.

That’s where your deductible comes in: It’s something you can change. The deductible is the amount of a claim you’re responsible for paying. Setting it high will cut your premium, but it means you’ll have to come up with more money if a claim arises. That can be difficult for many people. The end result is you won’t have the coverage you’re counting on in case of a wreck or other incident.

There are better ways to reduce what you pay. One is to shop your coverage at least every year. While providers use many of the same factors to determine rates, they don’t value all the factors the same way. There can be considerable difference, particularly when you compare several providers to get their best prices.

The other way to reduce what you pay is by asking your provider about discounts. These price breaks vary greatly by state and carrier. However, some common discounts include the following:

1. Having anti-theft devices installed on your vehicle
2. Taking an accredited defensive driving course
3. Insuring more than one vehicle with the same provider
4. Buying auto and home insurance from the same carrier

You’re right to be concerned about your car insurance rate, and you’re correct in assuming that raising your deductible could lower your premium. However, it also could cause trouble for you if you’re in an accident and can’t come up with enough to cover it. Consider your options carefully, and see whether there could be a better way to pay less for the coverage you need.

Source: AutoInsurance

Don’t Get Caught in the Headlights With No Comprehensive Coverage

Hitting a deer is a scary, often traumatic – and expensive – event. According to the Insurance Institute for Highway Safety, deer-related accidents cause an estimated $1.1 billion in vehicle damage every year. However, if you’re protected with a smart auto insurance policy that includes comprehensive coverage, the resulting damage and other expenses are considered covered losses.

How am I covered?

When you opt to include comprehensive coverage and collision coverage in your auto insurance policy, you’re covered against a wide variety of unexpected accidents:

• Collision coverage offers financial support when your vehicle sustains damage by colliding with an object on the roadway. If you crash into another car, a barrier or if your car unintentionally rolls or flips and sustains damage, you can likely receive coverage for the repairs after meeting your deductible.
• Comprehensive coverage offers coverage for nearly everything other than collision. If your car is stolen, vandalized or struck by falling objects, or if it catches fire, the windshield shatters or you strike an animal – all you’re financially responsible for is the deductible. Your insurance carrier likely will cover the rest.

Note that if your vehicle makes contact with the deer, your insurance carrier will likely process your claim as a comprehensive loss. If you swerve to miss an animal and wreck your car, it will likely be processed as a collision loss.

Will my rates go up?

It depends on the specifics of your accident, but probably not. Hitting a deer or other animal that dashes out in the middle of the roadway without warning is far different from colliding with a tree or other static object. However, it is important to note that if your accident is processed as a collision claim, your rates are more likely to be impacted than if it is processed as a comprehensive accident.

How can I prevent hitting deer and other animals?

If a deer runs out in front of your car, unfortunately, there’s almost nothing you can do to prevent a collision. It’s likely safer to simply allow your vehicle to hit the animal as opposed to swerving to miss it. Jerking the wheel could cause you to drive right into oncoming traffic or run off the roadway and lose control of the vehicle. This puts you and others in much greater danger, and it could result in higher insurance rates later (because it could be processed as a higher-risk collision claim).

Here are a few tips for reducing your chances of encountering deer on the roadway:

• Don’t speed. You should have as much reaction time as possible should a deer dash into your path, plus it’s easier to see what’s on the side of the road if you’re traveling at slower speeds.
• Limit travel on roads surrounded by woods between dusk and dawn. Deer and other nocturnal animals are most active when your vision is most impaired.
• Use your high beams when possible, especially in areas known for having a higher deer population.
• Keep your eyes peeled for deer crossings and use your peripheral vision to spot shiny yellow dots looking in your direction (deer have highly reflective eyes that are easy to see at night). If you see one deer on the side of the road, be prepared to encounter others.

It’s much smarter to play it safe, drive slowly and never try to swerve to avoid missing a deer or other animal on the roadway. As long as you’re covered with comprehensive and collision insurance, you can let your policy be the hero.

Source: AutoInsurance

How to Get Your Car Ready for Spring

You might still have to scrape a little ice from your windshield for the next month or so (depending on where you live), but for the most part you’re done with winter. So is your automobile. So what steps should you take to make sure your car is ready for the new season?

Here are a few suggestions to consider as the calendar continues to turn away from a dreary winter:

That’s why they call it spring cleaning

It has been a long, rainy, slushy, generally just yucky winter. Chances are you’ve traveled over a salted road or two. That means your car could use a good cleaning, inside and out. Start by collecting all the trash you’ve accumulated. Vacuum the car to get any food crumbs and dirt out. Take out the floor mats and wash them thoroughly. Use window cleaner on your windows, but don’t spray it directly on the glass – you’ll risk streaking. The better way is to spray onto your cloth, then wipe the windows clean.
The outside needs washing, too. Don’t just run it though the carwash at the gas station. Really clean it yourself, paying particular attention to the undercarriage, where you could have an accumulation of salt and chemicals sprayed on roads. Use a specialty carwash soap so you won’t damage your paint job, and use a soft, clean towel to dry the car once you’re finished. Clean the outside of your windows the same way you did the inside.

Wax on, wax off

You’re not trying to learn karate, but you should still wax your car. Why? It will make your paint job last much longer, not to mention shine. Speaking of shining, move out of direct sunlight before you begin. Use whichever kind of wax you prefer: liquid, paste or spray. All have distinct advantages and disadvantages, so it comes down to personal preference. Remember, the protection from most wax jobs only lasts about five weeks – maybe less.

Maintenance

Finally, go into the new season with all your vehicle maintenance up to date. Some car owners can do some or all of these items; others want the assurance that a professional has done the job. At a minimum, you should perform the following steps:

• An oil change. You should be doing these every 3,000 miles or so anyway to extend the life of your engine. If you can’t remember your last one, you should schedule one now and get them done every time the seasons change. While you’re at it, make sure all fluids and filters are checked.
• Rotate your tires. This will greatly extend the life of your tires. Have them rotated regularly. While you’re at it, this is a good time to have your brakes examined for wear. Also, you check the air pressure in your tires – the change in temperatures can affect it.
• Check your windshield wipers. Snow and ice can tear up your wipers. Make sure they’re still clearing your windows.
• More things to check. Have an expert examine your belts and hoses and test your battery. Get help from a friend and make sure all your headlights, tail lights and brake lights are working.

Your car is one of your largest investments, so you need to do regular maintenance on it. Spring is a good time to start everything anew, so make sure you’re doing everything possible to get the most out of your vehicle.

Source: AutoInsurance

Coverage In Other Countries: Can I Drive Outside the U.S.?

Whether you’re driving across the border or plan to rent a car once you reach your destination, there are a few things you need to know before getting behind the wheel on foreign soil.

Driving In Mexico

Your auto insurance coverage likely will not travel with you to Mexico – most policies issued in the USA or Canada won’t be recognized by Mexican authorities, and penalties for driving uninsured can be severe. If you get into an accident and are unable to prove you have valid coverage, your car could be impounded and you could even be arrested.

Here’s what you need if you plan to drive south of the border:

• Invest in a valid auto insurance policy from an insurer in Mexico. Some experts recommend purchasing enough liability to help cover you in case you cause an accident, plus coverage for bail in case you are detained until fault is determined. Additionally, it’s a good idea to purchase some collision and comprehensive insurance in case your car is damaged outside the U.S.
• Apply for an International Driver’s Permit at least six months in advance, and remember also to carry your U.S. driver’s license.
• If you are driving your own car outside the Border Zone or the Free Trade Zone, you also must acquire a Temporary Import Permit at the border in order to prove you will not leave your vehicle in Mexico illegally.

Talk to a licensed agent, and make sure you understand your coverages and the consequences of driving uninsured before you cross the border.

Driving In Canada

It’s a little easier to take your car across the northern border to Niagara Falls or to visit Vancouver. U.S. driver’s licenses are valid in Canada, and most U.S. auto insurance policies are also accepted as long as the insured is a tourist in Canada. Before you cross the border, all you have to do is request a Canadian insurance card from your U.S. carrier, and you can typically count on coverage. Make sure to discuss your trip with a licensed agent in order to go over the fine print and meet all legal requirements before you leave.

Better safe than sorry

Many American tourists assume they’ve got coverage either from their U.S. insurance carrier, their credit card company or their rental car company when they get behind the wheel on foreign soil. However, you should always speak to a licensed expert to find out exactly what you can expect, even if you’re just taking a brief day trip.

Source: AutoInsurance

Anatomy of a Wreck: What Not to Do

Everyone lives this reality. Wrecks happen, and they happen often. Consider the following case:

It takes about five minutes for Jordan to get from her front door to the frozen food selection on Aisle 5 of the local grocery store. However, it only took about 10 seconds one afternoon on an emergency milk run to completely total her car. About a mile and a half away from the store, she was T-boned on the driver’s side of her VW Jetta by a rogue tracking missile, manufactured by Buick.

She was making a left turn out of a neighborhood onto a main road at the same time a little old manwas decided to attempt a U-turn across the median. The thing is, he didn’t decide to make this U-turn until Jordan was halfway into the left lane. His Buick LeSabre turned like an automated drone and came crashing into Jordan before she even knew what hit her.

For her part, Jordan had no idea what had just happened. One second she was pulling out into the empty road after this little old man rolled by, and the next she was being attacked by a Buick. How could he not have seen her?

Both drivers got out of their cars. Jordan, despite her anger at the situation, calmly asked the man if he was alright. Fortunately, he was, and Jordan was, too. However, a line of cars had already started to form around the wreck, so the drivers decided to move the cars out of the way.

That was a bad idea. Why? Once they moved the cars, there was no way to prove what had happened. Based solely on the damage to both vehicles, it looked as though Jordan had simply pulled out in front of him as he was traveling in the right lane. Because there were no other witnesses (and the story of a boomerang Buick seemed ridiculous), the actual damage was the only proof police had to file a report. Therefore, Jordan was found at fault.

Fortunately, she had the foresight to invest in a smart car insurance policy that included collision coverage. However, as she repeated her story to her insurance agent, customer service reps and the adjuster, she kept hearing the same response: Why didn’t you take photos?

Rest assured, she learned her lesson. Rather than immediately moving out of traffic after an accident, drivers should follow a few important steps in order to ensure that authorities and insurance companies get the information they need to make a fair judgment.

If a rogue Buick crashes into you:

• Take a deep breath, turn on your hazards and calmly exit the vehicle.
• Check yourself and other passengers for injuries.
• Ask the other party if everyone is OK.
• Call an ambulance if necessary and notify police.
• Take pictures of damage to BOTH cars, the location and any injuries sustained.
• Move the cars safely out of traffic if they are blocking the road.
• Make notes of the names of everyone involved, including any witnesses.
• File a report with the police, and then immediately contact your insurance agent to start the process of filing a claim.

Even though nearly everyone has cameras on their phones these days, it’s not a bad idea to keep a disposable camera in your glove box in addition to your insurance information, orange cones and pens and paper.

Take it from Jordan, an accident can happen anytime, anywhere, and it only takes a couple of seconds. Make sure you’re always prepared, and record the facts so you won’t get blamed for an accident that’s not your fault.

Source: AutoInsurance

Seven Ways to Stay Safe from Carjackers

The holidays should be all about “comfort and joy,” not fear. But in the days just before and after Christmas, desperate criminals know that motorists have money and expensive gifts in their automobiles. That makes every vehicle a potential target for carjackers.

However, staying alert and following a few simple tips can help to safeguard you, your loved ones and your stuff from criminals. Consider these seven ways to keep safe:

• Watch where you park. Especially when shopping, park in a well-lit part of the parking lot. Try not to be too isolated. Finally, remember where you park. If you have to search for your vehicle, you might forget to monitor your surroundings for suspicious people.
• Keep car keys in a different place than your house keys. Remember, if your car stolen, your registration will list your home address. You don’t want the criminal also to have your house keys.
• Avoid dark, lonely roads. The more traffic around, the better chance you’ll have of getting help. The criminal likely won’t try anything if there are witnesses around.
• Lock your car doors and keep the windows up. It’s easier to unlock them to let a friend or family member in than to quickly reach for the lock in an emergency.
• Keep your distance. When you pull up to a stoplight or stop sign or even are briefly stopped in traffic, leave at least half a car length between you and the vehicle ahead. This will allow you to pull around that car should there be trouble.
• Be prepared. Make sure you have emergency numbers programmed in your cellphone, and have it ready should anyone approach. Just the sight of you with the cellphone might scare some criminals off.
• Know when to surrender. No car is worth your life or that of a family member. If worst comes to worst, let the carjacker have the vehicle. Don’t worry about your stuff. If there is a small child in the backseat, make sure the carjacker knows and try to get the child out.

Taking these steps won’t guarantee your safety. But they will make it much harder for the carjacker and could cause him to look elsewhere for a victim.

Source: AutoInsurance

15 Do’s and Don’ts For Saving on Car Insurance

If your monthly payments rise and fall more often than the Dow Jones industrial average, it may be time to revisit some of these common car insurance do’s and don’ts:

1. Don’t get a ticket – A speeding ticket can increase your car insurance rates as much as 15%, and if you’re ticketed for reckless driving or driving under the influence, you can probably expect to see your rates spike by at least 20%. First-time offenders may get off easy with just a warning, but the smartest practice is simply to drive safely and avoid seeing those blue lights in your rear-view altogether.
2. Don’t drive a flashy car – Insurance companies much prefer safety over showy, and a brand new sports car, regardless of its color, will obviously cost more to insure than a used minivan. The less likely you are to go for a spin at whirlwind speeds on the freeway, the lower your car insurance rates are likely to be.
3. Do wear your seatbelt – If you’re caught driving without a seatbelt in some states, you could face monstrous fines and see your car insurance rates go up as much as 3%.
4. Don’t get into an accident – Easier said than done, we know. But it’s important to remember, according to the Insurance Services Office, many providers follow a standard practice of increasing a policyholder’s rates by 20-40% of his or her base rate after an accident (although first-time offenders may get a warning).
5. Do report accidents – Even if you just get into one small fender-bender, failing to report an accident to your auto insurance company could result in the cancellation of your policy.
6. Do take a defensive driving course – Some car insurance companies will cut your rates by 10% if you can prove you’ve taken and passed an accredited defensive driving course. Plus, it’s an excellent way to help you avoid accidents and other claims down the road.
7. Do install anti-theft and safety features – According to the FBI, a car is stolen in the U.S. every 42 seconds. Rather than falling victim to this statistic, install a car alarm to help prevent theft and lower your rates. Airbags and automatic seatbelts also could help you save.
8. Don’t take regular cross-country road trips – In addition to depreciating your car’s value, a high mileage number could cause your car insurance rates to spike. The less time you spend on the road, the less likely you could be involved in an accident and the lower your rates are likely to be.
9. Do keep up a favorable credit score – Your credit score is closely tied to your insurance score, which is a big factor in determining your rates. Pay off those overdue bills and build up your credit score to help keep your insurance rates under control.
10. Do get married – While single life has its perks, many car insurance companies offer lower rates for married couples. (Although this probably shouldn’t be your only reason to say “I do.”)
11. Don’t fail algebra – Teenage drivers can qualify for “Good Student Discounts” by bringing home A’s and B’s on their report cards.
12. Don’t take the first deal you find – Smart shoppers know the best way to get a great deal on car insurance is to compare multiple quotes from different companies and explore your options when it comes to coverage and rates.
13. Don’t get complacent – Update your policy every once and a while to make sure you’re not overpaying for coverage you don’t need. If you’re paying new-car rates on a 10-year-old car – ask your agent to do that math again. Consider whether you need to have collision and comprehensive coverage.
14. Do bundle your policies – Purchase your auto insurance and your home insurance policy from the same provider, and you could qualify for savings of up to 20%. Many companies also offer multi-car discounts for customers who trust one provider to cover every car in the family.
15. Do call an agent – You might never know which big discounts you’re missing or which features of your policy are out-of-date unless you go over the details with a licensed expert.

Source: AutoInsurance

What to do if Your Car Battery Dies

Of course it happens on a day when you’re struggling to leave the house on time to get to work. You turn the key, and nothing happens. Your battery is dead. What do you do now?

First off, don’t panic. You can get back on the road quickly enough if you have a friend or find a good Samaritan with a car handy and one of you has jumper cables. It’s an easy, quick process, but it does have steps that need to be addressed in the proper order.

Here’s how you do it:

• Pop the hood and see what side your battery is on. This is important because you’ll need to get the other car parked close enough so that the cables will stretch between the batteries. Once you’ve lined the cars up, make sure to shut the ignition off in both and put them in park.
• Attach one of the red jumper clips to the positive terminal of your dead battery. Then attach the other red clip to the positive terminal of the good battery. Take the black clip that goes with the second red clip and hook it to the negative terminal of the good battery.
• Take the remaining black clip and attach it to an unpainted metal surface on your car that isn’t near the battery. DO NOT attach the remaining black clip to the negative terminal of your dead battery; there could be sparks and possibly even an explosion.
• Start the car with the good battery and let it run for two or three minutes. Now try to start your car. If nothing happens, check all the connections and try again.

If it does start, remove the jumper cables in reverse order: Take the black one from your car, the black one from the other car, the red one from the other car and the red one from your car. Don’t let the clips touch during this process.

One note: Once your car starts, keep it running. Drive for at least 20 minutes to give the battery time to recharge. If it doesn’t start the next time you use it and you’ve checked all the connections, your battery may be bad. Take it to an auto-parts store or a repair shop and they’ll test it, usually for free. If your battery isn’t shot, you could have a bad starter or alternator.

Source: AutoInsurance

So You Damaged Your Rental Car

You have everything planned for your family’s vacation. Flights and hotels are booked and suitcases packed, but are you prepared to rent a car? Flustered travelers often become confused about insurance coverage at the counter. It is better to know more before you leave.

Before you rent

If you’re renting a car during your vacation, make sure you understand your insurance coverage before you leave. The Insurance Information Institute (III) recommends that you make two pre-trip calls:

• Call your auto insurance carrier. Determine what’s included in your auto coverage; in many cases, that coverage applies to a rental. Additionally, determine what your auto insurance company will pay in additional costs such as administrative or towing fees. Typical collision and comprehensive coverage might pay for these, but make sure you’re covered.
• Call your credit card company. Credit cards often offer insurance coverage for rental cars, but their protection often only extends to damage to or loss of the rented vehicle and not to personal liability or belongings.

Deals over the counter

The rental company will push additional rental insurance to supplement your regular car and credit card insurance coverage. These options may include a loss damage waiver, additional liability insurance, personal accident insurance, and personal effects coverage.

If you feel your typical insurance is inadequate or you don’t want to risk the hassle of a claim down the road, you should consider one or more of these rental insurance add-ons.

Returning the goods

When you’re ready to head home, make sure to budget some extra time before you leave to spend at the rental car return. It may be inconvenient, but it could cost you if you don’t. It’s a good idea to take the following steps:

• Snap some photos: Get as many photos of the vehicle’s interior and exterior as possible. Note any dings, dents, or scratches. Pay special attention to the car’s windshield, as windshield damage is the most common source of rental claims.
• Talk to someone: Ask an employee of the rental car company to accompany you on a complete evaluation of the vehicle. If everything checks out, have the employee sign the form or give you written confirmation. If no one’s available to inspect the vehicle with you, ask for the name and email of the branch manager and send a message containing the photos you’ve taken.
• Save your documents: Keep your documents and photos for at least six months. It can take the rental company that long to file a claim.

It’s only a scratch

If you damage a vehicle or get caught breaking a traffic law, the process isn’t so simple.

• Smile! You’re on traffic cameras: If you committed a moving violation (i.e. ran a red light), there’s not much you can do. The rental company will forward you the paperwork and probably send you the photos that establish your guilt.
• You know you did it: If you discover a ding or scratch that wasn’t there before, you will probably be liable for damages. When you return the vehicle, you will fill out a claim form to acknowledge the damage and agree to pay for it. If you bought the rental company’s insurance, you are done after this step. Remember, even if it wasn’t your fault, you pay for the damage the car sustains during your rental period.
• They know you did it: If the company discovers damage to the car after you return it, they will send you notification of the damage and ask for your insurance or credit card information. The rental company will then send you an estimate of repair costs and additional fees. Most often these fees include loss of use – you’ll be asked to reimburse the rental company for earnings the company didn’t make while the car is being repaired – and diminishment of value. If you have collision and comprehensive coverage, your policy might cover these fees.
• You know you didn’t do it: When disputing a claim, the more you have in writing, the better. First, send a letter to the company explaining that the damage was not sustained during your rental period. Then, send a more strongly worded email, copying your auto insurance company and attaching any photos you have.
• Signs it’s a scam: If the rental company sends you an unexpected claim that is almost $500 (the average deductible amount), it could be a sign that it doesn’t want your insurance company investigating. Other signs of a scam are claims for normal maintenance or damage to parts of the cars that you don’t normally see.

Most rental car companies wouldn’t dream of accusing you unfairly. But it’s a good idea to play defense right from the start to make sure you’re not saddled with repair costs that shouldn’t be your responsibility.

Source: AutoInsurance

My Son Got a Speeding Ticket – What Now?

That’s an all-too-common comment from parents insuring a teen driver. Most already are pretty outraged at what happened to their policies once they added their son or daughter to it. The prospect of even higher rates really slaps them in the face.

The answer, of course, differs according to the circumstances of the ticket. It also varies from state to state. There will be a fine, most likely, and your son also will have to pay court costs. Some states also impose a surcharge onto speeding tickets.

But the quick answer is that it could affect his – and by extension, your – insurance premiums for the next three years. And by the way, young drivers are grouped as teenagers by most carriers until they hit the age of 23. Typically, the increase can be up to about 25% the first year, then gradually declining and going away if there are no further violations within the three-year period.

What can the teen do about it? Have him check with the clerk of court in the jurisdiction in which he received the ticket. He could be eligible for traffic school or some sort of deferment program. Traffic school could cost your teen a full Saturday – and heaven forbid he’ll be bored by the proceedings – but it could prevent the ticket from affecting your auto insurance. One thing to tell your teen: In most states, he’ll only be allowed to take the course once every 18 months.

How likely is a ticket?

Chances are you’re frustrated with your teen? But you might want to give him a break. More than 100,000 speeding tickets are written every day – about one in six drivers gets a ticket during any particular year.

The average direct cost of a ticket is $150; the average insurance increase over the three-year period is $900. Now consider the other potential cost of speeding: Nearly 40% of teen motor vehicle deaths involve speeding.

One final note: If you’re facing a huge increase in premiums, it might be a good time to shop your auto insurance. Some websites, including this one, offer multiple quotes from A-rated insurance carriers. That can help you get the lowest rate for your coverage. Be sure to ask about any discounts that may be available as well. Again, discounts vary greatly by provider and state.

If nothing works and your premium is set to skyrocket, you could consider increasing the deductible on your policy. Take great caution, however, when you choose this path. It means you’ll have a larger out-of-pocket cost should you have an accident. Make sure you’ll have the cash on hand should something happen.

Source: AutoInsurance