Category: Auto

With news of recent car recalls reverberating throughout the automotive world, auto owners are scrambling to make sure that their cars are safe. The recalls are serving as an eye-opener to many, and those folks are recognizing that now is the perfect time to re-evaluate an old auto insurance policy and to make sure that it is still providing positive value. Whether an accident occurs as a result of some sort of mechanical failure or due to a bad decision, the proper insurance policy will help drivers stay afloat even with a difficult situation.

Prior to renewing any existing policy, examine your current situation and figure out exactly what your needs might be in the near future. The times are changing and change has become a certain reality for many individuals. If you are moving in the near future, changing jobs, or doing something else that might impact your driving, then you’ll need to evaluate your options. Additionally, many people are seeing changes to their current policy because of either adding or removing a child from their policy.

With or without a major life change, it’s important to take a look at your own situation every year. Don’t just renew the policy because it is easy or convenient. Often, there is a better deal available, if you just take the time to look.

The key to cost cutting

This can be done in a number of different ways. Some people cut insurance costs by picking up discounts for safe driving and for driving less. Others cut costs by shopping around and finding a lower cost insurer. Others keep their costs low by choosing a car that warrants a lower insurance premium. These things are all important, and they are factored into the equation when insurance companies calculate your premiums.

Searching for the right provider

Today’s insurance industry is fierce, and this is a positive for you. The more competition there is, the more likely you will be to get both a good deal and acceptable terms. When shopping around for insurance, understand that while a few carriers dominate the market those are not your only choices. Certainly rates should play a major part in your decision, but you should also consider customer service when evaluating offerings.

There are so many auto insurance options available today that finding a solid combination of good rates and excellent service shouldn’t be too big of an issue.

If you’re like countless other consumers across the nation, you’re probably pinching some serious pennies right now. In these tough economic times, everyone is searching for creative ways to save a few bucks. Here’s one way to hang onto your dollars: consider walking to work or the store instead of driving. Not only will you save on gas and get some exercise-you also may qualify for a valuable discount on your car insurance.

Drive less, save more

Many insurers offer what’s called a “drive less, pay less” plan for drivers who rack up lower than average mileage on their cars each year. Depending on your insurance company, you could save up to 18 percent if you drive less than 7,500 miles a year. However, these plans are available only in certain states. If you’re looking to beef up your wallet, ask your insurer if you may be eligible for this low-cost coverage.

How does it work?

The “drive less, pay less” plan varies with each insurance company. While some insurers will take your word for it on how many miles you drive each year, others require proof.

Then there are those insurers who offer even greater discounts-but they closely monitor their drivers. For example, at least one insurer requires an OnStar subscription to be on the drive less plan. Although an OnStar subscription costs about $19 a month, you could save as much as 54 percent on your car insurance if you drive less than 15,000 miles a year under this plan. If you conduct a quick cost benefit analysis, you may find it’s well worth the extra $19 a month.

Another insurer offers an option to install a small, wireless device in your car to monitor your mileage as well as your driving habits. While it may be a little strange to know that “Big Brother” is always watching, you could save loads of cash with this plan.

Pay-As-You-Drive (PAYD)

Another low-cost car insurance plan that’s gained a lot of attention in the past year is Pay-As-You-Drive (PAYD). According to the Brookings Institution, PAYD can save consumers an average $270 per vehicle. However, while PAYD is popular overseas, it is not widely available in the U.S..

The Brookings Institution also points out the PAYD could save taxpayers up to $50 billion a year. If more drivers enrolled in this type of car insurance plan, everyone would drive considerably fewer miles. That would translate into fewer cars on the road each day, which cuts down on traffic congestion, car accidents, traffic related hospitalizations and emergency services-all things that cost taxpayers loads of money.

Green-friendly car insurance

Not only are these drive less, pay less car insurance plans good for your pocketbook-they’re also better for the environment.  Some experts say if PAYD were offered in all 50 states, it could reduce total U.S. greenhouse gas emissions by 2 percent. That adds up to a monstrous 99 million tons of CO2 per year.

If you want to steer clear of overpriced car insurance, ask your insurer if they offer a “drive less, pay less” plan. If not, you may consider switching to a company that does offer these low-cost plans.

When your car gets damaged in an accident or stolen, the repair or recovery cost is only part of the story. Going without one while your car is being repaired can be a significant hardship. Without another vehicle available, your only recourse may be to rent one. The good news is that you may be able to buy insurance that will pay some of the cost of a rental; in fact, your policy may already include it.

The standard Personal Auto Policy includes a coverage called Transportation Expenses. If you have purchased Collision coverage on your car and that car is damaged in a collision, this coverage will pay for “temporary transportation expenses.” The same applies if you have purchased Comprehensive coverage; if the car is damaged by something other than a collision, the policy will cover these expenses. The policy pays up to $20 per day, up to a maximum of $600. This coverage also applies to a vehicle to which you do not ordinarily have access, such as a friend’s car or a rented pickup truck.

Time limitations apply. If your owned or borrowed car is stolen, coverage begins 48 hours after the theft and ends when you are able to use the vehicle again or when the insurance company pays you for the loss. If the cause of loss is something other than theft, the insurance pays the expenses incurred more than 24 hours after you lose use of the vehicle. Finally, the insurance stops paying at the end of the period of time reasonably required to repair or replace the vehicle.

Some examples will illustrate how this works.

• John has both Comprehensive and Collision coverages on his sedan. On Tuesday at 10 AM, a frayed wire in the engine catches fire, resulting in major damage to the car. The car is in the shop for 15 days, so he rents a replacement for $35 per day. His insurance will pay $20 per day, starting with the expenses he incurs after 10 AM on Wednesday. If 15 days is a reasonable time for these repairs, the company will pay for days 2 through 15.
• John gets his sedan back. A month later, it breaks down. This time, he borrows his neighbor’s car. While he is driving this car, a deer runs in front of him; the ensuing collision badly damages the car. Because he has Comprehensive coverage, which applies to collisions with animals, his insurance again will pay $20 a day for him to rent a replacement while the shop fixes his car.
• He gets both cars back and returns his neighbor’s car. A week later, he walks out of a store to find an empty space where his car should have been. He reports the theft to the police and his insurance company. The company will pay $20 per day, starting 48 hours after he discovered the car missing. It takes 35 days for him to find a replacement car; his insurance pays $600 (the maximum) for his rental costs.
• Concerned about how much his insurance premiums will go up, he drops the Collision coverage on the replacement car. A month later, a bee stings him while he’s driving and he plows into a highway sign. This time, the company will not cover his rental costs because he had not purchased Collision coverage.

Not all auto insurance policies are the same. Some may pay more than $20 per day for rental costs, but they will pay only if the insured vehicle is stolen. Others cover theft only and pay less than $20. Check with your insurance agent to find out what coverage you have. If it’s not what you would like, ask the agent if you can purchase additional coverage.

To drive legally all drivers in the United States must carry some form of car insurance. For many people, one of the most confusing aspects of car insurance is understanding how their rates are determined.

The first factor that goes into determining your car insurance rate is the level of coverage you receive. In most states, liability car insurance is the only required form of insurance. However, this insurance does not cover you fully in the event that you are hit by an uninsured motorist, if your car is stolen, or if you car is vandalized. To have these incidents covered, you will need to have collision and comprehensive coverage. To have these levels of coverage, you will pay more than someone would pay if they only had liability.

The second factor that goes into determining your rate is your driving history. For starters, records have shown that younger and inexperienced drivers are far more likely to be involved in an accident than more seasoned drivers. Because of this, drivers that are under the age of 25 will always have a higher rate than older drivers. For people of all ages, driving history also has a large impact on car insurance rates. An individual who has multiple at fault accidents, moving violations, or driving related arrests on their driving record will pay more for insurance than someone who has a clean record. Most negative marks on your driving record will clear up after about 5 years.

Another factor that goes into determining your car insurance rate is the type of car that is being driven. All insurance carriers have information that shows the rate of accident, theft, and damage for every make and model of car. Cars that are more likely to be stolen or involved in accidents will result in higher insurance rates. Furthermore, cars that are worth more money and more expensive for the insurer to repair or replace will have higher rates.

The location of your residence is another factor that goes into determining your rate. Cars that are stored in areas that have high rates of crime, accidents, or automobile theft will come with high rates. Furthermore, if you car is parked on the street or in an unsecured spot, your rate will be higher than if the car was parked in a secured garage. The location is also important because those who drive further to get to work will spend more time behind the wheel which increases their chance of having an accident.

Surprisingly, a driver’s credit score and marital status are also factors that go into determining a car insurance rate. Both of these factors have been historically correlated with higher rates of insurance claims being filed. People that are married or have better credit historically are cheaper to insure than single people with bad credit.

If you live in an urban area, owning a car can be both expensive and a hassle. Finding a parking spot may rival finding Osama Bin Laden in its difficulty. Paying for parking can leave a major hole in your wallet. Due to the sheer number of drivers on the road, insurance costs tend to be higher in large cities. Fuel economy suffers during city driving because of the relatively slow speeds and frequent stops. Consequently, many city dwellers are saying no to car ownership and relying on alternatives. Mass transit remains an essential option, but a relatively new idea is taking hold in U.S. cities: car sharing.

According to CarSharing.net, at the beginning of 2010 there were 27 car sharing programs in the U.S., serving 388,000 members and sharing 7,500 vehicles. They go by names like Zipcar, Car2go, City CarShare, and Community Car. The programs charge an annual membership fee and may charge an application fee; Zipcar, for example charges a $50 annual fee and a $25 application fee in the Washington, D.C. area. A separate fee applies for each use of a car (for example, $30 for a four-hour reservation), which covers gas, insurance, and a specified number of miles. When a member needs a car, she reserves one by phone or online; the program directs her to a parking spot where she will find the car. She unlocks the car (Zipcar issues a “zipcard” to members, allowing them to unlock the vehicle by holding the card up to the windshield); the keys are inside. She uses the car and returns it to a designated parking spot by the end of her reservation time.

The types of people likely to use a car sharing service include:

• Those who normally use public transportation but who need their own vehicle on occasion
• Those who own one car and occasionally need a second
• Those who own cars but occasionally need a larger vehicle
• Those who can’t afford to buy a car but can afford the membership fees
• Those who want to avoid the inconvenient parts of car ownership, such as maintenance, fees, and storage costs
• Environmentalists concerned about the pollution that comes with car ownership

A person using a car sharing service takes risks similar to those she would take while renting a car. She may incur legal liability for injuring someone or damaging another’s property while using the car. She may suffer injuries in an accident, resulting in medical expenses and lost income. She may damage the vehicle and become responsible for repair costs. The car sharing service provides liability insurance, but the borrower has no guarantee that the amount of insurance will be enough to cover all the damages. Also, that insurance may not apply if she lets an unauthorized person drive, such as a “designated driver” during a night on the town. If she does not own a car, she may want to buy a named nonowner auto insurance policy, which will cover liability, medical, and uninsured or underinsured motorist losses over and above what the car sharing service’s policy provides. Also, certain umbrella liability policies may cover damage to a borrowed vehicle if the car sharing service’s policy does not pay. A professional insurance agent can identify insurance companies that offer these types of coverages and explain the differences in coverage and cost of the various policies.

For people living in areas where it is available, car sharing may be a very sensible alternative to owning a car. Like any special service, it carries certain risks. However, by making some simple arrangements ahead of time, drivers can take advantage of these services and be confident that they’ve limited their financial risks.

One Saturday, Jenny stopped by the mall for some afternoon shopping. The parking lot was packed, but she found a space at the very back of the lot. After she ate some lunch and shopped for a few hours, Jenny strolled back to her car—only to find that her passenger window was broken, and her laptop and iPod were missing. Her heart plummeted into her stomach, and she wasn’t sure what to do.

If you’ve ever walked into a parking lot or your own driveway to discover a thief has broken into your car, you’re probably all too familiar with that terrible sinking feeling. Fortunately, there are some steps you can take to stop car robbers in their tracks. These criminals go for the simple jobs, so they usually choose vehicles that are parked in remote areas and have valuables in plain view.

Don’t make yourself an easy target. Follow these five easy tips to steer clear of car break-ins:

Tip #1: Choose your parking spot carefully.

Car thieves generally target vehicles that are parked in remote areas so they don’t run the risk of getting caught red-handed. That’s why you should always park in a busy, well-lit area where your car is easily seen from the store or restaurant. Try to avoid parking between two larger vehicles or up against bushes, dumpsters or fences.

Tip #2: Hide your loot.

If you were to peer into your car windows right now, what would you see? A hand-held GPS attached to the windshield? An iPod plugged into your radio? A camera on the passenger seat? A laptop in the floorboard?

If so, you’ve made yourself an easy target for car thieves. Car robbers would be salivating over a car with so many treasures in plain view. That’s why you should hide all of your electronics, shopping bags and valuables under the seats or lock them in the trunk—or better yet take them into the store with you!

Tip #3: Lock the doors and roll up the windows.

This may seem like a no-brainer—but police departments across the nation receive countless reports every year from drivers who have items stolen from their unlocked cars. Even if you’re just running into the store for a minute to pay for gas or pick up your pizza, you should always roll up the windows and lock the door. (If you like to take your dog for rides, have an extra key made. That way, you can roll up the windows and keep the air conditioning on for your pup while you run into the store with your second key.)

Tip #4:  Don’t store your home address in your GPS.

You’ve probably heard the horror stories or read the elaborate sensationalized email forwards about car thieves who steal GPS devices from cars. Once they snatch the device, they find the driver’s address stored under “Home.” They then rush to the house and clear out the place.

Although it sounds like the stuff of urban legends, this has actually happened to some drivers. And it’s entirely possible that this kind of thing could happen again. That’s why you should not store your home address in your GPS device. Instead, store the address of a nearby intersection or even your neighborhood grocery store under “Home.” Better yet, take your hand-held GPS device with you instead of leaving it in the car.

Tip #5: Install a car alarm.

The last thing a car thief wants to do is draw attention to himself. That’s why car alarms are so effective. If your car starts beeping and wailing as soon as they try to break into it, they won’t stick around for very long. Many car alarm systems also come with a “panic button” for your key fob—which could come in handy if a suspicious stranger approaches you while you’re entering your car.

When it comes to protecting your car from break-ins, an ounce of prevention is worth a pound of cure. Take these five simple steps, and you’ll be much less likely to become a car thief target. If a thief does break into your car, report the theft to your local police department immediately.

When it comes to auto insurance policies, there are countless options on the market. However, not all policies are created equal. While you may be tempted to buy the insurance policy with the lowest price tag, this choice could end up costing you untold amounts of money in the long-run.

It’s extremely important to read the fine print and understand the differences between the various auto insurance options available to you. Here are a few tips for choosing the best policy:

Know your limits

Some auto insurance policies are quoted with extremely low limits, leaving their policyholders dangerously under-insured. In some states, the recommended liability limits are as low as $25,000. This meager amount often doesn’t come close to the actual worth of the policyholder. As a matter of fact, some experts say that up to 50 percent of U.S. drivers do not have enough auto insurance coverage.

It’s important to make sure that you aren’t one of the thousands of under-insured drivers. Otherwise, if you are in a car accident, you could find yourself forking out your hard earning money—even though you have auto insurance!

When you’re on the market for a new auto insurance policy, be sure to explain your specific needs and financial situation to your insurance agent. A true professional can run a detailed assessment of your risk profile to ensure that you receive the proper amount of liability coverage.

Covering the gap

Oftentimes, auto insurance policies don’t cover the full replacement value for your car if it is totaled. While the carrier may pay for the total losses based on the actual cash value of your vehicle at the time of the accident, many carriers don’t pay the full replacement cost of your original car purchase. In other words, you are not protected against the depreciation of your car with these policies.

If you have this kind of policy and your car is totaled, you’ll end up paying the difference out of your own pocket for a comparable vehicle. This is known as the “replacement gap” in the industry.

However, there are some auto insurance policies that can help you avoid this gap. Many of these policies cover the full purchase price of your car, including taxes and license fees if your car is totaled within the first year after purchasing. Oftentimes, these carriers will even waive your deductible. Then, every year after the first year, your car’s value is determined by Blue Book, the auto industry’s standard vehicle pricing guideline.

Get customized

If your family has more cars than drivers, you may be able to get a discount if you choose the right carrier. Many families who own a recreational vehicle or “work truck” end up paying higher premiums. However, many of these cars aren’t driven on a regular basis—and therefore shouldn’t carry such high rates.

If you find yourself in this situation, try to find an insurance carrier that offers customized rates and deep discounts for rarely driven vehicles. A reputable insurance agent can help you find the best policy for your particular needs.

Read the fine print

When you first obtain auto insurance, you may notice that a few items are not covered by the policy. While this may not seem like a big deal at the time, these uncovered items can really stack up when you’re in an accident.

For example, many policies require that you only take your damaged vehicle to “in-network” repair shops. This can end up costing you a pretty penny and a lot of hassle after an accident. If you want to avoid these kinds of headaches, be sure to find a carrier that allows you to choose your own repair shop without paying a penalty fee. Read the fine print and make sure the policy covers all the items that are most important to you.

Work with a pro

At some time or another, most of us have received phone calls from insurance “sales representatives” trying to sell us auto insurance. These salespeople, who often work from phone scripts, don’t truly understand all the ins and outs of auto insurance—much less what kind of policy your unique situation requires.

This is why it’s so important to work with a professional independent insurance agent when purchasing auto insurance. Such an agent can guide you through the details of each different policy and recommend the most appropriate option for your distinctive needs.

As you work with an independent insurance agent, be sure to discuss your net worth, your opinions about asset protection and what you expect when it comes to handling insurance claims. This will ensure that the agent pinpoints the best policy that meets all of your needs and fits your preferences.

Do you dream of making heads turn as you cruise around town in a beautifully restored vintage roadster? Have your eye on a classic convertible that brings back fond memories of your high school days? Whether you’re planning to buy a sporty 1960’s classic or a rare vintage vehicle that was produced more than 100 years ago, you’ll need to find the right insurance to cover your unique dream car.

A car you can appreciate

Unlike modern cars, restored classic cars actually appreciate in value as they grow older. That’s exactly why you shouldn’t cover one of these unique vehicles with standard car insurance.

If you total your daily driver, your car insurance company pays you only the actual cash value (ACV) of the car. When insurers calculate this amount, they include the car’s depreciation in the formula. Because new cars are worth a little less every year, you rarely receive the full amount that you paid for the car.

Because classic or antique cars increase in value each year, you’ll need to cover it with special collector car insurance. Such a policy will cover the full value of your vehicle if it is totaled.

Defining a classic

The first step to finding the right insurance policy for your special car is determining if it actually falls into one of the collector car categories. While car enthusiasts sometimes disagree about the precise category years, here’s how these cars are typically defined:

• Veteran or Antique cars were manufactured before 1903.
• Vintage cars were manufactured between 1903 and 1933.
• Classic cars are often a source of controversy among car collectors. Some say classics are vehicles manufactured before 1973 while others say they are at least 20 years old.

If your dream car falls into one of these categories, you should definitely try to cover it with a collector auto insurance policy.

The requirements

Of course, you’ll have to prove that your collector car meets a certain set of standards before an insurance company will agree to cover it under a collector car policy. Every insurer has a different list of prerequisites, but here are some of the most common requirements:

• Your vehicle must be at least 19 years old and in good or restored condition.
• The car must be stored in a fully enclosed and locked building.
• You must mainly use the car for exhibitions, car shows and other such activities. It should not be your primary mode of transportation.

Surprisingly affordable

Many car enthusiasts are surprised to learn that collector auto insurance is relatively inexpensive. One reason the coverage is so affordable is because most insurance companies limit the number of miles you can drive your car each year—usually between 1,000 and 5,000 miles. After all, the less time you spend on the road, the less likely you are to have an accident.

Depending on your state and the insurance company you choose, your coverage options will vary. This is why it’s so important to do your homework and discuss all your options with a professional insurance agent.

Once you chose a policy, be careful to complete all the insurance paperwork as accurately as possible. One small mistake could lead to delayed payment or even denied claims if your car is damaged.

Many people latch onto a certain color in preschool and remain ever-faithful to that shade throughout their lifetime. Whether it’s blue, pink or green, they may deck out their childhood bedroom in their favorite hue, refuse to wear any other shade in junior high and even dye their hair that color in high school. Later, when it comes time to buy their first car, these color-faithful people usually choose a vehicle in—what else—their beloved favorite color.

While this is no surprise, some research reveals that the color of your car actually speaks volumes about your outlook on life, your personality—and even your driving style. For example, a United Kingdom study shows that black cars were twice as likely to be involved in U.K. car accidents than cream-colored cars.

Here are a few more interesting findings from the same U.K. study:

• Black cars are usually driven by aggressive people who consider themselves “outsiders.”
• Silver cars are usually owned by cool, calm and slightly detached drivers.
• Green cars are often driven by people with “hysterical tendencies.”
• Yellow cars are typically chosen by idealists with upbeat, optimistic attitudes.
• Blue cars are usually driven by introspective people who are cautious drivers.
• Gray cars are usually chosen by calm, sober drivers who are dedicated to work.
• Red cars are driven by energetic people who are fast talkers, movers and thinkers.
• Pink cars are often chosen by gentle, loving people.
• White cars can signify status-seeking extroverts.
• Cream cars, the least likely to be involved in an accident, are generally driven by self-contained, reserved people.

Does color affect rates?

Based on this particular U.K. study, car color can reflect a driver’s personality—but can it affect their insurance rates? Many people seem to believe so.

According to a 2005 Chicago Sun-Times article, 25% of surveyed drivers said they believe the color of a person’s car does affect their auto insurance rates. After all, aren’t drivers of red cars typically risk-taking, speed-demons and drivers of black cars overly aggressive, road ragers? If that’s the case, wouldn’t drivers with those color cars be viewed as a higher risk to the insurance company and therefore be forced to pay higher rates?

The answer is no. Insurance companies do not take the color of your car into consideration when they calculate your premium. Your insurer probably has no idea what color car your drive unless you offer up that information.

Typically, insurance companies determine your rate based on some or all of the following factors:

·   Your vehicle’s make, model, body type and engine size

·   Your personal credit history

·   Your driving record

·   Your usage of the car (such as if you are using the car for work, pleasure or as a collectible.)

·   How many drivers will be using the car and their ages

·   How many vehicles you own

·   What kind of coverage limits you want

·   Where you live

·   Your weekly, monthly or annual mileage

So, go ahead and buy your next car in your favorite hue to match your house, your clothes or even your hair. Although it may advertise your personality to the world, your car color will have no affect on your insurance rates.