When a Car Insurance Binder Policy is Necessary and Why

May 11th, 2010

Basically, a car insurance policy protects you against any financial losses you might suffer should you be involved in an automobile accident. Depending on who is found to be at fault, wither your insurance company or the other party’s insurance company will have to pay for any damages or injuries sustained. When you go into an insurance agency for a quote, they will ask you many questions relating to your driving and insurance history. You will have to divulge if you have had any tickets, suspensions, accidents, or claims in the past. As well, you need to let them know how long you have been licensed and insured.

Some car insurance companies will offer to write you a binder policy. To put it simply, a binder policy is a temporary ‘binding’ agreement that provides you with valid auto insurance immediately. This agreement can be in either written or oral form and is valid for a specified amount of time, which could be 7 or 10 days, or even longer. The car insurance binder policy can then be switched to a permanent policy once the premium has been paid. This type of car insurance policy is legal and if stopped by a law enforcement officer, it will serve as a valid insurance policy, even though it shows that it is, in effect, only for a certain amount of time.

There are several reasons why an insurance company will issue a binder policy. The insurance company needs a certain amount of time to properly underwrite a policy. This means that they must assess the risk that they are taking on. They will check out the accuracy of the applicant’s information and determine if it is a risk they are willing to take on. They will carefully review the applicant’s driving record, taking into account any tickets, suspensions, and at-fault accidents that may be on their record. If the risk is too high, they may charge a higher premium or decline the policy altogether.

When a consumer goes to buy insurance, they usually require the coverage immediately; they cannot wait 7 or 10 days. Proof of insurance is required if a vehicle is being financed or leased. The finance company and auto dealership will refuse to release funds or allow the vehicle to be driven off the lot without this confirmation. You also cannot register a vehicle without proof of insurance. After the premium has been paid, a permanent insurance policy will be mailed out to the client.

If your insurance company offers to write you a car insurance binder policy, make sure you are aware of what your coverage entails, when they require the premium to be paid, and how long the binder is in effect for.

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The Basic Car Insurance Policy and Why It is Being Phased Out

May 11th, 2010

Basic car insurance offers minimal coverage when it comes to your vehicle. This coverage includes two areas, bodily injury and property damage. Bodily injury liability means that the insured person is protected if they injure or kill another person while on the road. Note that this only covers third parties and it does not extend to the insured man or woman who is driving the automobile. Property damage liability takes care of another person’s property such as real estate or a second vehicle. Keep in mind that this coverage does not protect your car in case of an accident. The sole purpose of a basic car insurance policy is to look after third parties who are involved in an accident. This very simple plan will protect you from getting sued if you injure someone else or damage their property.

This type of basic coverage has severe limitations however, and most people generally opt for a more comprehensive version. Taking out one of these car insurance policies will not cover your own vehicle in case of a collision or if it experiences damage from events such as fires, hailstorms, falling objects or vandalism. You will also not receive any personal injury protection which covers the driver and passengers in case anyone is harmed. It is for these reasons that these types of plans are very risky for all involved. While they are very affordable and protect third parties, they offer no safety net for the insured person, their passengers or their automobile. These limitations have resulted in the basic car insurance policy becoming less popular as the general population moves to coverage which offers a greater degree of protection and better peace of mind.

Because of this lack of popularity, some insurance companies are phasing out their basic auto policies. More consumers are opting to sign up for full or comprehensive insurance and so the basic models are less in demand. There is also the issue of third party insurance being compulsory within the USA. While basic plans cover all these mandatory points, most people are choosing something offering more protection. Of course, this depends on the company that you are dealing with and some may still provide basic car insurance policies. However, because of their risky nature plus their decline in popularity, these companies are few and far between nowadays. If you are still interested in these minimalistic plans, ask your insurance provider if they can supply you with basic coverage. Be warned that these policies will not give you or your car any protection if an accident does occur and you will be forced to pay for damages to your person and property out of your own pocket.

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How the Blue Book Value Affects Your Car Insurance

May 11th, 2010

When choosing a particular car insurance policy, and making sure you receive the most advantageous car insurance rate, a knowledge of the Kelley Blue Book value of your car is not only beneficial, but essential. Let’s examine why.

The Kelley Blue Book is a used car valuation service that has been around since Les Kelley, the owner of the Kelley Car Company in Los Angeles, began publishing it in 1926. After the Second World War, it went from being a regional service to a national one, in response to the post-rationing demand for cars that swept the nation. Since then it has become the gold standard in the auto industry.

How the value of a car as determined by the Kelley Blue Book affects the car insurance rate is actually quite simple. If there is a bank loan on a used car, the bank will require that there be a comprehensive and collision insurance policy written on the car until they release their lien when the final payment is made. It’s a simple matter of looking at the tables in the Blue Book to determine the Actual Cash Value (ACV) of the vehicle, and writing the appropriate car insurance policy.

It’s well known that a new car depreciates drastically as soon as it’s driven off the lot. What isn’t always known to car buyers is that cars continue to depreciate in value year after year, and this is reflected in the latest edition of the Blue Book. That means that when a claim is made after a car has been severely damaged, the reimbursement will be on the current Blue Book valuation, and not on the price paid or the cost to replace the vehicle with a new one. What this sometimes means is that a car owner receives the ACV of the vehicle as a lump sum payment instead of the car being repaired or replaced. The savvy car buyer can cover this gap by knowing the car’s current Blue Book value, and buying Value Replacement Insurance, which allows for a replacement with the exact same car or a new car with the exact same specifications. Also, when the policy comes up for annual renewal, the buyer is insuring a car of lesser value than the year previous, and is entitled to negotiate a lower rate. So if you’ve bought a new or a used car and you are still required to purchase comprehensive and collision, make sure the rate is set for the current value of the car.

So if you are in the market for a car, new or used, get familiar with the Kelley Blue Book and shop online. It will help you spend your insurance dollars wisely.

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How Insurance Companies Determine Who is At Fault in a Collision

May 11th, 2010

Insurance companies generally use one of two methods when dealing with car insurance claims. These two methods are no-fault insurance and tort insurance. Each state implements their own laws, so it is a good idea to check which method your particular state follows. Let’s review both methods so that you, as a consumer, are aware of your rights should you become involved in an auto accident. An insurer specializing in high-risk drivers (drivers who have had convictions or policy cancellations, or even inexperienced drivers, or drivers who were found at-fault) may be assigned to you.

No fault car insurance pays for the insured’s loss regardless of which driver has been deemed responsible for the collision. The insured’s insurance company will pay the claim even if the other driver caused the accident. This is the simplest form of auto insurance, from the adjuster’s point of view.

With tort insurance, blame is always assigned; this can be to one driver or to both. The blame can be assigned anywhere from 0 to 100% for either or both driver. ‘Tort’ refers to a civil wrong that has been acted upon against another. In order to come to this conclusion, the claims adjuster must review several factors. One of the most important items in a claim is the police report. Adjusters rely heavily on this information. This being said, just because you are charged by the police for an accident, this doesn’t mean that the insurance company will apply full blame to you. As well, if you aren’t charged by the police, the insurance company could still assign blame to you. The role of each driver is taken into consideration as well as their level of negligence involved.

The insurance adjuster will assess the scene and interview several witnesses to help piece together exactly what happened. Insurance company adjusters also have a series of scenarios that they use to match up to what happened. If they cannot find one that matches, they may split the blame. These scenarios do not take into account weather or road conditions, the point of impact of the vehicles, nor the actions of any pedestrians who may have been at the scene.

When you are shopping for auto insurance, always check how an at-fault collision will affect your premiums. Also, keep in mind that if you lend your vehicle to someone else and they are involved in an at-fault collision, your premiums can still be affected, because you are actually lending your insurance as well. If you disagree with the adjuster’s decision, you may take further action. Knowing the difference between the two classifications can help you in future claims.

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Four Things to Ask Your Auto Adjuster

May 11th, 2010

A car insurance policy is mandatory for every vehicle owner; its purpose is to protect the owner from financial loss resulting from an automobile accident or claim. When this does occur, the first step to take is to contact your insurance company. You will be dealing with a car insurance adjuster at this point.

Basically, the job of a car insurance adjuster is to investigate every auto claim and determine if a payout is required and what the amount of that payout is, and who is at fault for the accident. This can seem like an intimidating process at first, so you should always ask questions if you are unsure about anything. Following are a few important questions that you should ask.

How do they determine who is at fault? Someone is always to blame for every accident, collision, or ‘fender bender’ that occurs. A car insurance adjuster reviews several different scenarios to come to this conclusion. In these scenarios, the adjuster must disregard the weather or road conditions at the time. If you are found to be at fault, this could impact your car insurance policy premiums.

How do they decide whether to repair the vehicle or deem it a total loss? When a vehicle owner files a claim because of an accident or vandalism, the insurance adjuster must decide whether it is financially beneficial to repair the vehicle or to deem it a write off. Ask the adjuster how this decision is made, so that you are fully informed. Usually, they will assess it using ACV, or the actual cash value method. This means that they take into consideration the mileage, overall condition, and average selling price of similar vehicles. If the cost to repair the vehicle is more than this amount, the vehicle will be a total loss.

What if I disagree with the decision? There are times that we may not agree with the final decision of the claims adjuster. If this happens, ask the adjuster what your next steps should be. If you have any additional information, paperwork, or witnesses that may impact the claim, you should immediately pass those along to him or her. It is possible that this new information could alter the decision. If you are still not satisfied, an unbiased appraiser will be appointed. Both parties must adhere to this decision.

What do they need from me? Make sure to ask your adjuster exactly what information they require. Usually, they will need a copy of the police report, any medical or hospital records, and a completed claims form. Having this information early on in the investigation will ensure that the car insurance claim goes smoothly and quickly.

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7 Tips for Cheap Car Insurance

May 3rd, 2010

Car insurance can be very expensive. Finding cheap car insurance can save you hundreds of dollars each year. Read these tips below to learn more about finding cheap car insurance.

#1: Required coverage
The car owner must know what coverage is required. Each state and bank or finance company has its own requirement for minimum coverage.

#2: Price comparison
It is useful to compare the exact coverage offered by more than one company. Because insurance companies can use different terms, it’s necessary to know the vocabulary used by the companies to make sure the comparison is between similar items. Using the internet can make comparison shopping very easy.

#3: Paying in full
Usually an insurance company charges a fee if the car owner chooses to make monthly or quarterly payments. There may be a substantial discount if the entire year’s premium is paid at one time.

#4: Multiple coverage
Insurance companies want as much business as possible. So, often times a discount will be available if more than one type of insurance is purchased. If car insurance, health insurance and homeowners insurance is purchased from the same company, the result may be some very cheap auto insurance for the owner.

#5: Multi-vehicle discounts
The insurance on two cars from two different companies may be far more than the combined insurance for the same two cars if purchased from the same company. Both cars may not have the same required minimum insurance, so the overall cost may be cheaper yet.

#6: Make and model of the car
Finding cheap auto insurance is influenced by the make and model of the car. Boxy, sturdy sedans usually result in less expensive insurance costs than sleek, speedy sports cars. Also, color influences insurance cost. Avoid red.

#7: Speed and driving habits
The best way to get cheap car insurance is to drive under the speed limit. Careful, cautious driving will result in fewer or no speeding tickets and no accidents.

With some diligent searching a car owner may find cheap car insurance online.

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Lower Car Insurance Rates – 8 Tips

May 3rd, 2010

Car insurance rates are one of the biggest components in the cost of owning a car. It makes good sense for car owners to find the lowest car insurance rate possible. Following the suggestions may help you find the best auto insurance rates.

Tip #1: Compare rates
There are hundreds of insurance companies with hundreds of car insurance rates. Comparison shopping is vital and will result in a better rate.

Tip #2: Increase the deductible
One of the biggest determinants of auto insurance rates is the amount of the deductible or the amount of money the car owner pays before the insurance company pays. Increasing the deductible amount can significantly lower the monthly car insurance rate.

Tip #3: Evaluate the age and equipment of the vehicle
The age of a vehicle influences auto insurance rates. The value of older vehicles is less, so their insurance rates will be less. Certain safety equipment such as air bags, anti-lock brakes and alarm systems will lower insurance rates.

Tip #4: Evaluate the age of the driver
Age is of critical importance when insuring drivers. Senior drivers over age 50 can get much lower rates than younger people between 18 and 25. But young people who have good grades in school and who have taken drivers training classes get lower rates than their peers who don’t meet these criteria.

Tip #5: Evaluate the sex of the driver
Women of any age receive lower car insurance rates than their male counterparts.

Tip #6: Reduce the amount of driving
Driving fewer miles each day can significantly reduce auto insurance rates. Using the bus system or participating in a carpool has definite financial benefits for car owners.

Tip #7: Reduce extra coverage
Insurance policies can include many unnecessary features. Such features might be towing coverage in case of a breakdown, roadside assistance to repair minor mechanical problems, provision of a rental car in case of accident or replacement of a broken window or windshield. While these are convenient features, they definitely increase the car insurance rates.

Tip #8: Drive smart
The driving history and habits of the owner are of prime importance to the cost of the insurance. Smart driving results in lower car insurance rates.

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Car Insurance: Reduce Coverage Costs

April 29th, 2010

Irrespective of which state you may reside in, you have to pay for car insurance if you wish to drive your vehicle. According to the laws of an individual state, you are required to invest in car insurance and depending on the state , the minimum amount might vary. Having vehicle insurance is a must in terms of requirements which qualify you to drive in the state. Many drivers simply apply for the minimum amount of insurance coverage, which allows them to get a driving permit lawfully. However, it is important to realize that if you invest in proper auto insurance coverage, then you might end up saving a lot of money.

Get Affordable Insurance
There are various ways that you can manage to get affordable car insurance. People tend to look for bargains when shopping for items in their daily life, and in the same way, looking for a bargain on car insurance may also be a wise move. The first step in getting a bargain is to understand how much coverage you are looking for. Once you have decided on that, you can start filling out online forms with your specifications and asking for a insurance quotation. Insurance companies offer quotes for free, so you need not worry about wasting money or feeling obligated to make a purchase. These quotes will help you to get a better idea about the kind of money involved. You will also be in a position to compare the quotes against each other and choose the best.

Things to Avoid
Make sure that you are comparing quotes of the same coverage amounts from different companies. Sometimes you may be comparing different policies against each other, so make sure to pay attention to the details of each policy and how much coverage you are being offered.

Benefits of Looking Online
When searching for insurance policies online you can do it all from home without having to travel to agencies and brokers in order to simply gather information. Sitting at home, with a click of the mouse you have a ready list of quotes which you can compare within a short period of time and also do more research.

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Understanding How Many Adjusters Work on Each Car Insurance Claim

April 27th, 2010

If you’ve ever tried to file an insurance claim for an automobile accident, you’re familiar with how confusing it can be. The process of filing paperwork, negotiating with insurers, and assessing damages drives people to seek assistance from professional claims adjusters. Understanding how many adjusters are going to be working on your claim can help you get the maximum return out of an unfortunate incident.

A car insurance agency has its own adjusters who will come to your side, but there are other options available for the resolution of your insurance issues. If you decide to go with the car insurance company’s adjusters, your claim may be estimated by a single adjuster who determines how much money your policy will pay out in the form of a handy check. If the adjuster decides that your car is totaled past the point of rescue or repair, the adjuster simply calculates the amount of compensation you’ll receive based on your old vehicle’s pre-accident value. In case of personal injury auto insurance claims, you can expect a car insurance agency to assign a single adjuster, who may visit you or simply contact you via phone or email.

Another possibility is that no adjusters will deal with your claim except in review. With companies that provide low rate car insurance online, you may find that they have a direct repair program. With direct repair, your carrier will send you to a shop that has a specific agreement with them, so they can get started on repairs right away. In this case, the insurance company will simply transmit the check to the mechanic’s shop. Affordable car insurance quotes online have many extra features that you should check before you start a new policy; direct repair and estimated claims are among those that can help make things a bit easier on your end.

If you decide to hire your own adjuster, make sure that they are certified to work in your state or locality, and realize that they are going to be your single point of contact for negotiation. Car insurance claims can be a major hassle, but with the right adjuster and the best providers of car insurance online, you can work through the paperwork and collect an amount that doesn’t leave you wondering why you pay for insurance in the first place. The best affordable car insurance quotes aren’t only low, but also have specific extras that will accommodate you in the future, saving you money on repairs and injury compensations as well as on initial premiums and associated fees. A bit of research can prove to be extremely fruitful in the end.

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How Your Vehicle VIN Number Affects Your Car Insurance Quotes

April 27th, 2010

Auto insurance, like every form of insurance, is a method of neutralizing risk: the policy buyer is willing to pay a relatively small amount of money, a premium, to be shielded from the possibility of a much greater loss to a valuable object. But how do insurers decide how much money will compensate them for assuming the greater risk? How is the car insurance premium itself even calculated?

It’s a complicated formula involving actuarial models on a state-by-state basis, a driver’s own record, and information about the car you drive, which insurance actuaries can determine from a lengthy alphanumeric serial number known as the Vehicle Identification Number – VIN, for short – that is often found etched inside the driver’s door. Simply put, your Vehicle Identification Number affects your car insurance quotes because it helps insurance actuaries determine the true value of the automobile you’re driving.

An increasing number of states are requiring an insurer to obtain a VIN before divulging a car insurance quote. Having specific information about the model and make also helps your car insurance company know if there are any safety enhancements that will improve the chances of a favorable outcome should your vehicle be involved in an accident. It also helps in determining if there are any equipment recalls that will unfavorably affect the safety performance of your vehicle. The Highway Loss Data Institute, among other organizations, keeps track of insurance pay-outs on different models and makes, and it’s quite possible that some insurers use this information to fine-tune quotes. However, this information is far less important than your own driving record and the area in which you’re driving.

To those who know how to decipher them, VINs summarize information about the country the vehicle was manufactured in, the year it was manufactured, the make, model, and assembly plant where the vehicle was manufactured, as well as information about its assembly (for example: whether it was the first or 100th vehicle on the assembly line); and in some instances, even equipment specifications. The last eight characters of the VIN function as a unique identifier that prevents your vehicle from ever being confused with another vehicle. Many people mistakenly believe the color of their vehicle affects the price they pay for automobile insurance. To find affordable car insurance, a good search for car insurance online can definitely help. Affordable car insurance is not far away as long as you’re willing to do some car insurance comparisons for car insurance online. Your VIN may have a strong influence on your insurance rate, but car insurance comparisons can ultimately get you an affordable premium.

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