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Auto Insurance
An informational guide on assigned risk and preferred
risk auto insurance.
Where you live or, more precisely, where you keep your car at
night has a bearing on your chances of having an accident or becoming a victim
of theft or vandalism. That's why a vehicle owner in Manhattan, New York, pays a
higher rate than the owner of an identical vehicle in Black Mountain, North
Carolina.
Other factors affecting regional insurance rates include time and
efficiency of police response and law enforcement, local road and traffic
conditions and the quality of local medical services. Insurers even factor in
the litigation rates in a given area--that is, how many lawsuits are filed, go
to trial, are settled out of court and for how much.
Why are rates different for different cars, even
if the cars cost the same?
Vehicles are also grouped into categories according to their
chances of being damaged, vandalized or stolen. Insurers generally consider the
size and type of vehicle, as well as the value and the cost of repairs which
vary greatly, even on vehicles that cost about the same amount. Therefore, it is
assumed that a new sport utility vehicle is expected to hold up better in an
accident than a sports car or a subcompact or electric hybrid car.
Putting insurance aside for a moment, safety is key when buying
an auto. Your life and everyone who rides with you depends on it! Some
cars are considered safer than others because of their performance record in
safety tests and real accidents.
That is why you consumers should research insurance coverage
before you buy your car. It helps you to understand the actual cost and
indicates those vehicles with good safety records. Your insurer will ultimately
reward you for putting safety first.
If you are insured in a no-fault state and have an accident, you
don't go after the other driver. You contact your own insurer and file a claim.
Your own insurance policy guarantees you immediate compensation for damages,
medical expenses, lost wages, essential services, rental car arrangements etc.
The type and range of no-fault coverage varies from state to
state. What defines the limitations of no-fault policies can differ in two
important areas:
- Threshold--The type of damage or injury
or the cost of repair or recovery that triggers the need for legal action.
- Mandated--Benefit Level The package of benefits (medical,
wage loss, replacement services and other expenses) your state requires you to
carry.
The details of no-fault insurance can be complicated. Contact
your agent or state's insurance department for further information.
No. Some states, while not mandating auto insurance, have what is
known as financial responsibility laws that require all drivers to be able to
pay for any damage or injury they may cause. However, carrying liability
insurance is still the best way for you to meet your state's financial
responsibility requirements once you know what they are.
UM and UIM policies are offered by law in all states, including no fault states.
In fact, some states require all motorists to carry this coverage in order to
gain protection from inadequate insurance coverage of other drivers that may not
carry enough or higher limits as the majority does; i.e., 100-300-50,000.
First, call the police to the scene to be sure all pertinent
information is properly recorded. Your nerves will be shaken right after an
accident, and it helps to have a calm and knowledgeable person walking you
through the necessary details.
Then, contact your agent or policy holder services or claims
number usually on you ID Card immediately and ask about filing a claim. If you
followed all the recommended guidelines and procedures when you bought your
policy, you should be covered within the benefits and or limitations of that
policy. Remember, your car insurance policy is designed to protect you and
anyone in your vehicle.
It is better to have the police report and not really need it ,
than it is to need one for court and not have one because it would have taken
another thirty minutes to an hour extra at the incident scene.
However, your insurer can choose not to renew your policy for a
variety of reasons.
Do you have a bad driving record? Have you received a lot of speeding tickets?
Have you ever been caught driving drunk? Not only are these scenarios considered
unsafe and illegal, they are justifiable cause for your insurer to label you a
bad risk and refuse to renew your policy. Some underwriters may feel compelled
to cancel policies after only one accident.
Where do you live? Has the neighborhood changed in the last few
years? Have the accident or crime rates risen noticeably? As regions are
reassessed periodically, their status could change and you could suddenly find
yourself living in a higher risk area, where your insurer's rates may not be
adequate to cover losses.
Even "good" drivers can find themselves in the position of being
dropped by their current carrier. Reasons range from a couple of moving
violations, or multiple accidents, or other serious violations that make you a
high risk to situations outside your control, such as when insurers in your
state are suffering severe business losses. Overall rises in claims or losses
can cause insurers to become highly selective in determining whom they can
afford to offer to insure.
Insurers often discount their rates in order to encourage good
driving practices and the use of safety and security precautions. Depending on
the insurance company, you can often lower your rates from 5 to 55 percent.
Sometimes the investment you make in your vehicle is worth the discount, and
sometimes it's simply worth some peace of mind. For example, the purchase of
anti-lock brakes merits a discount from nearly every insurer, but the discount
probably will not pay for the brakes which cost several hundred dollars during
the normal life of your vehicle. Anti-lock brakes are touted, nonetheless, as a
life-saving feature and deserves serious consideration when safety is a top
priority.Insurers generally offer discounts for:
You can also lower your insurance rates by requesting higher
deductibles, which is the amount of money you pay out of pocket before you make
a claim. Increasing your deductibles on collision and comprehensive coverage
from $100 to $250, or even $500, will bring your rates down. Moreover, you may
not need collision and comprehensive coverage if you drive an older car. Ask
your agent which discounts are available to you.
About the Author.
Dwain Ammons is a veteran insurance agent with over 30 years of
experience helping clients in a caring, knowledgeable, professional manner.
Dwain is a regular contributor to several top insurance related websites.
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