Insurance Assistance

 Our Repair Angels are happy to provide guidance for the Auto Insurance process, however we can't always guarantee the most current data for insurance companies. You can view J.D. Power Associate's 2010 Ratings.
 
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Buying Insurance

There are several variables that affect buying insurance. The following are some tips to help you find the best value on your next purchase.

Insurance Rates

Insurance rates are based on factors you can't readily change -- your sex, age, marital status and where you live -- and ones you can -- your credit scores, what you drive, how well you drive and how much coverage you buy.

Good Behavior for Saving on Insurance Rates

  • Pay all bills on time. Your premiums are based in part on your credit scores or an insurance risk score based on your credit reports.
  • Drive defensively, and avoid distractions such as text messaging or talking on a cell phone. One speeding ticket may not raise your rates, but an accident you caused probably would -- generally by 40% of the company's base rate.
  • Avoid an excessive number of tickets, at-fault accidents or a drunken-driving convictions These people may not be able to find regular car insurance on their own, and would need to contact their state insurance department to join their state's high-risk pool or a find a nonstandard insurer. Both choices mean higher premiums.
  • Don't lend your car. If your uninsured friend wrecks it, your rates will go up, and you'll be liable for claims exceeding your policy.
  • If you get married, you'll get a discount and benefit from combining policies. People 55 and older get a discount for taking a driving class.
  • Adding your newly licensed teen to your policy will increase your premiums 50% to 200%. One way to reduce costs: Buy a beater and list your child as the driver. Teen drivers can get discounts for drivers ed courses or good grades. (See "Cut the cost of insuring your teen driver.")
  • You may get a discount if your child attends college away from home.

Vehicle Considerations

  • Check the cost of insuring a sports car before you buy it. You'll pay higher premiums for a vehicle with higher collision-damage costs or that is attractive to thieves. Use MSN Money's comparison tool.
  • High-tech items on vehicles are more expensive to replace after a crash.

Save When Shopping

The company you select and the coverage you buy can greatly reduce your rates.

  • Shop around. Check rates online at InsWeb.com and consult an agent through the Independent Insurance Agents & Brokers of America. Rates vary greatly depending on a company's operating expenses, history of claims and formulas for setting premiums. Check a company's financial status and consumer record. The last thing you need is to go cheap and then find it's all but impossible to file a claim.
  • Increase your deductibles on comprehensive and collision coverage to an amount you can cover out of pocket.
  • Consider dropping both if you own your vehicle outright and the combined annual cost for that coverage is more than 10% of what you would get if you car were totaled.
  • Ask your insurer about all available special discounts.
  • If you're switching insurance companies, do it in writing. Your credit scores will suffer if you're canceled for nonpayment.

Types of Insurance

Liability insurance: This insurance pays for injuries and property damaged in an accident if an insurance adjuster determines you were at fault. It does not cover damage to your vehicle, your injuries or those of other people on your policy.

State minimum requirements provide inadequate protection. Buy no less than $100,000 per person, $300,000 per accident and $50,000 for property damage, or no less than $300,000 if your policy has a single limit. You are personally liable for claims that exceed your coverage, so buy even more if you can, and consider an umbrella policy.

Uninsured/underinsured motorist protection: This insurance covers injuries to the occupants of your car, and property damage in some states if the other driver has too little or no insurance.

Collision insurance This coverage pays for damage to your vehicle in an accident. If your car is totaled, you'll get what the insurer considers the pre-crash market value of your car, minus your deductible. To get a general idea of what that may be, check the Kelley Blue Book private-party price. You can pay extra for replacement-cost coverage for newer cars.

Comprehensive insurance covers theft of your vehicle and noncollision damage to your car, as well as animal collisions. You may be eligible for lower rates if your vehicle has anti-theft and tracking devices.

Medical or personal-injury protection provides coverage for you and your passengers, regardless of fault. You may not need this insurance if you have good health insurance.

  • Twelve states have no-fault insurance, which generally covers the insured person's injuries and property damage no matter who is at fault.
  • Consider gap insurance if you owe more on your car than it's worth.

If You Have an Accident

If you've been in a collision, tell your insurance company for your own protection, even if injuries are not readily apparent. Informing the company does not mean you are filing a claim.

  • In an accident an adjuster will be assigned. They may work with both you and other driver involved. They may also look at police reports and the conditions of both cars.
  • If you disagree with the value assigned to your totaled vehicle, provide quotes from local dealers and proof that your vehicle was well-maintained.
  • Over half of states require insurance companies to pay the sales tax on a replacement vehicle, based on the settlement value of your totaled car. Request it, as well as registration and title fees, wherever you live.
  • If the driver at fault in a crash is uninsured, consider "stacking" or collecting on all of your policies that have uninsured/underinsured motorist coverage to fully cover the damage, unless state law prohibits it.
  • If you cause an accident, does your policy require you to pay the difference between generic and original-equipment manufacturer parts? If someone else caused the accident, request original-equipment parts for your repairs.
  • If no other party is involved, you may be tempted to keep quiet about a minor claim. But why have insurance if you can't use it when you need it? Filing an insurance claim isn't necessarily bad. It makes good financial sense to use insurance when necessary.

Before and After Making an Insurance Claim

What happens after the claims process varies. If it is determined that you are at fault, your rates could go up or you could lose coverage altogether. Here are things to know about car insurance before and after you file a claim:

1. Know the difference between cancellation and nonrenewal.

There's an important distinction between an insurance company choosing not to renew a policy versus canceling one. According to the Insurance Information Institute, a company can't cancel a policy that's been in force for more than 60 days unless one of the following has occurred:

  • The premium has not been paid.
  • The insured person fraudulently filled out the insurance application.
  • The policyholder's driver's license has been revoked or suspended.

However, insurance companies can decide not to renew a policy once the existing term ends.

2. Ask about penalties before you have to file a claim.

The best time to find out your company's renewal guidelines is before you buy auto insurance from them so you avoid surprises later. Read reviews from organizations such as Consumer Reports. An insurance company may offer great prices but risks of sharp rate increases or being dropped after an accident might not be worth it

If you already have a contract with an insurer, review your contract to learn about nonrenewal guidelines. See what remedies are offered if you disagree with a decision not to renew your insurance. Some policies offer third-party arbitration.

3. One minor accident probably won't cause your policy to be dropped.

It is a very small percentage of people who are no longer offered coverage based on the amount of claims filed. It is unlikely your coverage will end after your first at-fault accident. A driver typically has to have two at-fault accidents over three years, with damage exceeding $1,000 to be at risk for losing coverage.

However, if alcohol is involved, the driver probably won't have the policy renewed. In addition, having multiple traffic tickets could be a cause for nonrenewal, even after only one.

4. If you are at fault, prepare for a rate increase.

Though your insurance might not drop you after an at-fault accident it will likely increase your premium at the next renewal term. Some insurance companies offer "accident forgiveness" policies that enable a policyholder to file a claim for an at-fault accident without the fear of a future rate increase. The drawback is that these policies might require a higher premium, even if the driver has a clean history. And though an accident could be "forgiven," it won't be forgotten -- it will still remain on the driver's record.

5. A minor accident could become an expensive problem.

A person involved in a minor accident like a fender-bender might not think that it's a big deal. He or she may even decide not to tell their insurance company about the accident, preferring to pay for any damages out of pocket.

But what some people think is minor could turn out to be expensive and damaging. For example, that fender-bender could cause a personal injury that's not evident until a week after the crash. If people delay reporting an accident to their insurance provider and law enforcement, the company may have a hard time investigating the accident thoroughly -- and finding evidence that would prove that the policyholder is not at fault.

A delay in reporting the accident could also make it harder to collect damages from the other party if they are at fault.

6. Know your next step if your policy is not renewed.

If you've filed a claim and your policy is not renewed, it may not be entirely your fault. Your insurance company could simply be reducing the number of auto policies that it writes in your geographic area, so even one small claim could make the company decide not to renew.

If you think your current insurance company is unfairly refusing to renew your policy, contact your agent and voice your concerns. If that doesn't help, go to your state insurance department to complain. If your car insurance contract states that your company offers arbitration, contact your local representative to start the process.

Even if you take these steps, it's still important to find another insurer that wants your business.