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May 2015
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The Way Automobiles Are Utilized Affects Insurance Costs

Risk management and pricing is the core of insurance. Companies allocate huge reserves to make sure they take every possible available information and calculate the premiums accurately. This is the only way a company can remain competitive and profitable. They utilize statistical probabilities and programming technology to help them be sharp and get it right.

That is why premiums have been steady for a long time while all the costs have been going up. Companies find a new way of calculating risk and separating good drivers from the bad ones. As they get sharper and sharper they can have cost savings and reduce the amount of losses. When you are a bad driver who has already had several accidents you have two choices. You either pay the high premiums or go without the coverage. A few people accept the consequences and pay the additional costs while others may decide to buy the minimum cover they can get by.

yearly auto usageThere are so many factors that affect how your rates are determined. Driving history, claim records, age, gender, type of automobile insured and credit score are only few of the well-known ones. Mileage and for what purpose you drive your vehicle is another one and it is what we are going to discuss today.

When you are getting a quote you will be asked questions about the way your automobile is used or you will need to make a selection from multiple choices. Generally, you may see two choices; commute and social use and pleasure only use. When you are using your car for a daily work commute your use is heavier than when you take other transportation to work and your car sits at home. Pleasure only is a light use of automobiles. It includes doing your shopping taking children to school and even taking road trips for holidays. But you shouldn’t be using it for commute every day.

Another measure used to calculate the premiums and auto usage is the yearly mileage. When you drive as much as anyone else you get charge like anyone else. When you are driving a lot less you paid lower premiums. And when you are driving up and down the country racking thousands of miles every year you paid a lot more than an average driver who only travels about 13,000 miles a year.

Mileage is pretty easy to understand, calculate and check. Obviously there is no way of knowing exactly how many miles you will travel every year at the start because the premiums are charged at the start. So, a rough estimate is acceptable and few miles here and there will not make a huge difference. But there are set limits used by many companies. When you are driving less than 3,000 miles a year you are considered a light auto user and get large savings. You are unlikely to have an accident when you don’t get on the roads.

Average American motorists travel about 13,000 miles a year. So, a few thousand miles above or below deserves attention and adjustments in the premium.

How to File an Automobile Insurance Claim

It is quite disappointing to get involved in an accident. You go through in your head and question if there was anything you could do to stop it. You can even wish that you had started a few minutes later to miss the other vehicle you collided with. You should not allow these thoughts to overwhelm you. You should concentrate on the job in hand.

First thing you should determine is the size of damages. This will help you decide if it is really worth making a claim. Remember that your you will not get discount auto insurance rates from the next renewal if you make a claim. Keeping a clean driving history and saving money on your premiums may be another way of getting paid for small damages. Number of claims you made is as important as the size of these claims.

Filing a Claim

Depending on your insurer you may be able to make a claim online. However, you should call your insurer immediately when you are involved in a big accident and there are injured people. They may like to get involved straight away to handle the possible liabilities better. Remember to get a claim number when you call. It may be possible to enter it online later on and follow the process in real time.

Remember that your statement is only one part of a claim. The accident scene pictures, the statement of other drivers involved and witnesses and most importantly police report will need to be taken into account. Nonetheless, it is important that you relay the information you have about the accident. They may see the picture of the accident scene but they may not know how it developed into a crash.

Deciding about the Repairs to Be Done

Your cash position can be very important when deciding how to proceed with repairs. You may like the vehicle to be repaired by a body shop you vetted out rather than allowing it to be taken to an insurer approved garage. The problem there is that you may have to do a little more work and paid it out of your pocket first and ask for reimbursement. If you are struggling with cash this may be a problem.

If you agree the automobile to be repaired by the company approved body shop you have to be satisfied that the company has chosen a good repairer. The biggest advantage of this route is that you do not have to deal with technicians or bills. The claims adjuster will deal with them and settle the repair costs directly with the garage.

Understanding Your Policy Limitations

You need to have the necessary coverage to be able to make a claim. Also you should be aware of the deductibles to make a good decision about claiming for the loss. Otherwise, you may make the claim and have it on your record but find out that you do not have enough coverage for it or your deductible is too high for you to get reasonable settlement. It is important to have a quick look at your policy before going ahead with the claim.

How Does Auto Insurance Deductibles Work When Making a Claim?

Car insurance deductibles is one of the key features of a policy and should be looked at with attention. Deductibles are the amounts you have to pay out of the pocket each time you have a claim before the rest is settled by your auto insurers. They apply to each and every claim and therefore you need to think carefully before increasing them. Would you be able to pay several lots of money should you have several accidents and incidents?

While the out of pocket costs of a deductible can be reasonably important, they frequently look unimportant in comparison to the price you are being charged for your coverage. After an accident happens, many drivers are left wondering just how and when their deductible will be picked up and how they were expecting to have repairs started on their car.

Vehicle insurance firms will generally offer numerous selections when referring to deductibles. Some will be offering a no deductible claim for the first accident that a driver has so as to lure new buyers to enroll for a policy. This is something you would clarify upfront with companies or agents. It is best to know in advance and be prepared for, rather than forgetting about it.

Policyholders may be given the option of choosing the deductible amounts. This will naturally affect the premiums charged. The lower the deductible a customer selects, the higher their monthly payment will be. But the amount they will have to come up each time they have a claim will be lower. A high insurance deductible can be a terrific way to save costs, but can be costly if more than one accident happens in a year for a driver. Once an accident has taken place and has been reported, driver need to get their automobile to a body shop of preference.

The required repairs and price will be worked out by the vehicle body repair shop. This estimate will be presented to the insurer in due course. A loss adjuster may need to come out and look at the damages if the repairs are costly. The loss adjuster is the person who would approve the work before it can commence.

Once the body shop finishes the repairs vehicle owner is informed to collect it. This is usually the time to pay the deductible to the repair shop, instead of to the insurance firm. The company will pay the body shop the figure to fix the automobile, less the deductible so they don’t lose any cash. At the end the whole invoice gets paid by both parties.

In other occasions the company may ask the driver to pay them the deductible so that they can pay the full amount to the mechanics. In rear cases the money can be demanded before the works start on the car. This and other similar issues relating to automobile insurance is discussed in our forum. You can register and ask questions or simple read the discussions and articles as a guest.

You don’t have to struggle on your own when the internet offer you great sources of information. Insuring a vehicle can be overwhelming and confusing at times. You should get to the bottom of the problem and fully understand the implications of your choice. It is too late to regret about it when you have a claim. As discussed above that would be the time payments are made. Paying lower or higher deductibles may not be as significant as having no coverage for your losses.

Reputation of Vehicle Insurance Companies

When you are selling auto insurance you cannot ask your client to hold it to see how good it is. You cannot ask them smell it or see it either. Yes, you can show them the policy documents but most people are skeptical about them as they are worried most details are hidden in small print somewhere. So, the only thing that you are left to go on is the reputation of the company. If they heard good things about the company your job is half done. When there are too many bad publicity about the carrier you are working with you will have a mountain to climb.

This does not mean that companies will roll over whenever you threaten them with exposure. They are tough nuts and they will make a stand when they believe they cannot lose. However, a reputation is not built over one or two case or claim payments. It is built over years of consistent service and taking care of customers. When you have so many policyholder vouching for you and recommending you to their friends and family you have a solid grounds to build on.

happy policyholdersSometimes automobile insurance companies don’t even need to make a claim payment to impress their policyholders. Answering phones in a timely fashion with a friendly local voice and dealing with any inquiries quickly and knowledgeable would win over customers every day. People still value human touch and personal services even though they can get quotes online and submit claims. Good customer service increases policyholder retention.

Some companies can take it a level further and have a few more tricks in their sleeves to keep a policyholder. For example, their policyholder may have found a better deal somewhere else and calling the company to tell that he/she is leaving. This is the moment for an agent to get busy and discover a new discount from a magic hat. They can have a look at the coverage again, ask a few details to see if there are other discounts you qualify. If all fails they can ask you to pay in full and they will match the quote you have. They usually may offer savings when you pay the premium at the start anyway. So, this would be a good time to tell the customer about this lovely savings and keep them happy and keep the business.

It takes a lot of care and attention to be a great insurance company. You will straight away notice that some companies thrive to exceed your expectations. And you will see companies that treat you like you mean nothing to them and you should just go away and not bother them again. We all know both types of companies and how you feel after talking to them. It is a terrible feeling to get insulted with your own money. And you would insult yourself further if you still stay with them. You really don’t need to have a claim to judge the qualify of a car insurer. You don’t even need to contact them as well. There are many websites that regularly publish how companies are doing in the eyes of their customers. Just search and check how the company you want to do business with is doing.

Why States Require You to Carry Liabilities Auto Insurance?

Federal government and state authorities have to work towards increasing everyone’s well being. They don’t care that you bought a car and want to drive it know or never drive at all. What they care is that what may happen on the road and how others may be affected from the way you drive. They try their best to raise awareness, put road signs and speed cameras to reduce accident. But no one can know when they happen and who is involved. So, they cannot stop you before you cause an accident and injure other people or cause them damages.

However, they can make sure that you bought a policy to pay for those damages if they ever happen. That is why every state in the USA has minimum auto insurance liabilities requirements. This is an amount set to compensate third parties and each of them come to their own amounts and rules. Is it enough to pay for every possible loss that may be caused?

The answer is no and has to be no because there is a fine balance in play between the coverage and premium costs. While states are setting certain limits as to how much insurance you should buy they are crudely aware that the costs have to be kept in check. If the premiums for a minimum policy is too high people cannot buy them. This creates another problem and much difficult one to deal with. That is why they set these limits as absolute minimum.

And that is exactly why you should set your own limits over and above requirements set by your state. Clearly people are free to sue you when your insurance runs out and their losses have not yet been paid. This would be more apparent when they suffer serious injuries and it will take a few years more to fully rehabilitate following an accident your caused. They cannot work because of you and they have medical bills to pay. They want every cent you have so that they can pay towards their expenses.

Consider buying sufficient liabilities coverage not only for auto but home and business insurance as well. There are many lawyers waiting for calls from those injured parties and they will work free until they win the case against you. Only than they will get paid from the proceeds. So, they are determined and they are unlikely to take on a case they cannot win. You can get ahead of all those stresses you will face and cause to others by arranging sufficient liabilities coverage.

Going back to the main discussion, the amounts set by states will affect the premiums charged within that state. Not only the basic coverage but also the laws of the state will influence vehicle insurance costs. That is why you can see considerable differences on the average premiums paid in two states even though they may be neighbors.

Furthermore, state insurance commissioners have a certain degree of control over the companies operating within their borders. They issue the licenses to insurers, agents and brokers and they deal with complaints from customers.

Finding the Best Car Insurance Quotes

When you talk about the best it clearly doesn’t mean the cheapest. We need to get this out of our system early on and have a look at how we can achieve good deals. We want to get insured properly, by a company we can trust and don’t want to pay a fortune for it. Do you think we are asking too much or it is achievable? The moment you start having negative ideas is the moment you start losing it and dooming yourself to average insurers with average policies and high prices.

Searching for the best is an attitude you develop over the years, not over night. You need to understand that you have options and you mean to find them. Many people may think that you cannot handle dealing with things as complex as auto insurance. This is actually a total nonsense and regularly used by brokers, agents and insurance companies to tell you that they can make a better choice for you than you could for yourself. This can never be the case as they have no clue as to your budget, income and insurance priorities.

It is really is not so difficult to arrange your own auto insurance policies. Even you cannot speak proper English you can still find quotes, understand what policies cover and how much they are likely to pay if you suffered a particular loss. Besides there are many websites that offer information in different languages and you can talk to companies in a language you are more comfortable with. Alternatively, you use online translation services. The point we are trying to make is that it is not difficult and you should take excuses or create them yourself.

Most of the information you need to start getting quotes are available on three documents. Your current insurance policy, driving license and vehicle registration documents. Once you have them ready you can fill a quote form within few minutes and get your quote. You can repeat this process several times until you start getting reasonable premiums on offer. Once you manage to find two or three similarly low premiums for the same cover you can start comparing them with each other.

You must know what you are looking to buy. Otherwise, you would be inclined to use other measures to pick a policy rather than making sure you have the require cover and you are satisfied with it. It is easy to go with the cheapest one but this is probably the wrong choice generally. The cheapest policies can be basic and have too many conditions and stipulations that it becomes unpractical.

You should never forget why you want to buy insurance in the first place. If a policy you buy isn’t going to help you when you have a claim you might as well keep your money in your pocket and pay the claim when it happens. Furthermore, you don’t want hassles and worries as well. You want the type of risk you are trying to avoid covered clearly and openly. There should be too many maybes and ifs in a policy you buy. So, look at the quotes you received carefully and call the company if you need to ask any questions. Sometimes, you may need to call and ask for additional coverage and pay the premium difference to achieve exactly what you need.

Questions on Vehicle Insurance Premium Changes

Sometimes we forget that we are living in a democratic country with an open market system. This results in letting service providers dictate the terms instead of consumers. When you realize that you are not getting what you want and you are being messed around on top of it you should have a look at what you are doing wrong. It may be time to look for better products, providers and prices and insert your authority. This applies to purchasing policies of any type as well.

insurance premium hikeYou hear many policyholders are complaining about recent premium increases. And you have the sense that they will do nothing about it and renew with the same carrier again. This doesn’t mean that the price hikes wasn’t justified. There are many cases that your insurer can increase their rates on your policies and still be one of the most competitive firms in the market. Also, the changes may be brought on due to the actions of your own. Here are some of them.

When you keep violating traffic rules you cannot expect your insurer will not find out about them. Sooner or later they will see your DMV records and make adjustments to your premium accordingly. You can shout and cry as much as you like. It will not change anything and other companies will see the same information and penalize you with high rates. So, you need to keep driving nicely and avoid tickets if you want to keep your nice, low rates.

Another thing they can check on a regular basis is your credit history. When it was good you would have received some discounts. When it turned south they will notice it at the next renewal and take away the savings you enjoyed. Technically, you are seeing premium increases because you lost your discounts. If you want them back you need to look after your finances better and get them back because every other company you apply will be able to see them as well.

When you see increase in your auto insurance costs you should call the company ask them what is the reason. They will have to explain it to you by the law. This will show you what has been going against you and if there is something you could do about it right now or in the near future. You can even plan ahead and reduce the impact of changes in your life.

For example, you may see that your rates have gone up after you changed your car. This may be a good time you get a few other quotes and see how your new automobile is rated by other firms. Some companies may offer extra savings for the safety features in your car while others may ignore them. By finding the maximum savings you can bring down the costs again.

It doesn’t have to be the savings about your automobile. While you are searching you can discover other ways of cutting costs. For example, another company may offer you ten percent savings just for switching to them. If you want changes you have got to take action.

What Some Do When They Don’t File a Claim

Generally, there is two types of attitude when it comes to making auto insurance claims. Some people would get on the phone and tell their insurer regardless of what is the damage and how much is it going to cost to get it fixed. They believe that they are entitled to compensation no matter what. This righteous approach may not be smart approach nonetheless.  Yes, you can claim and nobody is going to stop you. Companies can even entertain you by sending you the check within few days of receiving claims.

However, making claims is like getting a criminal record. The first one may be put down as wrong time wrong place. Second time may be seen as bad luck. But third strike doesn’t go down well and it may result in huge premium increase. And some companies may even decide not to renew your policy. So, you may need to be smart about when you are going to make a claim and when you are going to hold back.

a fender benderThis exactly what many motorists do when they have small damages especially when there aren’t other people involved. Instead of calling their insurer they pull up at a body shop and get a quote for their damages. If it is something they can afford to pay they leave the car for repairs and get on with their day. They don’t want to go through paperwork and submit a claim for something small. Besides they will have to pay the deductibles themselves that makes it less worth to claim.

When they have a serious claim they don’t need to hesitate anymore because it is too large for them to pay on their own and this will be their only claim. This is called being selective in making claims and choosing which damages to pay and which should be paid by the insurer. Many people practice this method and it is well accepted to be a good solutions to premium increases. When the company doesn’t know about the incidents you have been involved they cannot be the wiser and keep offering your low rates.

And you can afford to pay small damages out of the wallet when you are getting extra discounts for being a good driver. So, you take it from one place and put it onto another. You need to remember one important point here. When you have a claim this year it affects your rates for the next three years at least. So, the savings doesn’t stop with this year only and you keep getting them. Do you still think it is a good idea to ruin your records and lose your discounts because of a silly claim?

Furthermore, you may be able to negotiate with the mechanics to get your repairs done at a lower cost. You can achieve this by getting a few estimates and discussing the repairs with them. If you are comfortable with a certain mechanic and he can do the job at a lower price you would have another deal for yourself.

Large American Auto Manufacturers Clean Up Their Act

For years big companies have felt so confident about their place in the market that they though it cannot be shaken. But times have changed and new companies especially from far east have come to market like a storm. A shake up was well overdue in the industry but hasn’t happened until they realize that they were on the brink of collapse and even need to be rescued by government. It was a huge wake up call that required total change of corporate identity.

A new management models were required and ideas needed to be developed. The companies need to be more slick and react to ideas and get people involved. When you don’t make people valuable and listen to their ideas they may sit back and just collect the pay check month after month. Every part of the company needed to involve in the process and take responsibility. This is the way to take a firm forward and make the most of your work force.

These changes had to come and old management styles had to give way. Luckily the new management put in place was brave enough to take steps and improve corporate culture that is more in touch with itself. Otherwise, these dinosaurs of motor manufacturing were on the brink of extinction. Either they needed to change or face extinction.

general motors promotionWhen you can communicate with each other in minutes and send large files in seconds it was nonsense to have a bureaucratically chain system that hold to decision making to the grind until one or two top management could sit down in big rooms and take small decisions. They were bogged down with to many minor issues that they could not see the big pictures. Many of those decisions could have been taken in much lower levels and the outcome would have been much successful.

It is clear now that this is the direction most big companies including General Motors is taking.  They are allowing new ideas flourish and staff to become more productive. New managements are giving up their stronghold on the decision making and it is starting to bear fruit for everyone’s benefit.

Also, companies are re branding themselves and moving away from the thinking that they are big, strong and every body knows them. They are waking up from dreams that every one wants to buy their cars. They realize that they now need to go out and sell those cars. They need to create demand and public image and make people want to own their products. They need to sell prestige and inspire confidence in customers. This is how everyone else sells automobiles and this is how many companies go through tough times.

Looking at Toyota’s troubles and how the came out of it stronger is a good example. They took the chance to show how strong they are and sold a lot more cars with all sorts of initiatives and discount offers. They came out of all the bad publicity as a car manufacturer that sold millions of cars.

Understanding your Auto Insurance Policy

As long as you are putting your hand in your wallet it doesn’t matter how much it costs you. You are paying money for something that it is worth taking time and understanding it. Not every policy is the same and benefits vary incredibly. Before you put away any paper work you should make sure that it has everything you need from it. Otherwise, you may regret not checking it when you have a claim in the future. That time is too late to go back and fix things. It is the time to face the music.

It is no excuse that you may not understand the policy document word by word. Most people don’t have that kind of technical knowledge or language skills. You can still make sense of it and check that main provisions are acceptable and there is nothing to odious to worry about. Unless you ask companies are not going to go through them with you and point out every single details. They will have to assume that you know what you are buying.

auto insurance policySo, if you are struggling to understand, make notes and call your agent or broker. They will be able to explain it to you and set your mind at peace. Also, remember that there are instant dictionaries online. You don’t have to flip pages. All you have to do is to type the word plus definition and you will see it explained in front of your eyes. It is really very easy to find out about anything these days. You can even read through foreign documents using translation software easily available online.

The thing is that you can make any changes you like on your policy when you understand what it means. You don’t even need to know the name of the type of coverage. All you have to do is to explain what you want insured. They will be able to tell you how and how much it is going to cost. They are dealing with customers just like you every day and it is not a problem.

The best time to make adjustments is when you are making a purchase. This way you can see the prices as well. For example, you may get a great quote from one company and like to buy the policy. When you start asking questions you may realize that there are bits and pieces missing in a standard policy coverage. You have two options in this point. First of all, you can ask the company how much it will cost to add more coverage or expand the reach of the cover. They will be able to recalculate the premium and tell you the figure.

The second option is to find a package policy that has already provided the cover you like. Since they have willingly included certain type of cover in the policy they have provably kept the costs low. You have already got one quote and you need to compare it with another policy. First thing you need to check if they are offering the same protection. Secondly you can look at their prices and see which one works out better for you. Thirdly, you still have to make a decision as to which company would serve you better. When there isn’t huge price gap it may be better to go with the company you are more comfortable with instead of the cheaper one.