Archive for the ‘Auto Insurance Rates’ Category

Telematics Auto Insurance: What Does This New Technology Mean For The Future?

Thursday, May 10th, 2012

In George Orwell’s 1984, all daily activities were overseen by a seemingly omnipotent being known as “Big Brother.” Telematics auto insurance seems like one step closer to “Big Brother” watching over us. Yet, on the other hand, telematics may also be the key to reducing the number of car crashes and also reducing our auto insurance premiums.

What Is Telematics?

Telematics involves satellites tracking a person’s driving habits — including the miles driven, the amount of time spent behind the wheel, as well as braking and acceleration patterns — to calculate a safe driving score. The score is then used to determine how much you should pay in auto insurance. While it may sound fanciful, this technology is already quite popular in Europe, as more and more drivers voluntarily agree to put this black box in their car to gain access to lower insurance rates. In America, companies like Progressive are just starting to offer this type of car insurance.

Is Telematics The Future Of Auto Insurance?

According to research firm Celent, the technology “radically reduces the frequency and severity of motor vehicle accidents,” so insurers see reduction in their revenue — from about 39 percent down to 13 percent. The firm adds that, in addition to telematics, it’s believed the next 10 years will hold more cars outfitted with collision avoidance equipment, more automated traffic law enforcement, and (to a lesser extent) robot cars.

Do People Really Save With Telematics Auto Insurance?

Drivers with a safety score of 4/5 save about 15 percent on their premiums, according to the UK website This Is Money. Those who score a 1 or 2 may wind up paying 20 percent more. Two-thirds of customers are estimated to save with reductions as high as £800 ($1,287).

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Best Auto Insurance For College Students

Monday, May 7th, 2012

Statistically speaking, younger drivers get in more accidents. Drivers under 24 account for 13.2 percent of all motor vehicle crashes, according to the Census Bureau. Worse yet, 13,957 of those crashes involving young drivers are fatal, and accidents are the leading cause of death for young people. So naturally, auto insurance companies will charge you a higher rate. I know… it sucks. But the good news is that there are still ways to keep what you pay for insurance relatively low.

Choose A High Deductible.

Opt for the $1,000 deductible, rather than $500 deductible if you can. Sure, you’ll need to pay $1,000 out-of-pocket if you get into a crash, but you will pay much less over the course of the year if you don’t smash your car. It’s much cheaper to stash money away in an emergency fund.

Drive A Safer Car.

A four-door sedan or a van with a high safety rating will get you the lowest auto insurance premium. It may not be the hot rod that gets all the girls, but at least you’ll have money to take them on dates.

Pass On Collision.

If you bought that new car, then you’ll definitely need collision insurance. However, if you’re driving a clunker worth less than $3,000 that’s already paid off, then you can skate by without collision insurance. If you get into an accident, your car will just be totaled, since the cost of repair would be higher than the car is worth. Besides, you can just buy a new clunker with all the money you’ll save.

Get Good Grades.

The most popular program is the State Farm Good Student Discount, which cuts your rate by 10 – 15 percent if you have a 3.0 GPA or higher.  Other companies like Mercury, Allstate, Progressive, Geico and other companies offer this discount on auto insurance for students as well.

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Auto Insurance Savings Tips

Friday, May 4th, 2012

Auto insurance can be ridiculously expensive if we let it! As we discussed yesterday, one person might be paying $585 a year, while another pays over $2,000! So what is a driver to do if he or she wants to chip away at these exorbitant prices?

Strategies For Reducing Auto Insurance Premiums

  • You could shop around. Now is as good a time as any to take a look at what another auto insurance provider might offer you. Every company looks at different factors to come up with your total premium. (For your convenience, you can search free quotes right from our site!)
  • You could reduce your coverage.  This could be dangerous, especially if you are reducing liability coverage, but you may be buying more coverage than you really need. For instance, there is no need to have high collision coverage for an old vehicle that is already paid off and isn’t worth repairing if it gets into an accident.
  • You could raise your deductible. This is a good option if you have $1,000 or $2,000 in the bank. Raising the amount you’ll pay in the event of an accident will lower your premium, guaranteed.
  • You could bundle your insurance needs. Most insurance providers will offer you a handsome discount if you get your homeowner’s insurance, life insurance, and car insurance all from the same place.
  • Drive safely! Avoiding accidents and tickets is the best way to keep your rates as low as possible.

Choose Your Car Wisely

The type of car you’re insuring very much factors into your rate as well. When buying a car, consider these factors:

  • Insurance loss records: Insurers want to know how much money they’ll lose if your car is totaled in an accident. Check The Highway Data Loss Institute to see how your car stacks up!
  • Price: More expensive cars with more expensive parts will cost more to insure.
  • Performance: Choose a vehicle with less horsepower and a smaller engine if you want to pay less.
  • Safety Features: You pay less on a vehicle with more safety features installed and a better overall safety rating.

There are other ways to save as well.

Hybrids can save you money in some cases. New cars cost less to insure if they are endowed with better safety features than your old clunker. However, you may also save by insuring a used car because the gap insurance will be less, since you are not experiencing the same rate of depreciation as a new car. Don’t forget to shop around for the best auto insurance rates!

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Illustration by Adam McCauley

Auto Insurance Payments Are More For The Poor, CFA Says

Thursday, May 3rd, 2012

A new study by the Consumer Federation of America found that America’s poor are being overcharged for their auto insurance. These findings apply to 40 percent of Americans with annual incomes below $40,000. The CFA says they were legitimately surprised by how badly auto insurance companies treated their low-income clientele.

How Much More Do The Poor Pay For Auto Insurance?

Each state has its own minimum liability coverage law, but there are many other factors that can drive up a person’s auto insurance costs, including type of vehicle driven, age, and driving record. Unfortunately, many safe drivers who have no accident record and who drive very few miles are being charged hefty rates. Take, for instance, a 30-year-old executive (with a perfect driving record and 20-mile daily commute) living in an exclusive St. Louis suburb whose auto insurance rate is only $558 per year. A poorer person with the same perfect driving record and habits could end up paying $2,095 a year for the same level of coverage!

Here’s How…

  • He’d pay $60 more if he needed to pay installments, instead of lump sum.
  • He’d pay $71 more if he only has a high school diploma, rather than a college education.
  • He’d pay $84 if he had been unemployed at some point this year.
  • He’d pay $337 more if there was a time when he didn’t have a car.
  • He’d pay $347 more if he lived in a lower-income zip code.
  • He’d pay $638 more if he suffered a period of being uninsured for whatever reason.

Worse yet, states like Arizona, Texas and Arkansas charge drivers higher premiums for selecting the minimum state coverage levels, rather than the higher liability coverage wealthier drivers can afford!

What We Can Do

The CFA has suggested several necessary reforms, such as:

  • Lowering the minimum liability requirements and the rates associated with them
  • Establishing a low-income auto insurance program
  • Including other risk factors — like miles driven — which might lower rates for low-income motorists

However, the best thing that you can do is to shop for better auto insurance rates through our free quote system!

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How Does Credit Score Affect My Auto Insurance Rates?

Tuesday, May 1st, 2012

Did you know that there are 46 states that look at your credit score before determining your auto insurance premium? Only California, Hawaii, Massachusetts and Maryland are exempt, in fact. The reason auto insurers look at your credit score is that many companies believe people with better credit tend to get into fewer accidents and engage in less risky behaviors.

Other Factors

In addition to your credit score, an auto insurance company will also look at the type of vehicle you’re driving, your age, where you live, what safety features are installed on your vehicle, and your past history of tickets / accidents. Each insurance company has its own formula for calculating risk, which is why it often pays to get free auto insurance quotes and shop around the different rates available to you.

Factors Affecting Your Credit

The good news is that you can work on improving your credit score, which will not only lower how much auto insurance you pay, but also how much interest you pay on your credit cards and loans as well. Credit scores are calculated using the following factors:

  • 35% is based on your payment history
  • 30% is based on how much credit you have available to you
  • 15% is based on how long you’ve had credit history
  • 10% is based on the amount of debt you’ve accumulated over the last year
  • 10% is based on what type of credit you have.

How To Improve Credit

  • Do not miss any minimum payments on your credit cards or loans. Don’t by late by even one day!
  • Try to pay off more than your minimum monthly payment. Aim to pay everything in full by the next pay period.
  • Try to keep your credit usage down to 30% of your total credit limit or less.
  • Do not apply for numerous credit cards and loans within a short period of time.
  • Mix up your portfolio to include one long-term loan (like a mortgage or car payment) and a few credit cards.
  • Do not close out old credit cards, as that will decrease your access to capital.
  • Get a free copy of your credit report annually to look for errors.

Don’t forget to shop around for better auto insurance rates, whether you have good credit or not!

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7 Most Common Auto Insurance Claims & What They Cost

Monday, April 30th, 2012

Learning about the most common auto insurance claims can save you money. Since auto insurance premiums are based on the total pool of drivers and all the claims filed with a particular company, rates can vary dramatically from provider to provider — but can also be lowered if each driver takes precautions against the risks.

 #7: Animal Collisions

According to MSN Money, the average cost of damage from hitting a deer is $3,171.

#6: Vandalism

According to eHow, the average cost of cosmetic damage by vandals is $100-$300, so many people pay out-of-pocket for these expenses, rather than deal with the cost of their insurance going up once a claim is filed.

#5 Theft

Allstate says the average cost of a stolen vehicle is around $6,649. You can expect a much higher premium after this! Many drivers opt to install additional security features to protect themselves from this crime.

#4 Windshield Damage

CostHelper says the cost of a new windshield ranges from $157 to $324. Crack repair is usually less than $100. Beware of offers to “fix your windshield for free,” as these companies often inflate the repair costs and result in higher insurance premiums.

#3 Back Injuries

Lawyers fight to get these claims paid out as high as possible! Peterson Law Offices estimates that settlements range from $900 to $115,000.

#2 Whiplash

According to the Whiplash Prevention Campaign, whiplash claims cost the US a total of $29 billion annually.

#1 Fender Benders

Small fender benders where no injuries are reported are the most common type of auto insurance claim. According to MSNBC sources, the average repair cost is a whopping $2,000!

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Auto Insurance Myths

Monday, April 23rd, 2012

There is a lot of misinformation about auto insurance circulating around. Chances are, you’re not even sure where these false beliefs come from, but you’re not alone in your thinking. Having a realistic view of what your auto insurance policy does or doesn’t cover will protect you from a costly misunderstanding down the road.

Myth #1: The color of your car affects insurance cost.

A Progressive Insurance survey found that 25 percent of drivers mistakenly believe that red cars are more expensive to insure. However, you’ll find that color does not even come up when you are applying to get auto insurance quotes. That same survey also found that people thought their sunroofs, speaker systems and tinted windows played a role in the cost of insurance — though, in reality, these features do not factor in at all!

On the other hand, consumers were not aware that other features may impact their auto insurance rates, including:

  • The weight of the vehicle
  • The cost of the vehicle
  • Whether the car has two or four doors
  • If the vehicle is a convertible.

Myth #2: People who drive sports cars pay higher premiums.

Many drivers presume that driving a sports car signals that they’ll likely get more speeding tickets — so, therefore, they can also expect higher premiums. However, Quality Planning Corp’s list of “cars with the most violations” found that the Mercedes-Benz SL-Class convertible is the only sporty car that lives up to its nefarious reputation. In fact, the vehicles most likely to get busted include Hummers and Scions. The Jaguar XJ and Mazda 6 are actually two of the vehicles least likely to be ticketed.

Myth #3: Thieves like to steal newer, more expensive cars.

It may surprise you, but a 2010 National Insurance Crime Bureau “Hot Wheels” report confirms that the most commonly stolen vehicles include the: 1994 Honda Accord, 1995 Honda Civic, 1991 Toyota Camry, 1997 Ford F-150 pickup, 2004 Dodge Ram pickup, 2000 Dodge Caravan, 1994 Chevrolet pickup, 1994 Acura Integra, 2002 Ford Explorer, and 2009 Toyota Corolla. Not only are these vehicles easier to steal, but they are also most commonly scrapped for parts and the more common cars are in higher demand.

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You won't necessarily be paying more for this RED car, but a two-door versus a four-door will cost you more! Get free auto insurance quotes today to see what matters most in factoring your rates!

Auto Insurance Tips: What To Do About An Uninsured Motorist

Friday, April 20th, 2012

You may be the type of person who plans for everything. Perhaps you drive an expensive car and you have top-of-the-line auto insurance. If you ever caused an accident, you are certain that everything would be perfectly covered. However, what if you are slammed by an underinsured or uninsured motorist? Some people choose to purchase additional uninsured or underinsured motorist coverage to cover the difference in medical costs and property damage repair that is not caused by the other driver’s liability insurance policy.

For Example…

Say you get into an accident that totals your $25,000 vehicle. However, the underinsured motorist only carries $10,000 in property damage liability insurance. If you had uninsured or underinsured motorist coverage, then it would cover the remaining $15,000. Even though each state has a mandatory minimum coverage stipulated, it is often not enough to pay for all the damages, which is why many motorists opt for excess coverage to be on the safe side. Drivers who live in states with the lowest liability requirements — including California, New Jersey, Pennsylvania, Florida, Massachusetts and Ohio — will especially want to make sure they carry auto insurance for underinsured motorists.

Filing Underinsured Motorist Claims

The first thing you should do in an auto accident with an uninsured or underinsured motorist is get the person’s name, address and driver’s license information. Next, you should file a police report to have both sides of the story put on record. Lastly, you should hire an auto insurance attorney to make sure the other motorist is determined to be at-fault if that was the case.

Compare Auto Insurance Quotes.

Our auto insurance quote system will help you compare the cost of uninsured or underinsured motorist coverage in your state. Shopping around is the best way to ensure you are getting the best insurance for the least amount of money in this buyer’s market.

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