How Much Policy Do You Need? PART II

Personal Injury Protection
This is definitely one coverage you can skimp on. PIP coverage pays for the medical and funeral costs associated with an accident for you and your family — regardless of whose fault it was. But if you already have separate health, life and disability policies, you can probably forgo this one altogether. Check those policies first, but chances are those sort of expenses are already covered.

Uninsured or Underinsured Motorist
This coverage pays for medical and funeral costs for you and your family in the event you get in an accident with either a hit-and-run driver or a driver who doesn't have enough auto insurance. These policies usually cover bike and pedestrian accidents, too. Given the prevalence of uninsured drivers nationally, this coverage is essential. On average, it costs less than $40 a year for $100,000 worth and will make up for anything your medical insurance doesn't cover.

Collision and Comprehensive
Collision reimburses you for the full cost of repairs or replacement of your car after an accident. Comprehensive covers you in the event your car falls victim to a natural disaster, vandalism or theft. With either coverage, the lower the deductible you choose, the more the policy will cost you. We recommend that you always choose the highest deductible you can afford ($1,000 is fine). After all, the purpose of insurance is to protect you against big losses, not to make you whole to the last dollar. If you have an older car, you might drop this coverage altogether.

Collision and comprehensive — which can account for 30% to 40% of your total premium — are cash-value coverages. That means if your car is damaged, the most you'll recoup is the Kelley Blue Book value, which declines precipitously as your car ages. Here's a good rule of thumb: If the cost of your collision and comprehensive is more than 10% of your car's Blue Book value, it probably makes sense to drop these coverages and save a tidy sum. With most cars, you should approach this limit as the car turns five years old. Understand, however, that if you eliminate the coverages, you'll have to foot the repair bill if you get in an accident that's your fault, or if the car is totalled or stolen.

Extras
While insurance companies will try their hardest to sell you any number of extras to go along with the essentials, most of them aren't worth it. Consider rental-car reimbursement, which pays a paltry $15 or so a day while your car is in the repair shop after a collision. Not only is the reimbursement small, the odds you'll need it are remote. The chances are at least even that the other guy will be at fault, and his insurance will pay the full cost of this. Another dubious extra is towing coverage. It costs $25 or more per year on a policy, money you'd be better off putting toward an auto-club membership that would be exponentially more useful. One extra that is worthwhile: Full glass coverage. Auto glass is expensive and an errant stone can ruin a $500 windshield in the blink of an eye.

How Much Policy Do You Need? PART I

ONE TRIED AND true way to reduce your auto insurance premium is to hike the deductible on your collision coverage and skimp on your liability coverage. Sometimes this can make sense, but often it's not worth the extra risk. In this section we'll explain several of the coverages you're likely to be offered as you shop for insurance (some are mandatory). Then we'll help you figure out how much to carry of each type.

Bodily Injury Liability
This coverage, which is required in most states, compensates the driver of the other car and its passengers in the event you get into an accident. It also covers the passengers in your car. The main consideration here is protecting your assets against lawsuits that arise from auto accidents. "But I'm a careful driver," you say. It doesn't matter. You can get sued even if the accident is not your fault.

Bodily injury liability is sold in standard increments that designate both how much coverage you have per person in an accident, with an additional limit per accident. For example, if you buy bodily injury worth $100,000/$300,000, each of the people you injured could be compensated $100,000, but only up to $300,000 per accident.

How much coverage you need is a function of what assets you have to protect. If you make $30,000 a year and rent your apartment, $50,000/$100,000 should suffice. But if you make more than $75,000 a year, own a house worth $150,000 and have $40,000 in mutual funds, you should consider at least $100,000/$300,000 of coverage. Our Net Worth Calculator can help you estimate just how much coverage you should get.

How much you'll pay to increase your bodily injury liability coverage depends on several factors, including your age, marital status and driving record. It also depends on where you live. For example, in rural Cortland County, New York, a 35-year old married male would pay an average of $86 annually to boost his coverage from $25,000/$50,000 to $100,000/$300,000, according to the New York State Department of Insurance. In New York City, however, where the frequency of bodily injury is much higher, that same man would have to shell out an average of $240 more a year.

One more option: If you have substantial assets, buy $300,000 in bodily injury on your auto policy and $300,000 on the liability portion of your homeowners policy. Then spend another $150 to $300 for a $1 million umbrella policy, which covers you against all manner of liability claims. Should you want still more coverage, the cost for an additional $1 million in coverage is minimal: It's typically $75 to increase your coverage to $2 million, and then $50 for each million after that, according to the Insurance Information Institute.

Property Damage Liability
This coverage will pay for the repair and replacement of the other guy's car or property in the event of an accident. State-required minimums are as low as $5,000, but if you total somebody's Lexus, that won't begin to cover the damage.

You're better off with a minimum of $50,000 for each vehicle you own. And to be truly safe, you should have a total of $100,000 coverage.

Things to Do: Get Car Insurance

Friday is the big day, the day when Corpus Christi Police officially have the option of impounding uninsured vehicles.
The city’s impound lot is already packed with cars. However, officials at Corpus Christi city hall are looking for a new impound lot, one that could be located at a 25 acre site off of Greenwood near Saratoga.
Statistics indicate one of every three drivers in Nueces county don’t have insurance. Statewide that number is one out of five.
Corpus Christi Police Chief Bryan Smith says the new ordinance to impound uninsured vehicles is a way to help citizens out there who are protected.
“People who are lower middle class typically only have liability insurance and if someone hits them and causes them damage or injury, they have no way to pay for it,” says Chief Smith.
The goal of the crackdown is to keep repeat offenders off the street, and not go after someone who misplaced a proof of insurance.
Katy Kiser

Car evaluation to minimise insurance disputes Part I

Rajendram explained that even Bank Negara Malaysia had called for a common database to resolve this problem. “We hope to be the industry’s standard,” he said.He said ISM had been looking for a reputable car valuer to develop the website and found a credible partner in EurotaxGlass’s. It took them almost two years to complete the website. “We are very glad that EurotaxGlass’s is willing to partner us. This is the first for EurotaxGlass’s in Asia. This is their entry point in Asia,” Rajendram said.ISM has its beginnings as a project by the General Insurance Association of Malaysia. It was eventually incorporated as a company in 2005 with 35 insurers and four takaful operators as members.EurotaxGlass’s representative for the project, Information Services Pty Ltd of Australia, has developed similar websites for 31 other countries, according to its managing director of Glass’s Santo Amoddio.EurotaxGlass’s, with its headquarters in Zurich, Switzerland, has been evaluating cars for 55 years and had developed a mechanism and mathematical formula to calculate car value, he said.“Sometimes, what a dealer pays for a car doesn’t reflect its market value,” he added.Asian Auto magazine editor Daniel Fernandez said car insurers who had been over-charging and car dealers could suffer as a result of the website.“No longer can they dictate their own valuations and prices. For the first time in Malaysia, there will be a market standard,” he said.
by Kevin Tan

Car evaluation to minimise insurance disputes Part I

KUALA LUMPUR: Car owners can find out the market value of their cars with just a click of the mouse on Malaysia’s first car price online directory which may also help to end valuation disputes between owners and insurers.
The website, carprices.ism.net.my, keeps a database of every car model available in Malaysia since 1999 as well as their specifications.
By keying in the required information on the website, users will find a range of prices, from the lowest to highest, that their cars could fetch in the market.
The online directory is a joint effort between the insurance market information and technology provider, ISM Insurance Services Malaysia Bhd, and automotive business intelligence service provider, EurotaxGlass’s.
Speaking to The Edge Financial Daily at the launch last week, ISM chief executive officer Carl Rajendram said the website would provide more transparency with regards to motor insurance premiums that car owners must pay according to the market value of their cars.
He said the website could be regarded as an “independent valuer” and some insurers had indicated interest to attach the website’s valuation together with the car insurance renewal notices that they send to policyholders every year.
“We want to minimise disputes, that is our objective,” Rajendram said. Up to now, there has not been a single accepted standard database for car value and most car owners either consult car dealers or personally estimate their car value.
This causes problems as car owners could either over-insure or under-insure their cars. Those who over-insured would waste their money unnecessarily on motor insurance and those who under-insured would not be able to claim against their car’s actual value.
There are also cases of insurers not adjusting their premiums according to depreciating car value in their renewal notices. Consequently, some car owners over-insure their cars and disputes arise when they are not allowed to claim the sum insured.

Car Insurance Estimate PART II

One of the best things to do before looking for a car insurance estimate is to see exactly what the state requirements are as far as what the necessary minimum coverage is in order to have adequate coverage. This is something that might be better to do without the assistance of an insurance agency if possible because their job is to sell insurance and they make more money with the more coverage they are able to sell. In order to spend less time on the phone when looking for a car insurance estimate, it is a good idea to have a number of items handy including a driver’s license, vehicle identification numbers, make, model and year of each car and even the name and contact information for the company that is financing all vehicles if applicable. There are also a number of factors that can be taken into consideration when seeking a car insurance estimate that may mean additional savings per year. Features on each auto including airbags, auto alarms, anti-lock brakes and other things may mean discounts on auto insurance. Some insurance companies will even offer discounts for having more than one policy with their company as well as insuring multiple cars through with their coverage. Additional discounts may be found through other things like accident-free driving record, defensive driving course incentives and other discounts. Other circumstances may cost a driver more with certain companies when looking for a car insurance estimate. Men under the age of 25, single drivers, younger drivers under the age of 21, the number of miles driven per day and even the kind of car that is driven can cost a person more money on car insurance when shopping around. The best part about this is that not one car insurance will probably charge the same amount of money for the same coverage so shopping around will prove that there are better choices available

Car Insurance Estimate PART I

Shopping around for a car insurance estimate is not something most people look forward to. It is one of the least exciting chores that is required in order to have a car on the road, but it is worth seeking out the most competitive car insurance estimate available. Although getting a car insurance estimate from a number of companies isn’t a desirable task; many people spend far more than they absolutely have to each year on their auto insurance because they simply haven’t taken the time to compare rates and policies with other auto insurance companies. It would be hard to find someone who would walk into an appliance store and decide to spend $200.00 more on a washer that offers the same exact quality and features as the one next to it that costs far less. It doesn’t make too much sense to do the same thing with car insurance. Most of the time, a car insurance estimate will include collision, liability and comprehensive coverage on a vehicle. Most households have two or more vehicles and every car should be included when seeking out a car insurance estimate. There are a few things that can be done to make getting a car insurance estimate easier and more accurate especially when dealing with more than one car insurance company.

Auto Insurance Rates

will vary depending on the insurance agency, your driving record, and the type of insurance you are looking to purchase. I you are looking for affordable car insurance or truck insurance then read on.
There are ways to reduce your premiums without giving up coverage. One of the easiest things to do is get auto insurance rate quotes online. This will allow you to comparative shop stress free.
Raising your deductibles is the easiest way to reduce your rates. The higher the deductible, the lower the premium will be. The deductible is the portion you will have to pay in the event of accident, before your insurance coverage steps in. It’s important not to carry a deductible that’s more than what you are able to pay. Your insurance company will not honor its portion of the claim until you’ve paid your deductible. However, the higher your deductible the lower your premium cost will be, so you need to find a
Always remember to ask your insurance broker for any available discounts. Quite often we forget to ask and they don’t seem to volunteer the information. A clean record on the current policy for a certain period of time, having your homeowner's coverage with the same insurer, taking a defensive driving course, having an accident free driving record, and having an approved anti-theft device will reduce your auto insurance rates.
The type of car you drive can also reduce your rates. Stay away from cars that have a high class rating. Rates vary among the different makes and models of vehicles. The different rates are based on the risk of accident, cost to repair, higher theft rates for a particular model and replacement costs such as with a new vehicle. So be sure your vehicle isn’t going to be in a category that increases your rates too much.
A safe driving record consisting of no accidents and no traffic violations will get you the most substantial discount. Most insurance companies are very good at recognizing good driving habits. These are the drivers they want to insure because their risk is much lower.
If the car is old and not very valuable, comprehensive insurance is probably not worth buying as it can quickly add up to more than you’d ever receive in the event of an accident. You can save up to 20% by eliminating collision insurance. You may want to opt not to carry collision insurance as well which can save you and additional 20%.
Check around to make sure you are getting the best auto rates you can. Online auto insurance shopping has taken the guess work out of buying insurance and you can very quickly see if you are being hosed. So if your insurance is coming due now is the time to start shopping!.

Car Insurance - How Can You Lower Your Premiums?

Many factors influence the premium for your Motor insurance policy. Your insurer will have asked you many questions whilst producing your quote - some of which will affect your premium and some will not. Below we discuss the key variables that are within the policyholder's control.
Consolidating policies
By insuring a number of vehicles with the same insurer, or by trying to take out home and life insurance through your car insurer, you may be able to secure a ‘bulk buy’ discount.
Location
A big influence on the cost of your car insurance is where you live. The chance of your car being broken into or stolen is a key concern for the insurer. More urban areas traditionally facing greater risk of theft and therefore tend to be more expensive than countryside locations.
Excess
By agreeing to pay a greater excess on each claim you can reduce your car insurance premiums. This is because you are reducing the liability of the insurer and therefore in return they are able to offer you a lower premium.
Your Vehicle
The cheaper and slower your vehicle the lower your premiums are likely to be. If you are looking to buy a new vehicle make sure you fully consider the cost of insurance – you may be able to buy the car but can you afford to run it?
Mileage
You can control your insurance premiums by restricting your annual mileage. However, be aware that if you exceed the restricted number of miles you'll then become uninsured!
Parking
Where you park your vehicle overnight is also very important to the insurers. If it is kept in a locked garage, you should be offered a lower premium than if you leave it unattended in the street.
Security
Security devices that prevent or hinder theft may also reduce your premium. Common examples include alarms and immobilisers, however, be aware that as we improve the quality of our security devices the thieves just become better at bypassing them.
No Claims Discount
Save up your no claims discount by avoiding making small claims upon your policy. After a set number of years, 4 or 5 typically, you'll often be offered the option to pay an additional small premium to protect your no claims bonus. This can prove very helpful if you subsequently end up having an accident.
Advanced driving skills
By taking an advanced driving course you may also be able to reduce your premiums. The Institute for Advanced Motorists and the Royal Society for Prevention of Accidents each offer membership which provides you with discounts for both the cost of driving courses and your car insurance premiums. Two key variables NOT within the policyholder's control.
Your Sex.
Women are statistically less likely to have an accident and, if they do, it's less likely to be serious. Because of these statistics women benefit from lower premiums. It is also worth noting that if you represent one half of a couple you should consider having the female as the primary driver with the male as the second driver.
Your Age
The older you are, the less likely you are to make a claim. As a result insurance companies charge lower premiums for more mature drivers.
One final piece of advice.
A large percentage of car insurance is now sold on the Internet. That's because it's convenient and cheap. Many insurers now give a further 10%-15% discount if you buy online.
by: Michael Challiner