The Basics of Umbrella Insurance

Posted on Feb 12th, 05:03 am, under Auto Insurance 101

Is umbrella insurance the right kind of coverage for you? If you own more than one vehicle, it very well might be. But what is umbrella insurance, anyway? Let's take a closer look.

Basically, umbrella insurance is a form of coverage that protects a whole range of assets owned by an individual or an entire household. The main benefit of getting this kind of insurance policy is that all of your necessary insurances are gathered under one convenient "umbrella". This way, you can prevent redundancies and get discounts for your coverage.

Umbrella insurance is a good choice for business owners or those who possess a large set of assets where public liability can be a factor - for example, if you own and operate a whole fleet of vehicles. It's an even better idea if you already have several different policies for these assets. Compare the total cost with that of a single liability umbrella, and see the difference.

To ensure that you get adequate coverage with this form of insurance, compare various rates and see which company can offer you the best deal. Umbrella insurance is supposed to cover damages that go beyond the normal limits of a policy, so it's a very smart investment. 

To save even more, you could also try raising your deductible. There are several factors to weigh before you do this, but you'll end up paying less each month in the end. To find out what your "sweet spot" is, check our article here. 

Keep an eye out for discounts as well. They're widely available if you know where to find them. Auto insurance providers offer discounted rates for married couples, senior citizens, good students, and so on. Ask around and do your research before committing to one provider for your umbrella insurance.

Don't forget to check your credit rating when buying coverage. Auto insurance providers use your credit history as a way to measure their level of risk in covering you; the better it is, the lower your premium will be. You can get a one free copy of your credit report each year at AnnualCreditReport.com. If you've already gotten your free credit report, read up on how to get more copies here and here.

If you're uncertain about how much umbrella insurance you'll need, just talk to your insurance agent about it or check a good online insurance quote provider. You may be a good candidate for this type of insurance, so don't pass up this chance to save yourself a lot of money.  

Even More Ways Your Car Could Get Stole

Posted on Jan 31st, 10:29 pm, under Auto Insurance 101

We talked about the various sneaky methods that car thieves have at their disposal before. So you can protect yourself against theft, we take a look at some more commonly used tactics: 

1. Getting your back-up set of keys that you hid in your car. Many owners leave a second set of car keys in a magnetic box attached to their vehicle's underside. Obviously, this is a bad idea; thieves are familiar with all the usual hiding places.

2. Obtaining your personal information from your car's registration, title, or any documents with your home address on them. When you leave your vehicle, always bring your registration and insurance papers with you, and don't leave any personal information inside.

3. Getting your vehicle's specific information and have a replacement key made by the car manufacturer. The most common countermeasure for this is getting vehicle identification number (VIN) etching on your windows and windshield. However, this doesn't deter most thieves from stealing your car, so don't rely solely on this tactic. Drop your business card into your door frame through the window slot to identify your vehicle as yours, in case it gets stolen.

4. Stealing unattended, running cars while owners are dropping off the kids, using the ATM, etc. No matter how quick you think your errand will be, never leave your keys in the ignition. You want to make it as tough as possible to steal your car, so why would you give them a golden opportunity by leaving it unlocked and running? 

5. Waiting outside grocery parking lots, movie theaters, and sporting events, looking for the best car to steal. These areas are prime "hunting grounds" for car thieves, since they offer a large variety of potential targets with minimal security. As much as possible, park your car only in areas with security measures or parking attendants. If you can't do so, park as close as possible near the entrance to increase the chances that there will be a witness in case of car theft. Don't park in the far-off, dark corners of the lot, that only works to the thieves' advantage.

It can't be stressed enough: more often than not, car theft is a crime of opportunity. Of course, if a thief is really bent on stealing your car in particular, he'll do whatever it takes no matter how many deterrents you put in his way. But if you can make it really inconvenient or risky for him to steal your car, this will hopefully discourage him from going through with the theft. 

Anti-theft measures such as car alarms are a good first step, but your precautions shouldn't end there. Use the above tips to make it as difficult as possible for thieves to take your property. A proactive approach to security is always the best way to deal with thieves. 

Three Things You May Not Know About Your Auto Insurer

Posted on Jan 31st, 10:28 pm, under Auto Insurance 101

Buying auto insurance may seem like a straightforward thing: look for the deal that offers the features you want, for a price that you can afford. However, there are many other factors at play behind the scenes that customers are frequently unaware of. These are just a few of the tricks of the trade that buyers should know before they purchase auto insurance:

1. What agents are paid affects what they tell you.

Agents can help you make sense of auto insurance policies, but don't think they have your best interest at heart. The bottom line is that they're paid to sell you their products. Insurance firms offer agents two types of commissions: "steering commissions", which they get for successfully directing consumers to a specific insurance company; and profit-based commissions, for when customers don't file lots of expensive insurance claims. 

What are the potential issues with these? Profit-based commissions gives unscrupulous agents an incentive to discourage or delay claims. Steering comisions, on the other hand, can make them force certain policies on customers in order to get bigger commissions. Therefore, next time you buy a policy, ask agents to explain why they're recommending a certain plan and inquire about their commissions as well. 

2. Younger drivers are charged extremely premiums.

Insurance companies consider teenagers and drivers under 25 a high-risk group, especially males of this age. They get charged higher rates, as we've pointed out before, but what you may not know is that this can be almost 100 percent more than drivers between 60 and 74 (according to InsuranceRates.com).

There isn't much you can do about this, since insurance firms all over the country go by these general standards. Typically, younger drivers will need at least three years of experience if they want to avail of lower rates. It helps, however, to use cars with lower engine capacity and to complete a defensive driving course. And whatever you do, don't use a sports car. Ask your insurance provider about how you can further lower rates for younger drivers.

3. Your auto mechanic? That's their mechanic.

Like medical insurers and HMOs, auto insurers have their own affiliates among car repair facilities. So if you ever get into an accident, your insurance firm will refer you to their list of "preferred providers". What's more, some large auto insurers, such as Allstate, have even gone so far as to purchase their own nationwide chain of auto repair shops.

Of course, in almost all cases, it's still your choice whether you want to use your insurer's auto repair shop or not. It can be convenient to do so, and you can usually get your deductible waived or reduced. However, there's an incentive for these preferred providers to cut corners, since they're under pressure to keep repair costs low. Therefore, make sure you ask an independent inspector to examine the repairs and ensure that your car got what it needed. 

Five Ways Your Car Could Get Stolen (And What To Do)

Posted on Jan 22nd, 01:13 am, under Auto Insurance 101

According to the Insurance Information Institute, a car gets stolen in the United States every 24 seconds. It's an unfortunate truth that no matter how many types of anti-theft devices come out each year, auto theft still remains a thriving industry. 

This is not to say that you shouldn't bother using a car alarm. Besides lowering your insurance premiums, car alarms are still a necessary measure, provided you use them well.

So let's say you've already covered the basics: you've installed anti-theft protection and you're driving a model that doesn't attract thieves' attention. What else is there to do? Here are five of the most common car theft methods thieves employ. Get familiar with them so you can take the necessary precautions:

1. Cutting your steering wheel. If you use a steering wheel lock, car thieves can easily overcome this simply by sawing through the wheel itself. To prevent them from actually taking your car anywhere, it's more effective to use a starter disable switch. Make sure you keep it in a place only you can access.

2. "Accidentally" bumping your car. Car thieves will often bump up against a car to check if it has an alarm. And since car alarms these days are set off by practically anything, people have learned to ignore them when they go off (ironically). Instead of using a motion-sensitive device, use an alarm that pages you as soon as it's activated.

3. Breaking windows. This is one of the most common methods of entry. Alternatively, thieves may also jimmy your lock open. Don't tempt them by keeping your valuables inside your vehicle in plain sight. Always bring them with you, or if you can't, keep them out of sight (in the trunk, for instance). If your car stereo has a removable faceplate, take it with you instead of stowing it in your glove compartment.

4. Deactivating car alarms. Thieves will look for any exposed wiring that they can cut in order to disable your anti-theft alarms. The remedy lies in having your car alarm put in by a professional installer. If you can find a reasonably shady one, so much the better. Retail store employees don't know how to install your alarm in such a way that makes it harder for criminals.

5. Checking your car stickers. It's always a bad idea to display car decals that advertise what kind of alarm you have in your vehicle. This gives thieves a lead on how to disable your alarm. Furthermore, don't put any stickers that display the kind of audio system you've got; you'll only make it a more tempting target for theft. Use a hood lock cable so that they can't access your car battery or alarm mechanism.

Come back next week for more tips on how to counter car theft. Until then, stay smart and stay safe!

The Most Common Auto Insurance Scams

Posted on Jan 12th, 05:59 pm, under Auto Insurance 101

Have you ever been in a car accident? You may not have realized it then, but you may have been the victim of an insurance scam. All over the country, car accidents are set up and faked by experienced con men and fraudsters in the hopes of cheating insurance companies out of thousands of dollars in damages.

To guard against these scams, insurance companies spend millions of dollars every year. And the worst part is that it's not the insurance providers who shoulder the burden -- it's you, the honest consumer. Since there is no law that forces them to shoulder the burden, insurance companies pass the costs of fraud on to their customers by raising premiums across the board. 

Con artists usually rehearse their fake "accidents" carefully before they put them into action. Learn to protect yourself against auto accident fraud by familiarizing yourself with their techniques. Here are some of the most common scams:

1. The Swoop and Squat - In this scheme, the scammer's vehicle will suddenly swoop out in front of the victim's car and abruptly stop (or squat). An accomplice quickly moves alongside the victim's car to keep it from leaving the scene. Then, the passengers in squatting car will all claim injuries from the "accident", which will be supported by a chiropractor or doctor who is also in on the scam. 

2. The Fake Helper - This may happen to you after a genuine accident. If a stranger offers to help you with an accident's aftermath by suggesting a particular lawyer, doctor, or repair shop, beware -- it could be a trap. The doctor may give you fake treatment (or even none at all); the repair shop will probably inflate your repair cost; and the lawyer may even tell you to sue the insurance provider.

3. The Drive Down or Wave - This deceptively simple scam is easy to fall for. In a situation with a lot of traffic or one that involves merging lanes, the con artist waves the victim on, indicating that he's yielding the right of way. Just as the victim enters the lane, the con artist suddenly accelerates and hits the victim's car. When the traffic police arrive, he will state that he never gave the victim the right of way in the first place.

4. The T-Bone - This particular scam requires careful timing on the part of the fraudster. As your car passes an intersection, the fraudster will deliberately run into it with his car. Then, when the police arrive, accomplices posing as witnesses will tell the officer that you ran a red light. This is most effective when there are no genuine witnesses who can contradict the accomplices' fake accounts.

5. The Sideswipe - A scam that's insidiously simple to fall into. At intersections with multiple turn lanes, take care not to drift out of your lane when turning. A scammer in the lane next to you will speed up on purpose so that you hit their car. This can already be considered a sideswipe, and because you were the one who strayed outside your designated lane, the scammer has a claim against you and will often pursue this along with personal injury claims.

So now that you know about the most common techniques that scammers use, what do you do next? In the case of any accident, the best thing to do is get sufficient documentation. If your mobile phone has a camera, use it. Otherwise, keep a disposable camera in your glove compartment. Take pictures of all the vehicles involved. Have pen and paper handy, so you can record any important information about drivers, passengers, and witnesses. Read more on what to do after accidents here.

Make sure you take note of vital details. Were all parties involved wearing seatbelts? Did the injured parties act like they were injured as soon as they got out of the car, or only after the police arrived?

If you think that you're being scammed, or if you've witnessed fraud in action, call your insurance firm as soon as possible. And most importantly, don't forget to call the police! Don't let scammers convince you into leaving the authorities out of the matter. Finally, always drive responsibly in order to avoid accidents in the first place. 

What Is Accident Forgiveness?

Posted on Jan 7th, 03:45 pm, under Auto Insurance 101

With the economic recovery still in doubt, money is still tight for many people, especially for those who lost their jobs in the past year. The last thing you want is to get into an auto accident that will cost you thousands of dollars in damages and premium increases. This is why it's as good a time as any to check if you're eligible for accident forgiveness.

Accident forgiveness is a special feature that some auto insurance companies offer, and it's become a key selling point in recent years. Basically, what happens is that your insurance provider "forgives" you for your infraction, in addition to ignoring any adverse effect it may have had on your rates. This concept has been around for several years already, but it has steadily gained prominence in recent times.

Of course, in practice, the whole thing isn't that simple. The conditions for accident forgiveness depend on your particular insurance provider. State laws may also influence the cost and availability of this insurance feature. And lastly, even if your provider offers accident forgiveness to its customers, you don't automatically get it right from the beginning. You need to actually qualify for the benefit first.

Usually, insurance providers that offer accident forgiveness (like Allstate, for example) have a minimum requirement: 5 years of clean, accident-free driving. Several other requirements may be imposed as well, as stated above. 

With accident forgiveness becoming increasingly popular, you'll probably see it offered more often as an add-on to insurance policies. This feature can really save you a lot of money, if you're willing to invest in its benefits. By paying a little extra every month, you can protect your low rates from a potentially big increase, should you get into an accident. 

Some companies include accident forgiveness as an automatic addition to all policies that meet their standard, so you might want to re-read your contract to see if you've got it already. Other companies might even offer it as a free addition at no extra cost. Once again, the benefits vary from firm to firm, so ask your provider for more details. 

Buyer Beware: Auto Insurance Scam Tactics

Posted on Jan 7th, 03:37 pm, under Auto Insurance 101

All drivers are required by law to purchase car insurance. This means car owners set aside millions of dollars every year for regular insurance payments. With that kind money going around, it also means that the industry is rife with insurance scams and fraudsters. This is why it pays to be familiar with the common tactics that scam artists use before buying auto insurance.

1. Fake insurance policies

You don't need to look hard to find frauds. Insurance scammers place advertisements for cheap car insurance online and in papers, and many go so far as to rent offices in order to appear as reputable and real as possible. Invariably, someone takes the bait and pays for a fake policy and insurance card. Usually, victims only find out that their supposedly "legitimate" auto insurance is a fake at the worst of times: during an accident, when they're pulled over by police, or when they register their vehicle. This puts them into even deeper legal and financial trouble.

One thing to watch out for when buying coverage: see if the agent issues insurance on his or her own. Technically, they're not supposed to be able to do that, because as "agents" they only represent the insurance company, and thus they don't have the authority to give you a policy then and there. 

2. Novelty and fake insurance cards

It doesn't matter whether you're carrying a fake insurance card either unknowingly or on purpose, you're just as liable either way. Using a fake insurance number carries a risk of felony, entails huge payments in the event of accidents or injury, and raises insurance costs for honest drivers. 

3. Lowballing

While hunting around for the best insurance deal possible, you see that one company offers a rate that's much lower than anything else on the market. Then, once you've signed up and paid them, they tell you that there was a "company rate error" and that your real premium is so many dollars higher than the original price you were given. 

Avoiding this kind of lowballing can be tricky, but one tip is to check if they offer free coupons or processing vouchers. If you're dealing with an ethical, reputable company, it won't have to resort to these schemes to get your business.  

4. Offering insurance quotes in exchange for personal information or money

Fraudsters often call potential victims and offer a free auto insurance quote in exchange for personal information. This is a favored method for identity theft. Don't fall for it. The only thing you need to give to get an actual quote is the details about your car. In addition, if they tell you that you need to pay a fee before you can get a quote, walk away. Almost all reputable companies offer their insurance quotes for free nowadays. The only thing you need to pay for is the premium, not the quote. 

In general, if you're uncertain about buying auto insurance, steer away from companies that nobody has heard of, or those with no background you can research. If you're dealing with a new company, ask current customers for their opinion on the service. The more information you can get, the better.

If you want to be really sure, you can always buy your coverage from one of the big corporate auto insurers, such as State Farm and Geico.

Using a fake auto insurance policy is a crime, whether or not you were willfully doing so or not. The potential legal and financial problems far outweigh any benefits. Remember, always do your research and get as much information and confirmation on your dealer before signing anything binding. 

How to Change Your Insurance Provider

Posted on Dec 9th 2009, 03:46 pm, under Auto Insurance 101

A few weeks ago, we talked about the benefits of changing your auto insurance provider. There are several different reasons why you might do this. You may have found a company that offers the same coverage for less money, or your current provider doesn't give you satisfactory service. If you want to get the best insurance for your money, it really pays to reassess your coverage every few years and shop around for better deals on insurance.

Whatever your reason, once you decide to switch, you'll find that changing companies is relatively easy. However, the process does contain potential pitfalls if you're not careful. Here's what you have to do, step by step:

1. The most important thing to do, as mentioned in our previous article, is to ensure that you already have a new policy with your new provider before you cancel your old policy. If you forget this crucial step, it's considered a lapse in your auto insurance coverage. This can seriously damage your credit rating. In addition, a lapse in coverage is against state law, and you will probably face a heavy fine as a result.

2. Email or write your former insurance provider and tell them to cancel your plan. Ask them to provide you with a dated letter of confirmation as well. To prove that you already have new coverage, give them the name of your new insurance provider and the number of your policy with this firm. Otherwise, your former provider will have to report you as an uninsured driver to the Department of Motor Vehicles, as required by law.

Never walk away from an old insurance policy without canceling it formally. If you don't notify your provider, you'll just be billed continuously and your coverage will be canceled due to your failure to pay.

3. Try to cancel your old policy before the renewal date. This way, you won't have the additional hassle of getting back the unused portion of your premium. However, if you cancel your policy after the renewal date, remember that they owe you a return premium. Follow up with your old insurance company for this amount. The downside is that they may return it with a 5 to 10 percent surcharge (otherwise known as a short-rate return premium).

4. Finally, replace your insurance ID cards. If you replaced your old policy in mid-cycle, your auto ID cards will still have the original expiration date on them. Change these out for new cards as soon as possible. This way, you'll have valid identification in case you get into an accident. 

What You Need To Know When Insuring Imported Vehicles

Posted on Dec 9th 2009, 03:41 pm, under Auto Insurance 101

Buying an imported car usually carries more costs than just the one on the price tag. Insurance for imported vehicles can be expensive, and not all insurance firms provide coverage for them. Like vintage cars, imported cars have special requirements that you'll need to meet. We've made a short checklist of the things you'll need before you can insure an imported car:

1. One of the first things to do is to ensure that your car passes US auto standards, such as safety and emission tests. Some car models brought over from abroad (notably Mexico) may not meet US legal standards, and are therefore ineligible for insurance. You may have to spend on additional improvements for your car to meet these requirements. Consider this before buying any car abroad.

2. Naturally, you'll also need to get your car through US Customs. Before you can get any form of insurance, you'll have to present proof to insurance providers that you paid the necessary duties and taxes to bring your vehicle into the country legally.

3. Your car will also have to get an undercarriage wash before it can be allowed entry into the country. The US Department of Agriculture requires this precaution to prevent foreign pests and weeds from entering our domestic ecosystem. 

4. Remember that if your car fails to meet US standards or any one of the above requirements, it must be sent back, brought into compliance, or destroyed.

5. Unfortunately, many mainstream insurance providers won't insure imported cars. You'll need a firm that specializes in imported vehicles. Imported cars cost more to insure than domestic vehicles because they are usually expensive models, thus raising their premium; their parts are not easily available; their safety standards are usually below the domestic minimum; and fewer companies offer insurance for them, thereby raising the price.

How to Get Auto Insurance Without A Car

Posted on Dec 2nd 2009, 04:07 pm, under Auto Insurance 101

Automobile insurance is required for almost everyone who intends to drive a vehicle, whether they actually own one or not. If you're planning to borrow or rent a car, it may already come with its own insurance coverage. However, you should also look into getting personal liability protection for yourself as well, in case you ever get into an accident.

First off, besides a valid driver's license, you need to know how much time you'll be spending driving your borrowed or rented vehicle. Get complete information on the ownership of the vehicle, and whether you are covered by any other person's existing insurance policy.

If you've been assigned a company car that you may use during non-working hours, ask your employer about their policy on auto insurance. You may be asked to carry a minimum level of coverage if you're using a company car.

You'll also need an accurate estimate of the total value of your personal assets. This includes your home, furniture, electronics, and other valuables. Estimate your future income as well. These factors must be taken into consideration when buying liability coverage.

Check online for free auto insurance quotes. If you already have rental or homeowners insurance, ask your insurance agent for an additional quote. If you buy coverage from your current insurance provider, you might be eligible for a multi-policy discount.

Make sure that the quotes you get are for liability coverage only. Since you don't own the vehicle, you don't need to buy insurance against theft, fire, collision, or comprehensive damage. You should also ask your insurance agent about the minimum liability coverage rules for your location, since these differ from state to state.

Lastly, inquire about the costs of insurance based on the value of your assets and your estimated future income. You need to protect yourself and your future income; therefore, it may be wise to buy as much liability coverage as you can afford, because a single accident can result in hundreds of thousands of dollars in damages.