Report from the Ohio DOI:
Insurance Department Announces Top Consumer Complaints of 2007, Saves Ohioans $10.7 Million
Claim denials top list; Department offers tips to help with filing claims.
COLUMBUS — Claim denials from insurance companies were the number one complaint of Ohio insurance consumers in 2007, according to statistics released by the Ohio Department of Insurance.
Nearly one-third of the 7,140 consumer complaints received by the Department dealt with the denial of claims by insurance companies. There were 312 more consumer complaints filed in 2007, up from 6,828 complaints in 2006. As a result of complaint reviews, the Department saved Ohio consumers more than $10.7 million in 2007.
A closed complaint is a complaint that has been reviewed and resolved to the satisfaction of the state or jurisdiction in which it is filed. The following lists show the top five types of consumer complaints for Ohio and the United States:
Top five types of Ohio consumer complaints in 2007
1. Claim Denials, 31.6%
2. Delays, 15.9%
3. Unsatisfactory Settlement/Offer, 13.1%
4. Cancellations, 4.6%
5. Premiums/Ratings, 2.7%
Top five Ohio complaints by type of coverage
1. Accident/Health, 42.2%
2. Auto, 26.8%
3. Life and Annuity, 13.2%
4. Homeowners/Renter, 12.1%
5. Other Lines, 5.7%
Top five types of national consumer complaints in 2007
1. Delays, 16.0 %
2. Denial of Claims, 15.0 %
3. Unsatisfactory Settlement/Offer, 9.8%
4. Cancellation, 4.6%
5. Premium/Ratings, 4.4%
Top five national complaints by type of coverage
1. Accident/Health, 36.4%
2. Auto, 34.4%
3. Homeowners, 12.5%
4. Life and Annuity, 9.0%
5. Commercial Multi-Peril, 1.8%
A total of 222,814 nationwide consumer complaints were reported to the National Association of Insurance Commissioners (NAIC) in 2007. This represents a 3.6 percent decrease from the number of nationwide consumer complaints reported during the 2006 calendar year. This information is based on the submission of closed complaint data to the NAIC from the state insurance departments. Aggregate data can be accessed on the NAIC’s web site, http://www.naic.org/.
To help avoid problems getting claims paid, the Ohio Department of Insurance offers these tips:
Know Your Policy – Understand what your policy says. The policy is a contract between you and your insurance company. Know what’s covered, what’s excluded and what the deductibles are.
File Claims as Soon as Possible – Don’t let the bills or receipts pile up. Call your agent or your company’s claims hotline as soon as possible. Your policy might require that you make the notification within a certain time frame.
Provide Complete, Correct Information – Be certain to give your insurance company all the information they need. Incorrect or incomplete information will only cause a delay in processing your claim.
Keep Copies of all Correspondence – Whenever you communicate with your insurance company, be sure to keep copies and records of all correspondence and telephone and in-person contacts.
Ask Questions – If there is a disagreement about the claim settlement, ask the company for the specific language in the policy that is in question. If this disagreement results in a claim denial, make sure you obtain a written letter explaining the reason for the denial.
Don’t Rush into a Settlement – If the first offer made by an insurance company does not meet your expectations, be prepared to negotiate to get a fair settlement. If you have any questions regarding the fairness of your settlement, seek professional advice.
Auto and Homeowners Claims – Auto and homeowners policies might require you to make temporary repairs to protect your property from further damage. Your policy should cover the cost of these temporary repairs, so keep all receipts. Also, keep any damaged personal property for the adjuster to inspect. If possible, take photographs or video of the damage before making temporary repairs.
Health Claims – Ask your physician to provide your insurance company with details about your treatment, medical conditions and prognosis. If you suspect a provider is overcharging, ask the insurance company to audit the bill and verify whether the provider used the proper billing procedure.
If you (as opposed to your doctor) are required to submit the claim, file it as soon as you receive your medical bill, send it to the correct address and keep a copy for your records.
The Explanation of Benefits (EOB) is a statement from the insurance company explaining its claim determination and benefit calculation. You should review your EOBs carefully in conjunction with the medical bills and insurance policy or certificate.
If you disagree with your health carrier’s claim determination, you should follow your carrier’s grievance or appeals process. Details concerning your plan’s appeal and grievance procedures should be included in your employee handbook, evidence of coverage or insurance policy.
To make sure your provider is in the network, ask your insurance company. Providers move in and out of networks, and even though you may be told a group of doctors is in your network, your particular doctor may not be.
For more information about insurance options and tips for choosing the right coverage, go to www.insureUonline.org. Ohio consumers who would like to file a complaint against their insurance company or have questions can call the Department’s consumer hotline at 1-800-686-1526 and visit www.ohioinsurance.gov.
Showing posts with label Auto Insurance. Show all posts
Showing posts with label Auto Insurance. Show all posts
Friday, February 22, 2008
Monday, September 24, 2007
Ten Most Asked Questions
Here you go: The most commonly asked insurance questions in the history of asking insurance questions:
1.
Q: Can someone get a life insurance policy on me without my knowledge?
A: Anything under the sun is possible. In order to get a life insurance policy issued, a person should have:
1. An insurable interest in the insured (you’re financially impacted if someone dies)
2. A need for the insurance $$ amount requested (no $5 million polices on your kids, unless she’s Miley Cyrus)
3. Access to personal information IE DOB, SSN, address, medical history
4. Signature of the insured (if insured is an adult)
5. Cooperation from insured if insurer requires paramedic exam (blood, urine, saliva, med history) or a physical exam. The people performing the exams are required to check IDs.
In order to collect on the policy, the person would need:
1. Cooperation from family or the executor of the estate to get death certificates.
2. Be outside the contestability period of the policy (usually two years from policy issue date) to avoid the scrutiny of the insurance company.
In the US, there are around 1,500 - 2,000 life insurance companies and they all do business in a similar manner with small differences in underwriting. None of them would make a profit by paying death claims on fraudulently obtained policies; so safeguards are put in place to guard against deception.
Without a paramedic exam or physical, there is a limit on how much insurance you can purchase. The industry limit seems to be around $250,000. So purchasing a $1M life insurance policy without the insured’s knowledge would be a challenge requiring a good amount of deception and fraud at policy issue.
This limits the size and type of policy someone could purchase. Small policies (say less than $100,000 for a young person, $25,000 for an older person) get less scrutiny. Group policies require only a few questions, but again limit the death benefit that can be purchased (usually only spouses can be named to purchase 50% of employee’s death benefit).
So, my conclusion; unless you’re the target of a well thought out deception, you’re probably just paranoid or watch too much TV.
2.
Q: My ______ (fill in the blank) died and we can’t find their life insurance policies. Where can I find this information?
A: There is not a central database of life insurance policies. I’ve written an article on searching for missing life policies: http://www.insuranceyak.com/2007/09/20/find-a-lost-life-insurance-policy/ Sorry for your loss and good luck with your search.
3.
Q: I need to file a claim against someone else’s policy. How do I find out who their insurer is?
A: A person or business’s insurance coverage is private information, so you can’t and you don’t. Their insurer will not accept claims from you and in most cases will not even speak with you. If the other party refuses to file a claim or admit fault, you’ll need to involve your insurance company or take legal action. In the case of any legal action, I would recommend involving a lawyer.
Keep in mind your insurance covers you, their insurance covers them. If you have bodily injury or property damage and someone else is the proximate cause, you could file a claim with your insurance company and allow your insurer to subrogate the claim against their insurance company.
4.
Q: What’s it like to work for _____(fill in the blank)? Is their training good? Will I really make $100K in my first year selling insurance?
A: There are a number of insurance companies who are always hiring sales agents, “account managers” or (my favorite) “manager trainees” : Farmers, Met Life, State Farm, Allstate, Primerica, New York Life, United American. The list goes on. There's a reason why they’re always hiring: They wash out 85-95% of all their new agents within two years, 98-99% after 5 years. These are SALES jobs; you sell you eat, don’t sell don’t eat. Some will pay you a stipend or advance your commission if you’re not selling, but the bottom line is you have to sell, week in, week out or your butt is out in the street. Now there always seems to be 1 out of 100 people who thrives is sales; kid natural who makes $100K her first year. If you’re one of these people, God has blessed you; may he continue to do so. Most other successful sales people just work hard and persevere long enough until they succeed. Average income for a first year sales agent? 30K if you work really hard and get a little lucky.
My advice: if you’re really interested in the industry, get a job working for a successful agent with a good reputation in the business and learn the ropes. When you’re ready, look for a good situation working for yourself selling what you like to sell.
See http://ohio-insurance-forum.blogspot.com/2007/06/q-how-does-insurance-agent-earn.html for a rundown on commissions earned and learn how big you’ll have to be in order to survive the business.
5
Q: A big expensive repair need to be done to my house, will my homeowners insurance cover it?
A: Homeowners insurance covers unexpected occurrences. Policies and coverage vary by state and policy, but repairs to a house are usually not covered unless the damage was caused by a covered risk.
Typically excluded items: earth movement, settling, faulty material, faulty workmanship, tree roots, old age & wear and tear, insect, vermin and pet damage.
So unless the proximate cause was something covered: fire, wind, falling objects, vehicle damage, building collapse, broken pipes you have no coverage. Water backup is an endorsement that usually has to be added to a policy; don’t have it, no coverage. If you call the insurance company claims center, they will log your call and start the count on number of claims you’ve filed in the past 5 years. Chances are 2 claims in three years will trigger a cancelation even if 0 dollars are paid on one claim. So you may want to hypothetically discuss this claim with YOUR AGENT.
See more about Homeowners coverage at:
http://ohio-insurance-forum.blogspot.com/2007/07/homeowners-insurance-covered-or-not.html
Tune in next week for questions 6 - 10
1.
Q: Can someone get a life insurance policy on me without my knowledge?
A: Anything under the sun is possible. In order to get a life insurance policy issued, a person should have:
1. An insurable interest in the insured (you’re financially impacted if someone dies)
2. A need for the insurance $$ amount requested (no $5 million polices on your kids, unless she’s Miley Cyrus)
3. Access to personal information IE DOB, SSN, address, medical history
4. Signature of the insured (if insured is an adult)
5. Cooperation from insured if insurer requires paramedic exam (blood, urine, saliva, med history) or a physical exam. The people performing the exams are required to check IDs.
In order to collect on the policy, the person would need:
1. Cooperation from family or the executor of the estate to get death certificates.
2. Be outside the contestability period of the policy (usually two years from policy issue date) to avoid the scrutiny of the insurance company.
In the US, there are around 1,500 - 2,000 life insurance companies and they all do business in a similar manner with small differences in underwriting. None of them would make a profit by paying death claims on fraudulently obtained policies; so safeguards are put in place to guard against deception.
Without a paramedic exam or physical, there is a limit on how much insurance you can purchase. The industry limit seems to be around $250,000. So purchasing a $1M life insurance policy without the insured’s knowledge would be a challenge requiring a good amount of deception and fraud at policy issue.
This limits the size and type of policy someone could purchase. Small policies (say less than $100,000 for a young person, $25,000 for an older person) get less scrutiny. Group policies require only a few questions, but again limit the death benefit that can be purchased (usually only spouses can be named to purchase 50% of employee’s death benefit).
So, my conclusion; unless you’re the target of a well thought out deception, you’re probably just paranoid or watch too much TV.
2.
Q: My ______ (fill in the blank) died and we can’t find their life insurance policies. Where can I find this information?
A: There is not a central database of life insurance policies. I’ve written an article on searching for missing life policies: http://www.insuranceyak.com/2007/09/20/find-a-lost-life-insurance-policy/ Sorry for your loss and good luck with your search.
3.
Q: I need to file a claim against someone else’s policy. How do I find out who their insurer is?
A: A person or business’s insurance coverage is private information, so you can’t and you don’t. Their insurer will not accept claims from you and in most cases will not even speak with you. If the other party refuses to file a claim or admit fault, you’ll need to involve your insurance company or take legal action. In the case of any legal action, I would recommend involving a lawyer.
Keep in mind your insurance covers you, their insurance covers them. If you have bodily injury or property damage and someone else is the proximate cause, you could file a claim with your insurance company and allow your insurer to subrogate the claim against their insurance company.
4.
Q: What’s it like to work for _____(fill in the blank)? Is their training good? Will I really make $100K in my first year selling insurance?
A: There are a number of insurance companies who are always hiring sales agents, “account managers” or (my favorite) “manager trainees” : Farmers, Met Life, State Farm, Allstate, Primerica, New York Life, United American. The list goes on. There's a reason why they’re always hiring: They wash out 85-95% of all their new agents within two years, 98-99% after 5 years. These are SALES jobs; you sell you eat, don’t sell don’t eat. Some will pay you a stipend or advance your commission if you’re not selling, but the bottom line is you have to sell, week in, week out or your butt is out in the street. Now there always seems to be 1 out of 100 people who thrives is sales; kid natural who makes $100K her first year. If you’re one of these people, God has blessed you; may he continue to do so. Most other successful sales people just work hard and persevere long enough until they succeed. Average income for a first year sales agent? 30K if you work really hard and get a little lucky.
My advice: if you’re really interested in the industry, get a job working for a successful agent with a good reputation in the business and learn the ropes. When you’re ready, look for a good situation working for yourself selling what you like to sell.
See http://ohio-insurance-forum.blogspot.com/2007/06/q-how-does-insurance-agent-earn.html for a rundown on commissions earned and learn how big you’ll have to be in order to survive the business.
5
Q: A big expensive repair need to be done to my house, will my homeowners insurance cover it?
A: Homeowners insurance covers unexpected occurrences. Policies and coverage vary by state and policy, but repairs to a house are usually not covered unless the damage was caused by a covered risk.
Typically excluded items: earth movement, settling, faulty material, faulty workmanship, tree roots, old age & wear and tear, insect, vermin and pet damage.
So unless the proximate cause was something covered: fire, wind, falling objects, vehicle damage, building collapse, broken pipes you have no coverage. Water backup is an endorsement that usually has to be added to a policy; don’t have it, no coverage. If you call the insurance company claims center, they will log your call and start the count on number of claims you’ve filed in the past 5 years. Chances are 2 claims in three years will trigger a cancelation even if 0 dollars are paid on one claim. So you may want to hypothetically discuss this claim with YOUR AGENT.
See more about Homeowners coverage at:
http://ohio-insurance-forum.blogspot.com/2007/07/homeowners-insurance-covered-or-not.html
Tune in next week for questions 6 - 10
Wednesday, September 5, 2007
SR22 - What is it?
Here's a question insurance agents hear week in and week out..can you sell me SR22 insurance? I'm here to clear up some of the confusion concerning the SR22 and what states require to keep people driving legally.
An SR22 is a document required as proof of financial responsibility by the court or under state law for persons convicted of certain traffic violations. The SR22 is not insurance, it is a certification that an auto insurance policy is in effect for a certain individual. This is the legal proof that courts need to show someone is complying with state financial responsibility laws. Insurers are allowed to charge a reasonable processing fee for filing SR22s. Insurers are not required to provide SR22s or may elect to offer them in one state and not another.
Definition of an SR-22 from the Car Insurance Learning Center:" SR-22 is a form which must be filed by the insurance company stating that auto liability insurance (or bonding in Ohio) is in effect for a particular individual. Required when insurance is provided to an individual who was in an accident or was convicted of a traffic offense and was unable to show financial responsibility. Each state has different variations of this form and requirements."
Long story short, someone got caught driving without insurance or the courts suspect they are or will be based on poor behavior (DUIs, reckless driving) .
SR22s are state specific and the requirements in one state may not apply in another state. You can expect an SR22 or financial responsibility in every state except for these exceptions.
Delaware, Kentucky, Minnesota, New Mexico, Oklahoma and Pennsylvania don't require SR22s, but if you have an SR22 and then move to one of these states, you must continue to meet the requirements of the SR22 state where the offense was committed.
New York and North Carolina don't require SR22 filings, and most companies don't offer out-of-state SR22 filings for policies in these states.
If you currently carry an SR22 in one state but move to another state, you must fulfill the SR22 filing period for your former state, even though you no longer reside there. Also, your insurance policy for your new state must have liability limits which meet the minimums required by law in your former (SR22) state. You can only get an SR-2 form from an insurance company that is filed with the state to issue SR22s.
SR22a forms: Similar to an SR22; there are used in Georgia, Texas and Missouri. In Georgia & Texas these are certifications used for repeat violators of financial responsibility laws. SR22a in GA & TX must be paid in guaranteed funds and policies must be paid in full for a 6 month term. In Missouri, SR22a are used for policies where drivers on a policy are restricted to only driving certain cars.
SR22 bonding: Very common in Ohio and other states that allow bonding in lieu of insurance. Drivers are told by the courts to secure a SR22 bond, go to an agency, ask for a SR22 bond and that's what they get, a bond. It's important to note the difference between a insurance policy and a bond; when an at-fault accident occurs, the insurance policy will absorb the cost, the bond will pay the cost and then request repayment from the bond holder. Sort of like a line of credit for the driver that must be repaid. This comes as quite a shock to most drivers who think they're insured.
SR26 forms: A filing done by insurance companies to cancel a SR22 or SR22a. Most states require notice in advance (usually 10 days) when a SR22 is being canceled. To avoid mix ups in SR22/SR26 filings, it a GOOD idea to get your insurance bills paid ON TIME.
Ernesto
An SR22 is a document required as proof of financial responsibility by the court or under state law for persons convicted of certain traffic violations. The SR22 is not insurance, it is a certification that an auto insurance policy is in effect for a certain individual. This is the legal proof that courts need to show someone is complying with state financial responsibility laws. Insurers are allowed to charge a reasonable processing fee for filing SR22s. Insurers are not required to provide SR22s or may elect to offer them in one state and not another.
Definition of an SR-22 from the Car Insurance Learning Center:" SR-22 is a form which must be filed by the insurance company stating that auto liability insurance (or bonding in Ohio) is in effect for a particular individual. Required when insurance is provided to an individual who was in an accident or was convicted of a traffic offense and was unable to show financial responsibility. Each state has different variations of this form and requirements."
Long story short, someone got caught driving without insurance or the courts suspect they are or will be based on poor behavior (DUIs, reckless driving) .
SR22s are state specific and the requirements in one state may not apply in another state. You can expect an SR22 or financial responsibility in every state except for these exceptions.
Delaware, Kentucky, Minnesota, New Mexico, Oklahoma and Pennsylvania don't require SR22s, but if you have an SR22 and then move to one of these states, you must continue to meet the requirements of the SR22 state where the offense was committed.
New York and North Carolina don't require SR22 filings, and most companies don't offer out-of-state SR22 filings for policies in these states.
If you currently carry an SR22 in one state but move to another state, you must fulfill the SR22 filing period for your former state, even though you no longer reside there. Also, your insurance policy for your new state must have liability limits which meet the minimums required by law in your former (SR22) state. You can only get an SR-2 form from an insurance company that is filed with the state to issue SR22s.
SR22a forms: Similar to an SR22; there are used in Georgia, Texas and Missouri. In Georgia & Texas these are certifications used for repeat violators of financial responsibility laws. SR22a in GA & TX must be paid in guaranteed funds and policies must be paid in full for a 6 month term. In Missouri, SR22a are used for policies where drivers on a policy are restricted to only driving certain cars.
SR22 bonding: Very common in Ohio and other states that allow bonding in lieu of insurance. Drivers are told by the courts to secure a SR22 bond, go to an agency, ask for a SR22 bond and that's what they get, a bond. It's important to note the difference between a insurance policy and a bond; when an at-fault accident occurs, the insurance policy will absorb the cost, the bond will pay the cost and then request repayment from the bond holder. Sort of like a line of credit for the driver that must be repaid. This comes as quite a shock to most drivers who think they're insured.
SR26 forms: A filing done by insurance companies to cancel a SR22 or SR22a. Most states require notice in advance (usually 10 days) when a SR22 is being canceled. To avoid mix ups in SR22/SR26 filings, it a GOOD idea to get your insurance bills paid ON TIME.
Ernesto
Wednesday, June 20, 2007
Commercial Vehicle Insurance -- Why is it needed?
I'll be writing several articles on commercial vehicle insurance, so to get started let's begin with the "why". In general, personal auto policies (PAP) are easy to obtain and offer wide coverage to people and their vehicles. In some cases a PAP is not available due to usage, type or owner of the vehicle. Commercial use is unacceptable or excluded under the policy language of a PAP. This may lead to a denial of coverage confrontation with an insurer, so understanding the difference is critical to the vehicle owner. What three factors determine personal vs commercial use?
1. Use of the Vehicle
What is generally acceptable for personal use?
1. Use of the Vehicle
What is generally acceptable for personal use?
- Day to day commuting or personal errands
- Car-pooling
- Volunteer work for an organization
- Infrequent business related errands
- Infrequent business use where auto is owned by an individual and used solely by the individual.
- No hauling of dangerous materials.
- No more than three job site visits a day.
- Consumer oriented sales or service or direct home sales (Realtors, Avon) May require a Business Use endorsement to a PAP.
A Business use endorsement on a PAP is usually a 20% (or so) surcharge.
Unacceptable Business Uses for PAP include:- Pick-up and delivery of goods (pizza, newspapers, or any other products).
- Transport of persons or property for a fee. Includes livery or taxi service.
- Transport of clients, children, hotel/motel guests, medical patients or migrant workers during the course of employment.
- Snow removal.
- Vehicles made available or assigned to employees on a regular basis.
- Any other business use of vehicle that is not indicated under acceptable business use.
2. Type of Vehicle - What the vehicle is built FOR is a good indicator of commercial usage. Commercial vehicles include:
- Vehicles with a manufacturer-rated capacity of greater than 3/4 ton (some insurers will offer PAP for vans or pick-ups if used for personal use).
- Limos, ambulances or hearses.
- Vehicles with printing or advertising.
- Vehicles altered for business related use with permanent equipment; sometimes ladder racks are acceptable.
- Vehicles used for plowing snow.
So if you buy a truck tractor just because you like the way they ride, you will still need commercial coverage.
3. Owner of Vehicle - Over the years, accountants and business owners have tried to save tax dollars by purchasing or leasing their vehicles under a business name then tried to save premium dollars by insuring under a PAP. Again, a denial of coverage situation. If a business entity is the vehicle owner, then the vehicle must be insured commercially.
Ernesto
Tuesday, June 12, 2007
Save money on auto insurance
The best ways to maximize your income is spend less of it, especially for a losing proposition like purchasing auto insurance. Why is this a losing proposition? Auto insurers have a goal to pay around 60 to 80 percent of all premium dollars received on claims. This is like investing $1 and getting an average return of negative 40%. No one would invest like that. So why buy insurance? To pay for REALLY big claims, the unexpected accident that totals your vehicle and causes serious injury. But in the meantime, let’s focus on saving premium dollars. Here are some steps you can take.
1. SHOP. Take advantage of a soft insurance market by shopping around. Times are good for insurance companies. Solid returns in equity markets and positive results in underwriting have company coffers flush with money. Some companies will take advantage of the good times to expand their customer base, and nothing attracts new customers like lower premiums. A particularly good time to investigate your alternatives is when your current policy is up for renewal. Most companies start renewal processing 45 – 60 days before your policy expires so look for your policy’s renewal declarations (Dec.) page in the mail. The Dec. page is particularly useful since it lists your vehicles with VIN numbers, drivers, coverages and rating address printed neatly on one sheet. When you ask insurance professionals to quote you, you can scan and fax the Dec. page around for a neat apples to apples comparison of rates. Independent agents have rating software to match you to the best companies. Single company agents only have one insurer to quote through, but still may be worth a look. Agents may even recommend coverage changes to improve your policy.
2. Increase your deductibles: For many people, raising the deductible on their auto insurance is a good way to cut the cost of the policy. Sometimes you can reduce your annual premium by 10 percent or more if you increase your deductible from, say, $250 to $500. If $500 is no stretch, move it to $1,000. If you do this, you’ll be your own insurance company for small claims, so make sure you have the financial resources to handle the larger deductible when the time comes.
3. Narrow the scope of your coverage: One seemingly obvious solution is to eliminate certain types of coverage from the policy. Most states require you to have liability coverage, but other non-mandatory coverages may be expendable. Be careful, though, because you don't want to be underinsured if you're in an accident. Even though medical payments, uninsured motorist, collision, and comprehensive coverages may be optional in some states, it's usually not advisable to get rid of them altogether. Be aware of your financial situation and get the right amount of coverage needed to protect your assets and get yourself back on track.
4. Drop Comp & Collision. If you drive an older car it's worth investigating the dropping of collision and comprehensive coverage. Ask yourself, if this car were totaled, would I want or need the insurer to fix it? Is there a loan on the vehicle? If the answer is no, drop the coverage. Be mindful of what this does to your other coverages as some companies will not offer their best programs to policies with liability-only vehicles. If you drop collision, consider adding UMPD or Uninsured Motorist Property Damage (if available); this will cover your vehicle (up to ACV or policy limits) if you’re damaged is not-at-fault and caused by an uninsured driver.
5. Drop what you can live without: Consider dropping any options you may have added to your policy like towing and labor, replacement car rental, accidental death or any other loss of income coverage. Removal of these items will reduce your premium somewhat, but will also expose you to the costs in question. So ask yourself: Can you afford the occasional tow? Do you have a spare vehicle if yours is in the shop for 30 days? If the answer is yes, live without the coverage.
6. Evaluate your coverage amounts: You can also reduce the amounts of certain coverages. Again, be careful. You don't want to be inadequately insured, especially in the area of liability. You should almost always keep your liability coverage at as high a level as possible because this is where you can have the greatest losses. You may be able to lower your coverage amounts in other areas (such as collision and comprehensive). Do you park a vehicle in the winter? Drop coverage to Comp. only. Now don't rush into a decision just to save a few bucks. Talk it over with your agent first.
7. Drive less: If you drive less than a certain number of miles in a year (say, 7,500), you may qualify for a low-mileage or pleasure use discount. If your insurer offers this discount, try to limit your driving as much as possible. If you commute to work, try telecommuting, four day work weeks or use public transportation instead of driving. When you go away on vacation, fly, take the train or rent a larger vehicle for your trip. Be careful not to lie or even stretch the truth with your insurer; if you commute 5 days a week, don’t tell them it’s for pleasure use; you’re setting yourself up for a denial of coverage confrontation.
8. Don't use your car for business purposes: Since work-related driving generally subjects you to a higher premium than pleasure driving, it may be in your best interest to stop using your car for business purposes.
9. Drive more safely: You may be eligible for a price break on your policy if you maintain a clean driving record for a specified period (usually three years). Some companies offer claims free discounts so review # 5 and ask is the coverage worth losing discounts in the future. A clean driving record generally means no accidents, serious moving violations, drunk driving convictions, etc., during that period. The best way to qualify for the applicable discount is to drive carefully and defensively at all times.
10. Buy a low-profile car: Drive your fathers Oldsmobile. Cars are rated on a risk scale for auto insurance purposes. In general, sports cars and other high-performance, flashy vehicles are classified as higher risks because they are common targets for thieves and vandals, and because statistically, the people who own them tend to drive more recklessly. If you own such a vehicle, you will likely pay a higher premium than if you owned a station wagon, sedan, or other low-risk vehicle.
11. Move: Insurance companies rate everything by territory. If you live in a rural community with little crime and traffic congestion, your premium will generally be lower than if you live in an urban area where your car is more likely to be stolen, vandalized, or involved in an accident. Granted, you shouldn't move just to cut your auto insurance costs. However, one community may be in a lower rated territory than another. This may be one of many factors in your decision if you're thinking about relocating.
12. Keep your car in a garage or at least off street. : Cars parked in garages are less likely to be stolen, vandalized, or struck by other vehicles. Using a garage to store your car may entitle you to a slight premium reduction.
13. Inquire about multifamily/multipolicy discounts: You may receive a discount from your insurance company if you buy more than one type of insurance through that same company (e.g., auto and homeowners). A discount may also apply to your auto insurance if you insure multiple cars under the same policy or with the same company.
14. Ask you agent about other discounts: Other discounts may be available if you meet certain criteria, so ask. Examples include discounts for not smoking, participating in a car pool, staying with the same company for a number of years, being over 50 years of age, and having a covered child who attends school at least 100 miles away or paying automatically by bank draft.
15. Beware of fees: Policy fees, reinstatement fees, bounced check fees, SR22 fees, billing & installment fees, stop payment fees. The list is long and insurance companies love to get extra money with no risk to them. Ask yourself what can you do to get your own financial house in order and stop paying money for nothing. Can you use bank draft and make payments automatically? Doing so will eliminate half the fees listed and could save you $60 to $100 per year.
Pay some attention to your auto policy. The savings ideas listed may take several years to accomplish but will save you big bucks in the long run.
Ernesto
1. SHOP. Take advantage of a soft insurance market by shopping around. Times are good for insurance companies. Solid returns in equity markets and positive results in underwriting have company coffers flush with money. Some companies will take advantage of the good times to expand their customer base, and nothing attracts new customers like lower premiums. A particularly good time to investigate your alternatives is when your current policy is up for renewal. Most companies start renewal processing 45 – 60 days before your policy expires so look for your policy’s renewal declarations (Dec.) page in the mail. The Dec. page is particularly useful since it lists your vehicles with VIN numbers, drivers, coverages and rating address printed neatly on one sheet. When you ask insurance professionals to quote you, you can scan and fax the Dec. page around for a neat apples to apples comparison of rates. Independent agents have rating software to match you to the best companies. Single company agents only have one insurer to quote through, but still may be worth a look. Agents may even recommend coverage changes to improve your policy.
2. Increase your deductibles: For many people, raising the deductible on their auto insurance is a good way to cut the cost of the policy. Sometimes you can reduce your annual premium by 10 percent or more if you increase your deductible from, say, $250 to $500. If $500 is no stretch, move it to $1,000. If you do this, you’ll be your own insurance company for small claims, so make sure you have the financial resources to handle the larger deductible when the time comes.
3. Narrow the scope of your coverage: One seemingly obvious solution is to eliminate certain types of coverage from the policy. Most states require you to have liability coverage, but other non-mandatory coverages may be expendable. Be careful, though, because you don't want to be underinsured if you're in an accident. Even though medical payments, uninsured motorist, collision, and comprehensive coverages may be optional in some states, it's usually not advisable to get rid of them altogether. Be aware of your financial situation and get the right amount of coverage needed to protect your assets and get yourself back on track.
4. Drop Comp & Collision. If you drive an older car it's worth investigating the dropping of collision and comprehensive coverage. Ask yourself, if this car were totaled, would I want or need the insurer to fix it? Is there a loan on the vehicle? If the answer is no, drop the coverage. Be mindful of what this does to your other coverages as some companies will not offer their best programs to policies with liability-only vehicles. If you drop collision, consider adding UMPD or Uninsured Motorist Property Damage (if available); this will cover your vehicle (up to ACV or policy limits) if you’re damaged is not-at-fault and caused by an uninsured driver.
5. Drop what you can live without: Consider dropping any options you may have added to your policy like towing and labor, replacement car rental, accidental death or any other loss of income coverage. Removal of these items will reduce your premium somewhat, but will also expose you to the costs in question. So ask yourself: Can you afford the occasional tow? Do you have a spare vehicle if yours is in the shop for 30 days? If the answer is yes, live without the coverage.
6. Evaluate your coverage amounts: You can also reduce the amounts of certain coverages. Again, be careful. You don't want to be inadequately insured, especially in the area of liability. You should almost always keep your liability coverage at as high a level as possible because this is where you can have the greatest losses. You may be able to lower your coverage amounts in other areas (such as collision and comprehensive). Do you park a vehicle in the winter? Drop coverage to Comp. only. Now don't rush into a decision just to save a few bucks. Talk it over with your agent first.
7. Drive less: If you drive less than a certain number of miles in a year (say, 7,500), you may qualify for a low-mileage or pleasure use discount. If your insurer offers this discount, try to limit your driving as much as possible. If you commute to work, try telecommuting, four day work weeks or use public transportation instead of driving. When you go away on vacation, fly, take the train or rent a larger vehicle for your trip. Be careful not to lie or even stretch the truth with your insurer; if you commute 5 days a week, don’t tell them it’s for pleasure use; you’re setting yourself up for a denial of coverage confrontation.
8. Don't use your car for business purposes: Since work-related driving generally subjects you to a higher premium than pleasure driving, it may be in your best interest to stop using your car for business purposes.
9. Drive more safely: You may be eligible for a price break on your policy if you maintain a clean driving record for a specified period (usually three years). Some companies offer claims free discounts so review # 5 and ask is the coverage worth losing discounts in the future. A clean driving record generally means no accidents, serious moving violations, drunk driving convictions, etc., during that period. The best way to qualify for the applicable discount is to drive carefully and defensively at all times.
10. Buy a low-profile car: Drive your fathers Oldsmobile. Cars are rated on a risk scale for auto insurance purposes. In general, sports cars and other high-performance, flashy vehicles are classified as higher risks because they are common targets for thieves and vandals, and because statistically, the people who own them tend to drive more recklessly. If you own such a vehicle, you will likely pay a higher premium than if you owned a station wagon, sedan, or other low-risk vehicle.
11. Move: Insurance companies rate everything by territory. If you live in a rural community with little crime and traffic congestion, your premium will generally be lower than if you live in an urban area where your car is more likely to be stolen, vandalized, or involved in an accident. Granted, you shouldn't move just to cut your auto insurance costs. However, one community may be in a lower rated territory than another. This may be one of many factors in your decision if you're thinking about relocating.
12. Keep your car in a garage or at least off street. : Cars parked in garages are less likely to be stolen, vandalized, or struck by other vehicles. Using a garage to store your car may entitle you to a slight premium reduction.
13. Inquire about multifamily/multipolicy discounts: You may receive a discount from your insurance company if you buy more than one type of insurance through that same company (e.g., auto and homeowners). A discount may also apply to your auto insurance if you insure multiple cars under the same policy or with the same company.
14. Ask you agent about other discounts: Other discounts may be available if you meet certain criteria, so ask. Examples include discounts for not smoking, participating in a car pool, staying with the same company for a number of years, being over 50 years of age, and having a covered child who attends school at least 100 miles away or paying automatically by bank draft.
15. Beware of fees: Policy fees, reinstatement fees, bounced check fees, SR22 fees, billing & installment fees, stop payment fees. The list is long and insurance companies love to get extra money with no risk to them. Ask yourself what can you do to get your own financial house in order and stop paying money for nothing. Can you use bank draft and make payments automatically? Doing so will eliminate half the fees listed and could save you $60 to $100 per year.
Pay some attention to your auto policy. The savings ideas listed may take several years to accomplish but will save you big bucks in the long run.
Ernesto
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