Tuesday’s Post 1.3.12 –  California’s Auto Insurance laws may change the eligibility for safe driver discounts for that states drivers. Changes to car insurance rules will make it easier for carriers to find out if a driver’s actions in an accident put them at primary fault. The changes, made earlier in the week allow budget Auto Insurance Companies to use evidence in their possession to prove a driver, through action or inaction, caused a car accident. 6 specific circumstances decide whether a motorist could be found at fault for a car accident, regardless of other circumstances. California drivers are found to be at fault if their behavior behind the wheel resulted in the accident. This is determined if at least 51% of the blame can be attributed to the a driver in a car accident.   California drivers are no longer eligible for safe driving discounts in the event they have a single violation point on their driving record, or were at fault in a collision. Prior to these auto insurance changes, the damage allowance was capped at seven hundred fifty dollars.

The California Department Of Insurance (DOI) says the threshold for property damages needs to be amended. The guidelines for safe driver eligibility were first outlined in the proposed amendment 103, passed by the legislation 30 years ago.  When California drivers become eligible for a safe driver discount, they should see a 20% decrease in their annual auto insurance rates and monthly car insurance payment.  These changes also make the way clear for carriers to use CLUE and ISO database results in making at-fault accident decisions.  Car insurance companies will no longer have the ability to use Department of Motor Vehicle records, (DMV) which often lake information used to make such At Fault Accident and Not At Fault  Accident determinations. In addition; Department of Motor Vehicle keep track of  Speeding Tickets, Stop Sign Violations, Traffic Light Violations, Driving While Intoxicated (DWI), Driving Under the Influence (DUI) and License Suspension for excessive drivers license points.

-Mike

Michael E. Dortch
President &  Managing Agent
InsureDirect.com
Corporate Home Office
618 South Broad Street
Lansdale, Pennsylvania  19446
(800) 807-0762  ext. 602

Sunday’s Post 1.1.12 –  State Farm clients in Michigan face increases in their car insurance rates in 2012. January 23rd, the auto insurance carrier will elevate rates for personal car insurance policy rates  2%.  The price of property damage, collision coverage and comprehensive insurance rates will go up for some clients, but may decrease for some others. The cost of the State mandatory Portions of  the auto insurance policies – such as liability and coverage and personal injury – will go up for all policyholders according to State Farm Auto Insurance Agents. State Farm Car Insurance is one of a group of vehicle insurance companies in the State of Michigan who are lobbying for amendments to that state’s no fault system. Carriers and industry lobbyists state that increases in PIP filings have caused costs to increase for insurers, which directly correlates to higher car insurance rates for motorists.

Opponents of the no fault system say that it must be completely changed to keep coverage rates from increasing exponentially, which would force carriers to raise auto policy rates to maintain profit margins. Medical care providers and other parties who are against changes to the system contend that revamping it would lead to bankruptcy for crash victims and their dependents, since they would assume the financial responsibility for care if the changes go into effect. Under the current no fault system, instated by the State of Michigan during the 1970’s, motorists throughout Michigan contribute to a fund administrated by the MCCA (a fun that covers costs for catastrophic claims over $500,000). Those contributions are made as a line item in the cost of registration for cars, with the current assessment set at $145 per registration.

-Mike

Michael E. Dortch
President &  Managing Agent
InsureDirect.com
Corporate Home Office
618 South Broad Street
Lansdale, Pennsylvania  19446
(800) 807-0762  ext. 602

Wednesday’s Post 12/21/11 –  According to recent studies, hybrid cars may be much safer for its passengers. On the other hand, because of  their weight and reduced noise; pedestrians are unlikely to hear an approaching hybrid increasing chances  and severity of  serious accidents.  From statistics gathered by the Highway Loss Data Institute (HLDI) of Virginia, chances of being injured (as passenger) in a crash of a hybrid model are 25% less than that of their non-hybrid counterparts. The group, which is an affiliate of the Insurance Institute for Highway Safety, says that weight is a big element in the safety of the car. In general, Hybrids are heavier than a standard compact car. The added weight is because of its battery packs and other parts that are necessary in dual-power systems. A hybrid Honda Accord weighs around 3,600 while a conventional Accord just weighs 3,120 pounds. That’s a 4,500-pound difference.  It is a proven fact that in a collision, the passengers in a larger, heavier car have a greater chance of survival than those in a smaller car. The greater the weight of the car, the less severe the impact would be in the event of an accident.

Auto Insurance Collision Coverage deals with the replacement or restoration of an at-fault or not-fault driver’s car after a  Car Accident. Personal Injury Protection or PIP deals with the medical expenses of the injuries of those involved in a crash regardless of who the driver at-fault is. Medical Payments or Medpay deals with the treatment costs of the insured driver and his passengers when he is the one at-fault. PIP is endorsed in states that have no-fault insurance systems while MedPay is endorsed in tort states. Bodily injury liability coverage insures against medical, hospital, and other expenses for injuries that at-fault drivers cause in an accident. On the other side, the study has also found out that hybrid cars are 20% more likely to be involved in pedestrian crashes, in comparison to conventional cars. Because of the noiseless nature of hybrid cars when operating in electric-only mode, pedestrians are less likely to check left-and-right before crossing the road, fears Matt Moore, Vice President of HLDI.

Between 2004 and 2010, over 25,300 bodily injury liability claims have already been made that are related to hybrid cars. The National Highway Traffic Safety Administration is aware of the increased pedestrian risk and is currently addressing ways to reduce the risks.  Ten months ago, the Congress gave the department three years to mandate hybrids and electric models to equip themselves with alert sounds to notify unsuspecting pedestrians.

-Mike

Michael E. Dortch
President &  Managing Agent
InsureDirect.com
Corporate Home Office
618 South Broad Street
Lansdale, Pennsylvania  19446
(800) 807-0762  ext. 602

Wednesday’s Post 11/16/11 – This week the American Automobile Association released survey results  showing that a $2,000 car repair bill is now out of reach for at least a quarter of the total US population whom own a car.  A $1000.00 car repair bill did not fare much better. While releasing the results,  American Automobile Association vice president for automotive and financial services, said that the tough economic conditions faced by Americans are to blame for the increased negligence of car repair.  This exposes car owners to more costly repair bills. Is this change we can believe in?  Half of the total motorist population prefers staying with their older cars rather than incurring the expenditure of buying a new one. 25% of the population no longer do their own vehicle repair and maintenance.  Of those who can’t defray these repair costs, 13 % would use funds borrowed from family, friends, banks, retirement benefits or home equity to foot a $2,000 bill, while 20 percent indicated that they would pay the bill through a credit card and pay off the repair over time. Others would depend on personal savings were found to be 38 percent. For those who could pay a $1,000 repair bill, 22 percent would finance the bill via credit card, 46 percent would borrow from their savings and 16 percent would have to seek credit from other sources. State Farm, in an email, estimated the number of those who didn’t know how they would pay for either of the bills to be at four percent.

The survey results seem to confirm the research opinion that many motorists, mainly those owning older cars, are now neglecting comprehensive and collision insurance in favor of cost savings. However, those who still buy these policies request higher deductibles, according to Quality Planning in a study it released earlier in the year. Quality Planning is a firm dealing with verification of policyholder data for insurance companies. It is based at Seattle. Between 2006 and 2010, there was a 10 percent increase in older cars  not carrying  Auto Insurance comprehensive or Auto Insurance collision coverage. This number jumped from 53 percent in 2006 to 63 percent in 2010, Quality Planning reported. According to the company, this resulted in an annual out-of-pocket savings of $229 which, when broken down, stood at $19 monthly. In addition, vehicles with a low collision deductible of up to $250 declined at an annual rate of nine percent between 2006 and 2009. On the other hand, those with high deductibles of up to $1,000 increased in the same period from 1.6 percent to 4.9 percent. Although there is a general agreement that higher deductibles can significantly cut costs, industry analysts warn against choosing this option, as they see it as a gamble since it  would expose many motorists to the risk of having to pay for repairs out-of-pocket. They argue that higher deductibles greatly expose consumers to the possibility of having to settle all costs equal to the amount. 

Consumer advocates advise vehicle owners to consider both the risk of major costs in the long run as well as short-term savings when choosing automobile insurance. Repair costs for older vehicles, especially those that have been given poor maintenance services, can rise very quickly, although this largely depends on the kind of repair needed and the type of vehicle. AAA estimates that engine repairs could cost in excess of $5,000 while transmission repairs could range between $2,000 and $4,000. 

-Mike

Michael E. Dortch
President &  Managing Agent
InsureDirect.com
Corporate Home Office
618 South Broad Street
Lansdale, Pennsylvania  19446
(800) 807-0762  ext. 602

A number of U.S. credit monitoring websites have revealed that your personal credit score might be related to the auto insurance premiums demanded by car insurance companies in the state of New Jersey. According to the survey,  New Jersey residents with higher credit scores could save huge sums of money for direct car insurance compared to those with low scores.  Currently, a number of prominent car insurance companies in New York,  New Jersey and Pennsylvania use this method for auto insurance premium calculation. The process has been cited as unfair by many New Jersey drivers although it is legal in many states.

Many Drivers have been for a long time familiar with the basic criteria used by New Jersey Direct auto insurance companies to calculate premiums. Auto insurers consider your personal driving history, car insurance claims record, age, sex, type of vehicle and the area of state you reside. Drivers argue that this information is enough to obtain cheap car insurance quotes from any insurer. New York and New Jersey insurance companies tend to disagree on this point.

According to some auto insurance carriers, the relevance of credit scores in premium calculations does not apply to all customers. This condition is only applicable for clients who choose to make payments using monthly installments. Those who make full premium payment upfront are not affected by the credit score stipulation. The whole debate surrounding credit scores is because a majority of Car insurance clients belong to the former category.

Generally, a credit score is a numerical assessment of your personal credit worthiness. Bottom line, the question is “do you pay your bills or not?”  It is based on your credit report as tabulated by any of the credit reported agencies tasked with the responsibility. You are normally requested to authorize the bank to order a credit report or score when you apply for mortgage, credit card or other forms of loans from lending institutions. It is only recently that auto insurance companies have begun to request credit scores from prospective clients. Conversely, seven states including Maryland, Michigan and Texas have passed legislation that restricts this requirement in one form or the other. Car Insurance Carriers which do use credit as a factor in determining auto insurance rates beleive the following.  Solid statistics show those drivers with a good or better credit rating have less accidents, tickets, violations. Drivers with good credit are more responsible and will also pay their bills on time.

Nonetheless, you do not have to concern yourself  with the thought of paying higher premiums due to a poor credit scores. InsureDirect.com represents many carriers where a credit score is not much of a factor.  We have other carriers where it’s no factor at all.   There are a number of ways of reducing your auto insurance premium without relying on your credit score.

This is part one of a two part article.  Please watch Monday’s Blog for part two….

-Mike

Potential clients often wonder whether it is safe to buy cheap auto insurance for their vehicle over concerns about whether or not the insurance company will be able to cover for damages in case of an accident. It is a well-known fact that consumers are always in search of a bargain, and this extends to just about everyone when they are looking to purchase auto insurance. And although there are some people who might be apprehensive about a cheaper policy, their fears are unfounded because there is simply no proof that a cheap auto insurance company that has a good reputation is not adequately equipped to compensate you in case of an accident.

Here are some of the reasons why your insurance provider might reward you with a cheap auto insurance policy:

A cheap auto insurance rate could be given in recognition of policyholders who have shown a commitment to the company. Elderly folks may also be asked to pay lower premiums due to their lower risk levels. If you have not filed for a claim for damages for a long period of time you may also be a candidate for reduced premium payments.

Most of the time, high premium charges are as a result of your own culpability. You might provide inaccurate information to the insurance underwriter with the hope of securing a lower premium. Underwriters rely on the information you supply to calculate premium payments. They also research the information you provide to make sure that your data is credible.

It is essential that you give accurate and honest data when seeing cheap auto insurance quotes online. Do not tweak reality in any way. Direct auto insurance quotes are meant to be error free, and you will likely be penalized for dishonesty. This is often the reason some clients are required to pay higher premiums. As such, you should review the nitty-gritty of the quotes and related policy documents before you submit it to the underwriter.

If a company charges very high premiums for vehicle insurance, there might be details in the fine print that are not being revealed. Not all auto insurance companies are equal, so it is important to be well-informed.

Another reason that may lead to high insurance premiums is the type of policy chosen. A comprehensive direct auto insurance policy is more costly than third-party insurance. Although a cheaper policy may not offer as complete a level of protection, it may provide a cheap car insurance alternative that’s right for you needs.

– Mike

7/13/11  UPDATE: Not only is it important to check the stability of a new company you are considering as your primary auto & homeowners insurance company, you should check your existing carrier.  Since the Wall Street Meltdown in 2008, many insurance carrier whom had shared investments with other insurance carriers like AIG, have been down-graded. In 2008, American International Group (AIG) was down-graded from an A+ to an A.  You may think that’s not a huge loss; consider they almost went out of business.  If it was not for the Federal Government – they would have.

When you’re shopping for car insurance, there are many things which you look for.  Regardless what many people may say; first & foremost you want a low price for the right coverage for your situation.  If you are financing a new car or truck or SUV, you will be required by the bank or leasing company to maintain comprehensive and collision insurance, for the life of the loan or lease. All though not first, second or third on the list; of course you would prefer an efficient and responsive claims service. Although these are the common things we should be looking for; there are a number of others including the following.  Ask yourself, “how does the insurance carrier I’m considering stack up against the competition?”

Where do one go to investigate the strength and integrity of and insurance company?  To find out, what you need is access toa source of competitive insurance company ratings. One source both myself and my agents have used since 1992 is  A. M. Best.   Although there are multiple rating companies in the United States; in my opinion; A.M. Best provides both agents and consumers the information each needs to make informed decisions about  either the which insurance company and agent should represent  or the company a shopper picks to write their auto and home insurance.

Unfortunately; you can count out traditional advertising  to learn who is best.  Although the ratings they proclaim may be true,  every insurance company feels they are the best and that’s what they are going to tell you. Maybe the best way to find a good insurance company, who will stand behind you when you need them most, is to ask friends and family.

– Mike

As a responsible driver, you promptly pay your car insurance premium every month, but do you fully understand what you’re actually buying or exactly what you’re paying to protect?

Most folks think auto insurance pays to fix their car in case of an accident. That’s correct of course, but the entire truth is that you car insurance policy covers you and your household members for much more just your car.

In fact, when you buy car insurance, only two parts of the policy are intended to protect your vehicle; Comprehensive and Collision coverage.

So, whether you insurance is up for renewal, or whether you’re seeking new insurance coverage, it’s important to understand the many options that are involved in seeking the coverage that’s right for you.

That’s why I’ve collected key information defining the various options you’ll want to consider when you’re ready to get auto insurance quotes that you can print out and keep handy when you begin shopping for new car insurance coverage.

Here are some simple explanations of Comprehensive and Collision insurance, as well as the other coverage options a typical automobile insurance policy provides:

Comprehensive Coverage
Comprehensive coverage pays to repair your car from hazards like having your car catch fire, or when you’ve parked at the shopping mall and find upon exiting that your car has been stolen. Comprehensive also covers your car should you emerge from the mall to find that someone has used a key to scratch your finish. Your car insurance carrier also may consider covering things such as a collision with a deer under comprehensive. Comprehensive will also cover you for windshield damage from a flying stone or bird strike.

Collision Coverage
Collision Damage coverage pays for physical damage to your vehicle. Regardless of whether an accident is your fault or not, your carrier will pay to repair your vehicle – minus the deductible you agreed upon when you purchased your policy.

Property Damage Coverage
Property damage coverage pays for damage you have caused in the event of an at-fault accident. The maximum amount of Property Damage the carrier will pay for is determined by the limit you agreed to when you purchased your policy. Property damage can include damage to another car or other property like a home owner’s back yard fence or a utility pole. The state minimum in most states is $5000. Many carriers also offer Property Damage limits that pay as high as $100,000.

Liability Coverage
Another insurance option which covers the driver and occupants of other cars involved in an accident that is your fault is Liability coverage. Liability coverage pays the medical bills for the occupants of the vehicle your car hit or that was determined to be not-at-fault. Again; the maximum amount paid by your insurance company is determined by the limit(s) you agreed to purchase. The minimum in many states is $15,000 per person or $30,000 if more than one person is injured.

Uninsured and Underinsured Motorist Coverage
What if you are involved an automobile accident and the other driver is at fault? And, to make matters worse, what if the other driver has no auto insurance coverage or has coverage, but may not have a sufficient insurance limit to pay for your vehicle or damaged property? Making matters even worse, let’s say you don’t have Comprehensive and Collision coverage on your policy to pay for repairs to your car. Purchasing Uninsured Motorist (UM) and Underinsured Motorist (UIM) may make a huge difference in making you whole again. Depending on the state you live in and that state’s laws, UM and UIM can be accessed to pay for the damage to your car and/or Medical bills if the at-fault driver has insufficient insurance coverage or no coverage at all.

Additional Coverage Options
There are many other coverage options available for purchase within an auto insurance policy as well. For a small additional monthly premium, coverage for Loss of Income, Accidental Death, Rental car and Towing are available.

If, after reading this, you have any further questions regarding what coverages belong in your auto insurance policy, I invite you to call me personally at at 1-800-807-0762 ext. 206.

EXTRA PIP PACKAGE COVERAGE – These are added benefit options provided under the STANDARD POLICY

ESSENTIAL SERVICES – Pays for necessary services that you normally do yourself, such as cleaning your house, mowing your lawn, shoveling snow or doing laundry if you are injured in an auto accident.

DEATH BENEFIT — In the case of death, family members or estates will receive any benefits not already collected under the income continuation and essential services coverages.

FUNERAL EXPENSE BENEFIT — Pays for reasonable funeral expenses up to the limit you select if you die as a result of an auto accident.

UNINSURED MOTORIST COVERAGE— Pays you if you are in an auto accident caused by a driver who does not have the minimum level of insurance required by law. Claims that you would have made
against the uninsured driver who caused the accident are paid by your own policy. Uninsured motorist coverage does not pay benefits to the uninsured driver.

UNDERINSURED MOTORIST COVERAGE— Pays you if you are in an auto accident caused by a driver who is insured, but who has less coverage than your underinsured motorist coverage. Damages greater than the limits of the other driver’s policy are covered by your policy up to the difference between the limits of your underinsured motorist coverage and the other driver’s policy limit.

COMPREHENSIVE(also known as comp or other than collision) and COLLISION coverage is not required by law, but may be required under the terms of an automobile leasing or financing contract.

Collision coverage pays you for damage that you cause to your automobile. You can also make a claim under your own collision coverage for damage to your car from an auto accident you did not cause. This may take less time than making a property damage liability claim against the driver who caused the auto accident. Your insurer then seeks reimbursement (subrogation) from the insurer of the driver who caused the auto accident.

Comprehensive coverage pays you if your automobile is stolen or for damage to your automobile caused by things not covered under collision coverage, such as vandalism, flooding, fire, a broken windshield or damage from an animal.

DEDUCTIBLE — The STANDARD deductible for comprehensive and collision coverage is $750.  Higher and lower deductibles are available as options.  Higher deductibles can cut your premium.

NAMED DRIVER EXCLUSION —Prevents certain drivers on your policy from being covered by collision and/or comprehensive coverage on a specific automobile. This can lower your premium, but if the excluded driver operates the automobile and is involved in an auto accident, you are not insured for collision and/or comprehensive coverage; which means you could be personally responsible.

For the STANDARD POLICY, you must make a choice about the rights you will have if you are injured in an automobile accident.  (The BASIC POLICY includes the LIMITED RIGHT TO SUE option.)

UNLIMITED RIGHT TO SUE  — Under the No Limitation on Lawsuit Option, you retain the right to sue the person who caused an auto accident for pain and suffering for any injury.

LIMITED RIGHT TO SUE — By choosing the Limitation on Lawsuit Option, you agree not to sue the person who caused an auto accident for your pain and suffering unless you sustain one of the permanent injuries listed below: (Choosing this option does not affect your ability to sue for economic damages such as medical expenses and lost wages.)

• loss of body part
• significant disfigurement or significant scarring
• displaced fracture
• loss of a fetus
• permanent injury (Any injury shall be considered permanent when the body part or organ, or both, has not healed to function normally and will not heal to function normally with further medical treatment based on objective medical proof.)
• death

For more information regarding the auto insurance policy rules, regulations and options; send you questions to:

info@insuredirect.com or call 800-807-0762