Lower Your Auto Insurance Costs

Image by shainelee via FlickrI remember listening to a talk radio program on the AM dial about a year ago where the host stated that he chose not to participate in the economic recession.  Now he spends a good portion of his program showing empathy to his listeners who have been affected by the economic downturn.  No matter where we live, our neighbors are tightening their belts, spending less, and pinching their pennies.  As a father of five young children, I find myself doing the same.  Here are some ideas that may help you save money on car insurance without having to shop around.

Automobile insurance premiums often take a big bite out of a family’s budget. You may, however, be paying too much for this coverage. The following are several approaches you can use to reduce your auto insurance costs.

• Choose higher deductibles, particularly if you currently have a low collision or other-than-collision deductible, such as $100 or $250. Increasing your deductible from $250 to $500 or $1,000, for example, can reduce your collision and other-than-collision premium by 15 to 35 percent.
• Eliminate collision and other-than-collision coverage on older, less valuable cars. If your car is worth less than $1,500, it may be wiser and cheaper in the long run to just retain this physical damage exposure. Used car valuations are available online at Kelley Blue Book.
• Maintain an excellent credit record, since insurance companies are increasingly using credit scores to price auto insurance policies. Consumers with poor credit often pay more for auto insurance. 
• Buy a “low-profile” automobile. Before you purchase a new or used car, check into the auto insurance costs. Automobile models that are expensive to maintain and have higher theft and collision frequency rates tend to have higher insurance costs. 
• Take advantage of multipolicy discounts by keeping your homeowners and auto policy with one insurer. Likewise, take advantage of multicar discounts by having all autos on one insurance policy.
• Seek out other auto insurance discounts (which can vary by state and by insurance company), such as defensive driving, good student, low-mileage auto, alcohol awareness training, air bags, antilock brakes, claim-free experience, and long-term customer. 

DON'T MIX ALCOHOL AND DRIVING, "WELL DUH!"

When I think of the risks of drinking and driving, the thought, "Well duh!" goes through my head.  Everyone knows how stupid it is to mix alcohol and car keys.  Unfortunately, some still haven't got the message, so if you are one of them, here is a "Well Duh!" message for you!

A National Highway Traffic Safety Administration study indicates that nearly 12,000 people died in automobile crashes involving alcohol consumption in the United States in 2008. This tragic statistic represents an average of one alcohol-related auto accident death every 45 minutes. Tougher DWI laws are one answer to reduce these losses. Educating drivers on alcohol awareness is another important step. The following educational tips about drinking and driving are important to remember and to pass on to young drivers.

• Never drink and drive. Be aware that neither coffee, exercise, nor a cold shower will sober up a drinker. Only the passage of time will do so. If a person does drink, a nondrinking driver should be designated.
• Apply a zero-tolerance policy to alcohol and young drivers. Young drivers are particularly at risk to be involved in alcohol-related crashes.
• Steer clear of impaired persons on the road and report these incidents to the police as soon as safely possible. Drivers under the influence of alcohol display certain driving characteristics, such as weaving or swerving, driving very slow or very fast, braking erratically, and driving after dark without headlights.
• Wear a seat belt and utilize defensive driving techniques, as these are the best defenses against an alcohol-impaired driver.
• Try to avoid driving in the early morning hours of the day, particularly on weekends due to a heightened exposure to impaired drivers. 

DO I REALLY NEED TO INSURE HIRED & NON-OWNED AUTOS?

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Hired and Non-Owned Auto coverage is a type of insurance often overlooked by businesses, especially companies that don't have insured vehicles.  However this coverage is cheap, and neglecting to add it to your policy before a car accident can be very costly.  Ask yourself the following questions:

1. Might any of your employees run errands or make deliveries for the business using their own autos?
2. Is there a chance that you might borrow an employee's vehicle for any reason?
3. If you are unavailable (or on vacation) will an employee use their vehicle to run errands , make bank deposits, or anything else?
4. Do you foresee a need to rent a vehicle for business purposes?  (I saw my local FedEx guy driving a rented Budget truck today)
5. Will you ever pay someone to drive their vehicle for your business?

If you answered yes to any of these questions, then you need Non-Owned and Hired Auto Insurance.

For a really great article on Lessons Learned from Non-Owned and Hired Auto Insurance, click Here.
For information on Driver Training and Motivation, click Here.
For information on Driver Eligibility Criteria, click Here.  (This links to driver criteria for Philadelphia Insurance)

AM I OVERPAYING? (From: Insurance: The One Question Everyone Asks)

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“Am I overpaying?”

That’s a question that every consumer asks from time to time. Everyone is curious and concerned as to whether he or she is getting a good value for the money, whether it’s for a candy bar, a car or an airline ticket.

It’s a good question to ask about insurance, too. After all, Americans spend a lot of money on insurance for homes, autos and businesses. In 2008, American drivers spent $161 billion for personal automobile insurance, reported the A.M. Best Co., an insurance research and ratings firm.

This large market for auto insurance is highly competitive. Consumers play a large part in keeping insurance rates competitive by virtue of shopping—whether online, by telephone or on the World Wide Web. More than one of four (about 28 percent) of auto insurance buyers shopped around for car insurance in 2009, reported J.D. Power & Associates in its 2009 national auto insurance study.

But consumers aren’t the only ones shopping around for auto insurance. So too do independent insurance agents, including Trusted Choice® insurance professionals.

On average, Trusted Choice® agents provide consumers with property/casualty insurance options from eight different insurance carriers, reported the 2008 agency universe study conducted by Future One, a collaboration of the Independent Insurance Agents and Brokers of America (the Big “I”) and leading independent agency companies. For automobile insurance, those agents may compare rates and coverages at even more insurance companies, through their use of software that allows them to compare multiple policies and multiple carriers.

For auto insurance buyers, research showed that independent agents rank most highly on the most important element of customer satisfaction. The J.D. Power study measures customer satisfaction with auto insurance companies across five factors (in order of importance): interaction, policy offerings, billing and payment, price and claims. Insurers who sell their auto insurance products through agents performed “stronger in the interaction factor than do direct insurers,” reported J.D. Power.

Overall, customer satisfaction with auto insurance companies reached a five-year high in 2009, reported the J.D. Power study. The biggest improvement in satisfaction among the five factors has been in price. Interestingly, 42 percent of customers in 2009 reported that their auto insurance premiums declined without switching insurers.

Are you overpaying for auto insurance? Thanks to a competitive market that includes Trusted Choice® independent insurance agents, the answer probably is no. If you’re not sure, ask a Trusted Choice® agency to review your options.

source: TrustedChoice.com, October 2009

REDUCING AUTO INSURANCE FRAUD

The insurance industry calculates that property and casualty insurance fraud costs our society over $30 billion annually. According to some estimates, this insurance fraud adds about $200 to $300 annually to total insurance premiums for the average household. Auto insurance fraud accounts for a large segment of these losses, which are ultimately passed on to you, the auto insurance consumer, in the form of higher automobile insurance premiums.

Auto insurance fraud can occur in a variety of ways. For example, unethical groups of doctors and lawyers can team together to overtreat patients and thus exaggerate claims. Staged accidents are also a common problem, in which a conspirator’s car pulls in front of an innocent driver’s automobile and stops suddenly. This causes the innocent driver to rear-end the conspirator’s ve-hicle. Thus, the innocent driver often believes he or she is negligent. Typical victims are usually driving alone in new and expensive vehicles. In many cases, the criminal driver uses a large, older sedan with several passengers inside.

There are several ways by which you can avoid becoming a victim of these “staged accidents,” including the following.

• Avoid tailgating at all times and focus on driving defensively.
• Obtain the names and driver’s license numbers of all occupants in the other car.
• Attain the names and key information of witnesses.
• Report your suspicions to your insurance agent immediately.Preview

In addition, auto insurance companies emphasize several key steps drivers can take to fight auto insurance fraud in general, including the following.

• Be aware of all the various ways in which auto insurance fraud can occur. Your agent is a good source for this information.
• If you believe you are a victim of auto insurance fraud, report your concerns to your agent.
• Communicate with your legislative representative about this issue and request new laws to assist the fight against automobile insurance fraud.

KIDS, CARS, AND CAR SEATS

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According to NBC News, about 340 children have died from being left unattended in a vehicle in the last 10 years. Such tragedy does not have to happen; it can be avoided. Here are some suggestions you might want to incorporate into your daily routine if you have small children in your car.

• Put something you'll need like your cell phone, handbag, lunch, or briefcase on the floor in the back seat.
• Get into the habit of always opening the back door of your vehicle every time you reach your destination.
• Ask your child's day care provider to phone you if your child doesn't show up when expected. Many children's lives could have been saved by a telephone call. Give childcare providers all phone numbers, including those of family members or friends.
• If you see a child alone in a vehicle, call 911 immediately.
• Keep a large teddy bear in the child's car seat when it's not occupied. When the child is placed in the seat, put the teddy bear in the front passenger seat.

Remember that driving a car is the single most dangerous thing we do each day. Always be sure to use an age-appropriate car seat when you have a small child in the car.

And, although flying on a scheduled airliner is certainly safer than riding in a car, don't forget the car seat if you are flying with your little one.

If you don't have -- or cannot afford -- a car seat, there are several agencies that can help. Please call your insurance office and they can put you in touch with the right people.

HELPING TEENAGE DRIVERS

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There are several things that parents can do to help keep their teenagers safe behind the wheel. We'd like to highlight a few of them.

• Coach your Son or Daughter. You should "coach" your teenage driver. Talk openly and frankly with him or her in order to determine his or her attitude about being behind the wheel. Work with your teen to set ground rules, such as the number of people allowed in the car, where the car may be taken, and curfew.
• Utilize Emergency Road Service. If you do not belong to a motor club, you should consider joining one that provides 24-hour emergency road service. That way, your teenager may call for help at any time if they need gas, need a jump-start, are locked out, or need a tire changed. You can also arrange with the motor club to provide service for your teen if they are in a friend's car.
• Have an Open Discussion about Driving under the Influence. While no one wants to think about the possibility of their teenager drinking and driving--or being in a car with an impaired friend at the wheel--we need to be realistic. History has shown that teenagers will experiment with alcohol. You should make it clear to your teen that driving after drinking is not acceptable. However, if they ever do drink, or are in a car with someone else who is impaired, make it clear to your teen that he or she can call you at any time of the day or night and that you will come to get them--no questions asked.

Two other effective, though more costly, things that can be done are:

1. Install a "Governor." Many vehicles--school buses and certain types of delivery vehicles are good examples--have a "governor" installed in them that restricts the amount of fuel that can be injected, thus preventing the vehicle from being driven over a certain speed. A governor in your teen's car may help keep him or her within the speed limits.
2. Install a Global Positioning System (GPS) in your car. You can program it to let you know where your teenager is driving at any time. With the GPS, you can set a radius of operation and the GPS will notify you if your teen has taken the car outside of that radius. It can even alert you when the speed limit is being exceeded. Finally, a GPS can notify you if the car is being kept out past an agreed upon curfew. We realize that this may seem like a rather extreme measure. Use of a GPS may best serve those parents who have a reason to mistrust their teenager.

When your son or daughter gets a driver's license, come into our office so we can review such options with both of you. It is important for you--and your son or daughter--to remember that, yes, your auto insurance rates will go up, but they will come down after a couple years of driving experience. However, the rates will really go up if your teenager has tickets or gets into accidents.

REDUCE YOUR SOCIAL HOST LIQUOR LIABILITY EXPOSURE

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The National Highway Traffic Safety Administration (NHTSA) estimates that nearly 13,000 people per year (about 35 per day) are killed in alcohol-impaired driving crashes.
Many of these tragic accidents happen after an inebriated person leaves a party -- an event in which the host of that party might be held liable for injuries and deaths to innocent parties. Although there might be coverage under your personal auto policy or homeowners policy if you (as the host) are held legally responsible for such a terrible accident, a wiser risk management strategy is to avoid or reduce the chance of loss altogether. With that in mind, here are some tips to consider if you (or a resident family member) occasionally host social events involving alcohol.
Surveys of youth indicate that the most common source of alcohol is the young person's own home. Thus, closely monitor social events your youth hosts to make sure there is no drinking allowed -- particularly any type of illegal underage drinking. It is wise to not allow your teenager to host a party when you are out of town.
Limit the amount of alcohol at your event.
If alcohol is served at your party, make sure that there is plenty of food. The consumption of food slows down the absorption of alcohol.
Encourage designated drivers and provide nonalcoholic drinks for these guests.
Look for signs of intoxication. An intoxicated person often has trouble walking, has slurred or loud speech, or is atypically uninhibited. There is not, however, a fool-proof method of determining whether someone is intoxicated because exceptionally tolerant individuals often do not show signs of tipsiness even though they are intoxicated.
Restrict alcohol to any near-intoxicated or intoxicated persons by offering instead some food or alternative nonalcoholic drinks.
Consider hiring trained bartenders. As they are trained to recognize and deal with intoxication, using professional bartenders can significantly reduce the risk and may help in defending a claim should there be one.
If you have a cash bar, use tickets and issue a limited number. Don't price alcohol too low because this encourages excessive drinking.
Do not allow the intoxicated guest to drive away from the event even if you have to take away his or her car keys. Instead, offer to drive them home or provide a free cab service. Soliciting the help of the guest's spouse or a close friend may help.

PURSUE THOSE AUTO INSURANCE DISCOUNTS

One way to avoid paying too much for your personal automobile insurance is to assure you are getting all the discounts you deserve. The following are discounts you should inquire about. Some may not be available in all states and from all insurers, but it doesn’t hurt to ask. These discounts may significantly affect your insurance premium.

• “Defensive Driving Discount.” This discount can save you 10 percent on most of the major coverages under your auto policy, such as liability, medical payments, and collision coverage. Defensive driving courses can cost as little as $20 and last as few as 5 or 6 hours. However, the discount normally applies for 3 years. For example, if your auto insurance premium is $100 per month, the premium is $3,600 for 3 years. If liability, collision, and medical payments or personal injury protection coverage constitute 85 percent of this $3,600 premium, the resulting premium subject to this discount is $3,060. In this scenario, the actual premium savings would be $306 (10 percent of $3,060) for that 3-year period. To get the true savings, you must deduct the cost of the defensive driving class. If the cost is $26, the savings in this example would be reduced to $280. If you spend 6 hours taking the class, you are earning $47 per hour in savings—not an unproductive way to spend a Saturday!


• “Good Student Discount.” Statistics show that good students tend to be more reliable and mature than students with marginal grades, leading to better driving decisions. Therefore, many states allow a 5 to 10 percent discount if your student driver makes good grades, usually an overall “A” or “B” average in high school or college. If your child has to pay his or her own automobile insurance, this will be another motivator for him or her to make good grades.


• “Home/Car Discount.” Many insurers offer discounts of 10 percent or more if they provide both your homeowners and personal automobile insurance. This can lower your costs on both policies.


• “Auto Safety Features.” Most insurers recognize that owners with cars containing safety features may have fewer accidents and reduced injuries. Many insurers encourage drivers to purchase cars with antilock brakes by giving small discounts for these safety features. Other insurers give discounts for vehicles with airbags and daytime running lights.


• “Auto Club and Professional Organizations.” Some insurance companies offer auto insurance discounts if you are a member of AAA or similar organizations.


• “Multicar.” Many insurance companies provide generous discounts up to 15 percent if you have multiple cars on your policy. This reduces the insurance company’s administrative costs, on a per-vehicle basis, in issuing the policy.


• “Long-Term Customer.” More insurance companies are offering discounts of 5 to 10 percent if you stay with them at least 5 years.


• “Claims-Free Customer.” If you have been insured with the same insurance company for at least 3 years and have not experienced any losses, inquire about a claims-free customer discount. These discounts help insurers retain customers with excellent driving records.