In a no-fault state, it does not matter whether the insured driver or the others involved were negligent. The insurance company pays out regardless. But this only applies in twelve states. The remainder rely on the law of tort which order the party at fault to pay compensation to the other. So, if you were not at fault, your insurance company collects the compensation from the other driver and, in theory, suffers no loss. But if the other driver was not insured or underinsured, or you were at fault, your insurer now faces a loss. If this was just down to the math, the insurer would calculate a “fair” premium rate increase and slowly recover the loss. But if the insurer put up the rate every time one of its drivers was at fault, many of those drivers would move to a competing company. So the math has to bend to match social considerations. Sometimes, the insurers have to accept the loss.

In this, we need to distinguish really serious errors of judgement from more everyday inattention. A driver who has an accident because of excess alcohol or drugs will be classified as high risk and the rates will automatically rise. Few people will argue against this. But suppose you open your car door and another vehicle crashes into it. We start with the general rule you should always look before opening your door. Even if you are not on the road, there’s still a risk you might hit someone walking past. So if a vehicle hits the door as you are opening it, that looks like your fault. But if the door has been open for a reasonable period of time, other drivers should see the problem and take evasive action. This is always a 50/50 decision for the insurer, but if you hit the other family car as you are leaving your driveway, this is always going to cause more problems. The first factor is that you cannot claim on the liability policy. This only cover liabilities to third parties. Your only hope lies in having collision cover on both vehicles. This form of car insurance pays out for the repair of your own vehicle if damaged in a collision. If it’s the same insurer, try negotiating for only one deductible payment, but don’t hold out much hope on the premium rate. The next car insurance quote is likely to be higher.

The second reason is that you are not exactly overjoyed by the prospect of better fraud detection. Just imagine the sequence of events. Insurance companies have to recruit and train investigators to work alongside claims adjusters. This immediately boosts the insurer’s costs which get passed on to you in higher premium rates. Now all these eager-beaver investigators finish their training and they are released on to the current files. Suddenly everything slows down as these investigators decide whether there’s anything fishy about your claim. How long are you going to put up with someone poking around your claim to decide whether you really did suffer whiplash in that accident? At what point do you start complaining? It’s possible, of course, that these investigators may detect real fraud. If so, the savings they make could start paying their salaries and the premium rates would come down. Well that’s the theory, anyway, and we can all dream.

This leaves all those little frauds. Now we have pay-as-you-drive black boxes, this does away with the most common which was people lying about their mileage. Honest drivers with low mileage can now enjoy their justified discounts. Everyone else can go back to paying the proper rate. But this still leaves about $15 billion in other problems. You would be amazed (well, that’s probably an exaggeration) at the extent to which people lie. They forget to tell the insurers exactly who will be driving the family car, or they edit the driver’s experience, age or marital status. Relatives suddenly develop membership of clubs and affinity groups which produce discounts, and all this is before we get to those who forget to mention they are using their vehicle in a business. Yes, these are only small frauds, only barely dishonest really. But the industry estimates it loses $15 billion a year because of these little lies. That’s $15 billion we all have to cover with higher car insurance rates. So, be honest, what would you prefer: everyone telling the truth and most paying lower rates, or higher car insurance quotes to cover this continuing dishonesty?

In a perfect world, this would be resolved by a discussion at home. As a parent, you would sit down with your children and explain the risks. The statistics are available on the internet to back up your warnings. Your children would nod their heads wisely and swear by all they hold holy not to continue this dangerous practice. Except this would not work in most families. What teens say to their parents is not how they act when they are outside the home. So now comes the hard choice. Do you sit back and rely on prayer every time they drive off into the wild blue yonder, or do you take positive steps? First, a little law: it’s a criminal offense to operate any transmitter that will block or jam wireless communications. So you would face big fines if you were found jamming mobile phone signals. But it’s probably not an offense if you instal equipment in your vehicle that acts as a passive block to the signal. The reason for the distinction is that if you created a cone of silence around your vehicle by transmitting a signal to jam all the cell towers, you would cut off all the other users in your area. While this might make the roads safer, it would seriously inconvenience everyone else. More importantly, it might interfere with emergency calls for the police and ambulance. So passive shielding is probably legal because it does not interfere with any other vehicle or person on the sidewalk. Taking this simple step means you no longer have trust issues with your teen (until he or she works out how to turn it off or get round the shielding, e.g. by putting an antenna outside the vehicle).

More intrusive are the camera systems now offered by some insurers. In return for allowing active monitoring of the way in which your teens drive, they get cheaper premium rates. So if your teen signs up for a policy and agrees not to text or use the cell phone, enforcement just became easier. Similarly, if there’s agreement limiting the number of passengers, you have it on disk. Yes this is cheap car insurance for your teen courtesy of Big Brother, but it’s also helping to keep him or her alive. Statistics show a remarkable improvement in driving when teens know the cameras are watching. So this all comes back to your door the next time you are looking for car insurance quotes. How far do you want to go?

Once an area is hit with a natural disaster, rates will naturally rise since that occurrence means a higher likelihood of future occurrences; therefore, more people are going to make claims from that area. Live in a Northeastern state? From Delaware to Vermont, your premiums are likely to rise because of this unprecedented flooding and potential for damage to your vehicle. Worse, scientists agree that Irene is probably a phenomenon related to climate change, which means we can expect a repeat of Irene’s push into the Northeast.

Since there is nothing you can do to avoid these raised rates other than leaving the area, you can try to mitigate this increase by lowering your monthly premium in other ways, such as making yourself look better to the agency by improving your credit, remaining a loyal customer, and maintaining a good driving record. You can also consider raising your deductible.

What To Do In A Natural Disaster

Catastrophes of nature are becoming more and more common as years go by, so you had better be prepared. Use these tips to protect yourself.

Take Photos And Protect The Scene

If your car is damaged by a natural occurrence like a hurricane, the first thing to do is to treat the area like a crime scene and avoid moving anything so the insurance agency can inspect the damage. Take photos of the scene so that you have an undeniable record in case you have a dispute with the car insurance company.

Contact Your Insurer

In a natural disaster many people will be contacting the agency simultaneously, which will make the process take significantly longer, but it’s important that you report damage as soon as possible, and the earlier you make the claim, the higher on the list you’ll be for processing.

Protect Against Secondary Damage

Secondary damage occurs as a result of the initial damage. For example, if your car window is broken from the hurricane, your car insurance company will cover that damage. However if you don’t cover the window with plastic and subsequent rains ruin the vehicle’s interior, that will not be covered.

Know What Your Policy Covers

Comprehensive coverage protects your vehicle against damage from more than just other vehicles and likely includes flooding and other natural disasters, so make sure you check with your agency to get your money’s worth. If you live in an area with high risk of hurricanes, you are likely already covered in either your auto or home insurance policy. However, if you only have liability coverage and your homeowner’s insurance won’t cover it, you’re not going to get any help.

Ultimately, all of these tips can be put under knowledge (of your claim) and discipline (to act quickly). If you know what your policy covers, how natural disasters affect insurance premiums, and how to deal with the damage, you’re in the best position possible.

Despite the fact that all companies use different methods of calculating their rates the insurers use the same set of factors to determine how much it will cost for a particular driver to insure his vehicle. While some of these factors may seem strange from the customer’s point of view you should remember that the most important thing for the insurer is the risk involved in covering a particular driver. And each factor used by the insurance companies and indicated in the quote form lets the provider asses the risk and set his rates accordingly.

There are two sets of factors that determine the risk for the insurer. The first set concerns all the details of the car being insured: its make and model, production year, modification, safety features and ratings, repair costs, theft rates, potential harm to passengers and damage to other vehicles in the course of the accident, top speed, engine volume and other less significant things. These factors help the insurer determine the general probability of the car ending up in the accident and the approximate value of the claim being filed. For example sports cars are more prone to ending up in accidents than luxury vehicles, yet the latter have more significant costs involved when insuring them. So the company wants to know from the start what will be the cost involved in insuring a particular vehicle.

The second set of factors refers to the person willing to get coverage for their vehicle. These factors help the insurer determine how it is likely for that person to file a claim, since there are many links drawn from statistics that reflect such a risk. So when buying car insurance you will be asked to indicate your age, gender, place of residence, education, driving record, credit rating, marital status and other optional data that is usually used for statistics. All these factors give the insurer a clear idea of whether the person will use car insurance coverage often or won’t need any coverage at all for a long period of time. And the rates will be set accordingly. For example people with higher education are less prone to end up in accidents while people with a poor credit rating file insurance claims more often.

Keep all these things in mind when looking for car insurance. The good news is that each company uses different weight of factors in their formulas. So if there’s a particular factor that isn’t as favorable as you would wish to there are still companies that will pay less attention to it. And your aim will be finding such a provider when shopping around for car insurance.

Let’s first talk about car insurance from the provider’s point of view. The most important aspect of providing insurance of any kind is assessing the risk of insuring every new client. All the people are different and if one client may never need the coverage another car owner may file several claims in a single year. Each claim filed means that the coverage will be paid out by the provider and that’s usually a lot of money. That’s why it is very important for the insurance provider to be able to determine the risk associated with insuring each client separately. There are different factors being used when doing so, which were observed to be statistically linked to the probability of a person to file a claim. And at a certain point specialists have made an observation that the likelihood of filing a car insurance claim is strongly linked to the person’s credit rating.

People with a good credit score have been observed to file insurance claims far less often that those with a poor credit rating. And as the score reaches the opposite extremes the relation becomes even more pronounced. Specialists speculate that the ability to organize own finances can tell us a lot about a person and how he or she is driving a car. People who tend to be well organized and have good credit ratings take less risks while behind the wheel, do not tend to exceed the speeding limit or perform any other traffic violations, which in turn reduces the risk of such drivers ending up in an accident. People with a poor credit score, on the other hand, are less organized and tend to be reckless on the road which eventually increases the risk of them having accidents and filing claims respectively.

Now, some of you might say that it’s illegal to use a person’s credit report for the purpose of car insurance risk assessment. However, insurance provider have the legal right to inquire for a credit report on a particular person even without the person knowing it with the condition of non-disclosure to third parties. Still, if you’re worried by the fact that someone uses your credit rating without your consent or feel that your score isn’t that beneficial for your car insurance rates there’s still a possibility to find a provider who doesn’t use credit scores when calculating rates. There are such companies all across the country so you have the option of purchasing your policy from them as well.

Let’s start with an accident in which your vehicle is damaged. Your first instinct is to repair. The insurer gets estimates. If it’s going to cost more than the market value of your vehicle, the insurer will offer you a check. Now comes the really sad part. The check is for less than you expect. This is not the price you paid. This is not the price you think the vehicle would command if you advertised it for sale. This is the price the insurer thinks you will have to pay to buy a similar replacement. So you may have showered love on this vehicle. Its paint may gleam in the morning sun and it has been perfectly maintained. You look at the check and see it will only buy an unloved wreck. But there’s worse to come. Suppose your vehicle was bought using an auto loan and the amount of the check will only pay off a part of the money outstanding on the loan. To cover this gap, there’s a separate insurance policy you can buy. That way, there will always be enough to pay off whatever is owing to the bank or finance company.

Then come all the woes of a stolen vehicle and its contents. Let’s start with all the things on the back seat and in the trunk. You will find the auto policy excludes the value of anything that’s not a part of the vehicle. Your only hope of recovering the value of whatever is lost with the vehicle is your home insurance policy. You need to check the wording of the policy, but most will cover the value of items like your notebook or CDs that would normally be a permanent part of your home contents. It can be more difficult if you have just filled the trunk with food from your local store. Check the wording of any insurance that comes with the credit card you used to pay. Some cover the theft of new purchases. As to the value of the vehicle itself, you run into the same problem as with collision cover. That market value may be a lot less than you owe on the vehicle.

Insurance policies are all about the insurer collecting in the premiums from you and paying out as little as possible. So when you get your car insurance quotes, read the small print to find out what is covered. Remember, cheap car insurance is usually a false economy.

One of the more common terms where this applies is the work exclusion clause. Let’s take the obvious extremes. If you run your own business and need to drive a vehicle, you should buy a commercial policy. If you work in an office and only use your vehicle to drive to and from work, a personal policy works fine. But there’s a big grey area in the middle where your employer might ask you to drive your own vehicle. The general rule would be that, if this only happens once in a blue moon, the personal policy will be sufficient. But if this is a regular part of your job, a commercial policy will be needed. In the best cases, your employer will provide a vehicle and insure it for you. But life’s not always so convenient. In a recent case decided in Minnesota, a man was working as an independent contractor, picking up work wherever he could. At the time of the accident, he was paid to deliver library books and used his own car. There was a work exclusion term in his policy.

This is quite a common practice. During the recession and continuing today, people take whatever work they can find. Because the rates of pay are low, it’s uneconomic to buy a commercial policy, so people take the risk on their personal policies. Although they know they will be driving more miles and the risk of an accident increases, they believe “occasional” use for business purposes will be covered. Insurers want to price the risks separately, and try to hold a clear line between personal and the more expensive commercial policies. The Supreme Court decided the exclusion term did not apply to this insured.

This decision is going to have a significant effect on car insurance rates in Minnesota. Now the exclusion clause has been struck down, insurers may find more employers instruct their employees to use their own vehicles on private insurance. This is going to drive up the value of claims and the car insurance quotes must rise to cover those claims. So while this decision is good news for this particular insured, it’s probably going to end up costing everyone with a personal policy more money. Employers, however, may find their commercial rates fall as the risks are transferred to their employees’ policies. Remember, this is just one state, but the issue affects you no matter where you live.

While electric motor vehicles haven’t been around for long enough to speak about any lengthy claims history, hybrid cars have been on the market for almost a decade and insurance providers have all the statistics they need to determine adequate insurance rates for such vehicles. And to much surprise, owning a hybrid vehicle doesn’t automatically mean that you’ll get better insurance rates.

The insurance company won’t give you better rates just because you’re driving a hybrid (unless they offer special discounts for this type of vehicles). Each car model is taken into evaluation and the premiums a car owner is charged with depend on the claims history through different coverage domains. For example, the popular Toyota Prius has the following ratings across the majority of car insurance providers:

- Collision Damage Index. The evaluation of claims assigns the Prius with “D,” which is higher than average in terms of premiums.
- Damage Theft Index. In this category the Prius also gets a “D”.
- Liability Rating Index. With regards to third party liability, the Prius scores with a higher “B”, which reflects in lower than average premiums.

As you see, the popular hybrid model doesn’t perform any better than the majority of other vehicles, and there are many ordinary drive cars that have better scores than this hybrid. A head to head comparison of another popular hybrid model – Toyota Camry Hybrid – with its internal combustion engine analogue indicates that they both have the same scores across all coverage types. What this means is that there’s no particular benefit from owning a hybrid drive if you’re looking for lower car insurance rates, unless you find a company that offers special discounts for hybrid drives.

As for electric cars, there aren’t as widespread as hybrid vehicles and there’s no sufficient data regarding claim history with these vehicles. So by far the insurance companies tend to rate them “neutrally” until sufficient amount of information is accumulated. Still, there’s room for speculation regarding car insurance quotes for electric drive vehicles as we have a recent example in hybrids of how the rates can change over time. It’s likely that insurance rates for electric cars will increase at first because the repair costs with such cars are higher than with ordinary vehicles. But as the number of such vehicles will grow, newer models will be introduced and the level of technology will become more advanced the cost of repair such vehicles will drop and so will the average insurance rates for electric motor cars. But only the future will tell whether it’ll be this way or not.

Whether you’re into environmental issues or just can’t stand paying all those extra dollars to fill up your tank, there’s a growing movement in the insurance market you should be watching. This is the pay-as-you-drive policy. This is a very simple change. At present, the majority of companies offer discounts to those who say they drive less. But there’s a lot of cheating going on and it’s been difficult for the insurers to keep tabs on who plays by the rules. Well, technology is catching up with drivers in a real sense. Alongside the fitting of GPS transmitters, many new makes and models also carry on-board computer systems that monitor the performance of the engine and all the consumables like brake pads. This is great because, when something goes wrong, it’s easier to hitch your vehicle up to a computer and ask it what’s wrong. So, for insurance companies, you can have your vehicle transmit data on how many miles you drive at different times of the day. This will give you major savings if you only drive a few miles at off-peak times. Obviously, this will produce discounts for seniors and homemakers who only make short trips during the day.

For those who don’t have all this technology built in, some insurance companies are offering black boxes that will do the same job. Alternatively, you can just turn up at a monitoring station once a month for an authorized agent to check your odometer reading. This type of policy has the big advantage that, once you eliminate the cheats, the genuine low-mileage drivers can be given more discount. The only problem is the invasion of your privacy. Do you care the insurance company could know where and when you drive? If not, the bigger insurers who are rolling out big advertising programs reckon that the auto insurance quotes could fall by as much as 50% for those who drive the least. The others who routinely commute long distances or drive at more dangerous times of the early morning and late evening can stay on a conventional policy. Look out for this in your state. You should get car insurance quotes just to see whether the savings will justify a change.