How much can your car insurance rates go up after one accident?

Written by admin on April 8th, 2010

This article was taken off of insure.com. I thought this would be important because I see a lot of people ask online, “how much will my auto insurance go up after one accident?” It’s a tricky situation as all auto insurance companies are different. Here is an article that might be able to help you understand better.

When shopping for car insurance, drivers choose mainly based on price, service and reputation. But one element that’s often overlooked is a company’s “surcharge schedule” — a predetermined premium increase that’s charged if you cause a car accident.
Let’s say you had a spotless driving record for the past 15 years. Last month you caused an accident. Now there’s a claim on your car insurance in order to pay for damages. You suspect your rates will go up at renewal time, but what’s a standard increase after just one accident?

“It’s the hidden secret in our business,” says Pete Giancola, owner of Pete Giancola’s Insurance Agency in Deephaven, Minn., adding that there’s “a huge difference from company to company” in surcharge amounts.

Car insurance companies are required to file rates with each state insurance department where they operate, and included in that is how they’re going to determine rates after a claim is made. In some states, insurance companies are legally required to give you a copy of the “surcharge schedule.” However, trying to read these schedules can make your head spin.

“They make it extremely difficult to read,” Giancola says.

The surcharge schedule lists points and percentages and you often have to do your own math to figure how much of an increase you would pay percentage-wise. But it may be worth the headache because the car insurance rate differences can be significant.

Many car insurance companies follow the Insurance Services Office’s (ISO) standard of increasing a premium by 20 to 40 percent of the insurer’s base rate (which is the average rate charged in the state before discounts and other adjustments, plus the insurance company’s claims-processing fee). According to the ISO, for multicar policies the surcharge is 20 percent of the base rate for the first two vehicles on the policy, and 40 percent for a single-car policy.

For example, say you insure two cars at a premium of $300 each and the insurer’s base rate is $400. After an accident, you may get a surcharge of $80 (20 percent of $400) on both, so your total surcharge would be $160 — an increase of about 27 percent on the policy.

But many insurers operate with their own surcharge ideas — some higher and some lower.

According to a 2008 surcharge schedule from State Farm, for example, if you had an accident within the first 12 months of your policy period, your base rate would increase by 10 percent after the first accident (and another 45 percent after the second). In the same scenario, a person insured with Progressive who is between the ages of 25 to 44, would see a 29.5 percent increase on his policy after the first accident (56.2 percent for the second), according to the company’s 2002 surcharge schedule. A 2005 AAA Auto Club surcharge schedule shows an increase of 30 percent for the first accident and 150 percent for the second major accident. (Insurance companies do not file new surcharge schedules each year. A new schedule is filed only when an insurance company wants to increase or decrease its rate. But it’s rare that an insurer would file to decrease, says Giancola.)

While a car insurance policy may look like a bargain initially, a high surcharge level could send your rate through the roof after an accident. “Some companies offer cheaper policies, but God forbid you have an accident,” Giancola says.

Surcharges vary by state and insurance company, and some penalize you for moving violations while others focus only on “chargeable accidents” (meaning at-fault accidents for which your insurance company must pay out more than $500 or $750 per accident after your deductible has been applied).

If you’re shopping for a car insurance policy, Giancola recommends that you ask an insurance company for a copy of its surcharge schedule (sometimes called an “insurance point plan”) before you buy. Also, ask this question: “If I have an accident within the next 12 months, what would my end result premium bewithout discounts?”

“A lot of times, the agent doesn’t want to answer that question. You gotta push it,” advises Giancola.

While individual insurers can choose differently, ISO does not recommend a surcharge on “property damage only” accidents where the damage is under $1,000. Also, if the accident is caused by a new driver (driving less than two years) who already receives a surcharge for being inexperienced, there should be no additional surcharge for his first accident. There are also state exceptions to surcharges.

Also, some insurance companies will not figure your increase based on their base rate, but rather on what you were paying before the accident. Keep in mind that your location, age and driving record, as well as the “loss experience” (meaning claims made) of drivers similar to you affect the percentage increase of your insurance premium.

Most companies try to remove the rating variables that might skew your premium increase related to “loss experience.” For example, if you live in a state in which the majority of your insurance company’s customers live in urban areas, but you live in a rural area, you don’t want your premium increase to reflect the claims of urban motorists. Likewise, if your insurance company happens to insure more youthful drivers than middle-aged drivers, and you’re middle-aged, you don’t want your rate increase to be affected by those higher-risk, higher-charged, younger drivers.

By factoring out drivers who aren’t in your age group and drivers who don’t live in your area, insurance companies say they can derive an equitable increase in your premium.

Rate increases not exactly a science

You might find yourself getting double- or triple-whammied by your individual circumstances. For example, if you make a claim and have a birthday before renewal time, your birthday might bump you into a higher risk category along with the claim, shooting your rate through the roof.

Or, if you’ve made a claim and bought a more expensive car before renewal time, you’ll likely see a significant increase — perhaps as much as 100 percent.

Remember, too, that circumstances can work in your favor at times. If you turn 40 and enter a lower-risk category, or if you buy a car that’s less expensive to insure, your savings might help offset any increase due to an accident.

The Unforgiven

Some car insurance companies give their customers a one-time “get out of jail free” pass. When you make a claim on your first at-fault accident, you might not see any increase in your premium at renewal time. This practice — sometimes known as “accident forgiveness” — is not industry-wide, so if your insurance company holds your rate steady, consider yourself lucky.

Companies that forgive first-time accidents often require that you fit a certain profile in order to escape a rate increase.

For example, State Farm Insurance Co. increases your premium for any “chargeable” accident — meaning any accident in which the company pays more than $750 in liability and collision claims combined. Its policyholders should expect to see the increase at renewal time on their liability, collision, and PIP or medical payments coverages. But State Farm also has a program called “forgive the first accident” for its policyholders who have been with the company, accident-free, for at least nine years. If you fit this description and have a chargeable accident, you won’t see any increase in your premium.

USAA members in 43 states and Washington, D.C., who keep an accident-free record for at least five years will receive a surcharge waiver for one at-fault accident per policy. If you haven’t been with the company that long, you can still buy accident forgiveness: For a few dollars extra a month, USAA lets you purchase an endorsement that forgives one at-fault accident. This endorsement is currently available in 17 states.

When you’re shopping for insurance, it’s a good idea to ask whether the insurer offers first-time accident forgiveness. It might save you a lot of money on your car insurance over the long haul.

If your slapped with a surcharge, it does not last forever. Your surcharge will drop off after a determined length of time, which varies by state. For example, if you live in Minnesota, you’re surcharged for 3 years, Giancola says. If you don’t have another accident within those three years, your premium will drop back down. If you get hit by a surcharge, ask your agent how long it will last.

 

Funny Auto Insurance Commercials

Written by admin on April 7th, 2010

Here is a list of funny auto insurance commercials I found on youtube. Hope you guys enjoy these videos.

Nationwide Auto Insurance

 

Top 20 Cheapest Cars to Insure

Written by admin on April 6th, 2010

According to Jalopnik.com, here are the top 20 cheapest cars to insure! If you want to have lower insurance rates, here is a list of cars you can choose from.

1. Mazda Tribute 2WD

2. Honda Odyssey LX

3. Mazda Tribute 4wD

4. Chrysler Town & Country LX

5. Jeep Wrangler X

6. Mazda Tribute S

7. Dodge Grand Caravan SE

8. Toyota Sienna CE

9. Hyundai Tucson GLS

10. Kia Sportage LX

11. Honda Odyssey EX

12. Hyundai Santa Fe GLS

13. Jeep Patriot Sport

14. Honda CR-V LX

15. Dodge Grand Caravan C/V

16. Mazda Tribute S

17. Toyota Sienna LE

18. Dodge Journey SE

19. Ford Escape XLS

20. GMC Canyon WT




 

Top 20 Most Expensive Cars to Insure

Written by admin on April 5th, 2010

According to a big car enthusiast website jalopnik.com, we present you the 20 most expensive cars to insure. These factors are based on a 40 year old man with a perfect driving record.

1. Porsche 911 GT2

2. Mercedes-Benz S65 AMG

3. Dodge Viper SRT-10 Coupe

4. Porsche Panamera Turbo Sedan

5. Dodge Viper SRT-10 Roadster

6. Mercedes-Benz CL600

7. Audi R8

8. Porsche Panamera S Sedan

9. Mercedes-Benz SL600

10. Porsche 911 Utrbo

11. Mercedes-Benz CL65 AMG

12. BMW M6 Convertible

13. Mercedes-Benz S600

14. Mercedes-Benz SL65 Black Series

15. Mercedes-Benz SL65

16. Mercedes-Benz CL63

17. BMW M6 Coupe

18. BMW 760Li

19. Jaguar XKR Portfoilo

20. Jaguar XKR

So there you have it guys. Top 20 most expensive cars to insure. You guys might wonder why Ferrari, Lamborghini or Bugatti Veyron is not on the list and its probably because those are super rare cars and they are not counted by the average auto insurance companies. The cars on the list are high end expensive cars that CEO’s or wealthy individuals commute to work daily in. With exotic’s such as Ferrari’s and Lamborghini’s you are eligible or a special exotic car insurance which you can read on the Auto Insurance for Classic, Exotic and Specialty Cars Section of this site.

 

9 Ways to Save Money on Auto Insurance

Written by admin on April 5th, 2010

A lot of people don’t realize this, but auto insurance is a big expense. For some people with points on their driving record, believe it or not, their auto insurance rate could cost as much as their monthly payment on their car! Here are 9 helpful tips on how to save money on your auto insurance and at the same time getting the most of out of it.

Getting the most out of your money and time.

1. Increase your deductible. I only recommend this step if you have an adequate savings fund in place to cover the cost of the deductible. While raising your deductible can significantly reduce your premiums, the last thing you want to happen is to go into debt after an accident to cover repairs or not have enough to cover the deductible.

2. Drop unnecessary coverage. Comprehensive or collision coverage for older vehicles may not make sense financially. Consider the annual cost to insure older vehicles compared to their potential sale value. It may be that it costs more to insure an older vehicle than it costs to replace one. On the other hand, if you have little savings, insurance may be a relatively inexpensive way to replace an asset worth a few thousand dollars.

3. Buy car insurance and homeowners insurance from the same provider. If you already have a homeowners policy in place, contact the insurer and ask if they offer auto insurance. Chances are you’ll receive a multi-policy discount for purchasing both from a single provider.

4. Shop around, and don’t be afraid to take your search online. Do a little comparison shopping by getting two or three quotes from multiple sources. Use the sponsors we have available. Many of them will give you a quote from many of the leading auto insurance companies, so you don’t have to go from one place to another trying to compare quotes.

5. Inquire about other discounts. When discussing your policy quote with an insurer, specifically ask about any other discounts you may qualify for, such as low-mileage driving, the installation of car alarms or the successful completion of defensive-driving courses.

6. Special discounts. Use one of our sponsors on our site to compare against many of the leading auto insurance companies. Some of them offer special discounts or promotions through our site.

7. Maintain a clean driving record. One of the quickest ways  to increase your car insurance costs is to have an accident or get a ticket for a moving violation. Tickets add points to your license and increase your insurance costs. Accidents increase your risk profile to current and potential insurers and increase premiums.

8. Clean up your credit report. Those not fond of the FICO score may find it objectionable that insurance companies use your score, in part, to determine your premium. However, statistics show a correlation between bad credit and a propensity to receive more tickets and be involved in a crash.

9. Drive “low-profile” cars. That is, drive cars that are not typically a target for thieves or radar guns. Studies have also show certain models and colors are more likely to be stopped for speeding (red sports cars, for instance). In their prime, the two cars shown above would have definitely been high-profile cars.

Saving money on car insurance is a quick way to make a significant reduction in your monthly expenses. Use our sponsors tab on the right to get a FREE Auto Insurance Quote Now!

 

Salvage Car Auto Insurance

Written by admin on April 4th, 2010

I see on Yahoo Answers and other internet forums that a lot of people ask, can I get car insurance for a salvage car? The answer is yes, you can get auto insurance for a salvage car, but it will be very difficult. Many insurance companies do not want to take the risk of insuring a salvage car. Although the term salvage can mean many things, generally it means that car was involved on an accident and the damages exceeded the value of the car. This is not always the case, but this is generally how auto insurance companies view it.

If you own a salvage vehicle and you are looking to get auto insurance, you will have to spend sometime online or calling around to smaller auto insurance companies. Also with a salvage car, you’ll most likely only be able to get liability coverages.

Many people who buy salvage cars generally use them for parts or for special track use that doesn’t require the car to be insured. If you want my honest opinion, do not buy a salvage car because you will have a hard time finding auto insurance! But if you do have a salvage car, definitely spend sometime shopping around the cheapest insurance quote!

 

California Strict About Auto Insurance

Written by admin on April 4th, 2010

Every driver in California is required to have auto insurance by law. Statistics show that 1 in 5 people in California do not have auto insurance. Auto Insurance can be expensive and nuisannce especially during this tough economy. People are willing to take the risk to drive on the open road without having car insurance. Auto insurance is absoultely necessary because it protects you.

If you are caught in driving in California without having proper proof for auto insurance, the officer will issue you a fix it ticket. If you have insurance prior to the date of getting the ticket, you can bring your auto insurance slip or policy papers to the court and pay a fix it ticket fine (probably under $35) If you don’t have auto insurance, your ticket is $500+!! After you pay the $500+ ticket, you will then be forced to get auto insurance before you can get back on the road! Now think of it this way, $500 can pay for a full year or half a year of auto insurance depending on your policy! Why waste $500 for nothing? So the lesson here is, remember to have auto insurance or you’ll be wasting a lot of money in court fees and most importantly risking yourself in the event of an accident.

Finding cheap auto insurance is not hard. There is a lot of useful information on this site and I encourage everyone who is shopping for  auto or motorcycle insurance policy to look around. Do your research and most importantly shop around before you buy!


Turn 21 today!

 

Buyer’s Guide to Cheap Motorcycle Insurance

Written by admin on April 4th, 2010

So you are looking at getting new Motorcycle? Before you head on to the dealership to purchase, you want to make sure you have motorcycle insurance lined up first! In some certain States such as California, you can’t even purchase a motorcycle without having motorcycle insurance lined up first! So, how do you get a cheap motorcycle insurance quote?

Just like getting a loan, you shop around. There are many companies that offer motorcycle insurance and your best bet in finding a cheap insurance company is to shop around and compare.

Here are some factors that motorcycle insurance companies will look at before they determine your insurance rates.

1. Your Personal Liabilities

Motorcycle insurance is similar to auto insurance. Your age and driving record will affect your insurance rates. If you have speeding tickets or accidents your rates will be high. Same with being age, if you are a first time rider and being young, your rates will be higher then an experienced rider with a clean record.

2. Where You Live & Storage

Where you live and where you work will affect your insurance rates as well. If you live or work in a high crime area, your insurance rates will be higher. A garage, an alarm or any other form of security is required for a motorcycle. Leaving your motorcycle outside with no security is a high risk for insurance companies

3. The Bike

Just like cars, the older bike is going to cost more then the new sports bike.

4. How much you ride

Depending on where you live and how often you ride will affect your rates as well. If you live in a country area with lots of twisty roads, your insurance rates might be higher. If you are only using this bike on the weekends or occasional purposes, make sure you tell your motorcycle insurance company agent and your rates should be lower.

5. Avoid Over Insuring

It doesn’t matter how much insurance you buy, because you’ll never get more then market value for your bike in the event of an accident. Keep in mind that your motorcycle insurance rate is not just based on your bike, but also your riding habits, age, and riding record. Once you find out exactly how you are going to be riding, you can then pick a insurance plan.

3rd Party Liability: Insurance that covers other people and their property in the event of an accident that is your fault.  Instead of you personally paying for the damage to the other party’s property, your insurance pays the bill.  It doesn’t cover damage to you or your property.  Most states require you to have at least liability insurance on your bike.

Full Coverage Insurance: (also called “comprehensive”) is available in different amounts, and will cover you and your property in an accident, whether the event was your fault, someone else’s, or “no-fault”.  Full coverage also extends to any passengers on your bike present in the accident.

Remember that having motorcycle insurance is very important as a rider. In the event of an accident, a serious injury is much more likely occur then being in a car accident. You want to make sure you are covered and protected at all times. The best way to get the cheapest motorcycle insurance rates is to do your research and compare!


Turn 21 today!

 

How Do Accidents Affect Your Auto Insurance Rates?

Written by admin on April 3rd, 2010

Chances are that your car is one of the most valuable assets you own. Car insurance offers the necessary protection of your investment in case of accident such as vandalism or theft. In addition, it is a requirement of lending institutions and car leasing companies. You must have full-coverage on the vehicle in order to obtain financing or leasing.

As the driver of a vehicle, you become responsible for the safety of the passengers in your vehicle; other driver’s whom you share the road with; pedestrians; and other people’s property. If you are involved in an accident, collision car insurance helps cover the costs associated with injury or damage.

If you are involved in an accident, you should contact your insurance agent immediately to begin the claim process. Your insurance agent will contact a Claims Adjuster who will assess the damage caused to your vehicle and work with you to resolve any issues, including who is at fault.

It’s important to note there are two kinds of deductibles: comprehensive and collision. Comprehensive covers damage caused to your vehicle by vandalism, hit-and-run, hitting an animal, or acts of Nature such as hail damage.

Collision covers damage caused to your vehicle due to a collision with another car while on the road. Comprehensive claims do not affect your insurance premiums, but collision claims do.

There are many factors involved when it comes to determining how your car insurance premiums will be affected due to a collision. If the accident is not your fault and your insurance company is able to reclaim its losses from the at-fault driver’s insurance company, there may be no change in your premium.If the accident is your fault, your insurance premiums are likely to increase by as much as 20 percent. This will depend on the extent of the damage and if there were injuries involved. If you are the cause of an eight car pile-up with multiple injuries, chances are good your car insurance will be cancelled when it comes time for renewal. However, if you are involved in a small fender bender with less than $2,000 in damage, you may only experience a slight increase of 3 percent or less.

Most insurance companies will forgive one collision claim. However, if you file multiple claims your premiums will increase, or your policy may end up being cancelled. Even if you are not at fault, insurance companies frown upon policyholders who are frequently involved in auto accidents.

If your insurance carrier cancels your policy due to a collision claim, you have the right to file an appeal through the Insurance Department. Be prepared to spend up to a year fighting for your rights. This is not to say you cannot win, but you must possess patience and perseverance when going up against the insurance industry giants.

If your car is valued at less than $2000, you might want to consider not filing a collision claim. This is particularly true if you have a deductible of $1500. Just because you are involved in an accident does not mean that you are required to file a claim with your insurance company.

If the damage to your vehicle is minimal, weigh the pros and cons to determine if it is worth filing the claim. Consult with your insurance company and inquire how the collision claim will affect your car insurance premium. If it will result in a premium increase over an extended period of time, do the math and see how it works out. You may discover that it is better to repair the car out-of-pocket as opposed to filing a claim.

 

Getting Auto Insurance After a DUI Conviction

Written by admin on April 1st, 2010

Obtaining auto insurance after a DUI (Driving Under the Influence) conviction can be a big challenge. Being convicted of a DUI is not something you want. It’s humiliating and expensive, from all the attorney fees to fines to license suspension. After all that’s said and done, getting auto insurance will be another big problem.

If you are convicted of a DUI, more then likely your insurance company is going to find out and deal with it in one of two ways. First your rates will go up substantially if they decide that they still want to insure you. The other way is they cancel your insurance policy because you are deemed as a high-risk driver. If your auto insurance company does decide to keep you, most states require the insurance company to provide the state motor vehicle agency (DMV, MVD) with an SR-22 Proof of Insurance Certificate, which removes your license suspension by providing the state with proof that you are insured.

While this sounds like a good alternative, the catch is that not all insurance companies offer SR-22 policies. So your policy may be non-renewed or cancelled simply because the company can no longer provide insurance for you. In some states, insurers can’t cut you off in the middle of the policy term, so be sure to check on the laws where you live.

Another less-likely scenario is that your insurance company doesn’t find out about your DUI because, for whatever reason. Occasionally, your insurer will not raise your rates or cancel you if you’ve been a long time insured with no other blemishes on your record. But this is also pretty unlikely.

If your policy is cancelled or non-renewed, you will still be able to find insurance. It will not likely be one of the preferred carriers, like AAA, Allstate or Geico, but some other well-known companies (such as State Farm and Progressive Insurance) as well as other smaller companies will cover you and file the SR-22 for you so your license may be reinstated. Your rates will most certainly be higher, particularly because a DUI violation remains on your driving record for anywhere from five years to the rest of your life, depending on the state you’re in. To find new insurance coverage after a DUI, please use one of our sponsors and compare. You’ll want to shop around and see which insurance company will provide you a policy as well as giving you an affordable cheap auto insurance rate.