Thursday, December 13, 2012


MY RATE WENT UP AGAIN!!

Insurance rate increases! That annoying thing that seems to occur every renewal, whether it is every six months or once a year! They never seem to go down, EVER!
We all dread having to call our agent to find out, “what’s up with my rate?”  We are secretly hoping the insurance company didn’t find out about a ticket or an accident we had. 

So what if it’s not related to a ticket or an accident?

Back in 2010 an article was written about insurance rates. But this article addressed one aspect of what the public uses as the reason and disputes it. You can view the article here: http://www.huffingtonpost.com/joanne-doroshow/heres-really-why-your-ins_b_775077.html

There are many reasons rates go up and we may not like them because we do not understand them.  So let me explain very simply.

Insurance is based on statistics. For example:  If you “statistically” live in an area that has more accidents than other areas, you are bound to get into an accident. Insurance companies uses the past year or past couple of years to predict the future. They look at territory, type of vehicle, age of driver, sex of driver, driving record and coverage paid out the most. They also look at amounts of coverage you carry. 

LET ME EXPOUND.

TERRITORY

If the area you live in has an accident on the corner by your house once every week or two, insurance companies predict you will eventually be in one of those.  If you live in an area that is rural and not much traffic, the prediction is that you will not get in an accident anytime soon. Each year or two, insurance companies re-evaluate territories for accident history.

TYPE OF VEHICLE

Each year insurance companies evaluate what types of vehicles are stolen most often. You can check out Forbes for an article that was written about cars most stolen in 2011.  Here is the link:  http://www.forbes.com/sites/hannahelliott/2011/08/02/the-most-stolen-cars-in-the-country/

Also, vehicles are evaluated based on how well they do in an accident.  If your Toyota RAV-4 does well each time it’s in an accident, (doing well is defined as not incurring a lot of damage or keeping the passengers safe) then the premium for that RAV-4 will most likely go down. Now, if you have one of these vehicles, I am not saying your premium will go down.  Most likely there are other factors involved in your rate; which leads us to the next item.

AGE OF DRIVER

If you are a new driver, you are not very experienced driving on the roads. There is a chance, or prediction, that you will probably get in an accident. Some companies will apply an “inexperienced operator surcharge” to your policy because statistics have proved that you will get in an accident. It doesn’t seem fair, but statistics don’t lie.

SEX OF DRIVER

We all know that male drivers are more aggressive on the roads than females. Once again, this does not mean all male drivers.  When reports are scrutinized, they usually show more males are in accidents than females. Sorry guys.

DRIVING RECORD

Your driving record can be a bummer. Especially since it follows you for SEVERAL years! You may have sworn off getting any more tickets, but insurance companies will base your rate on those for three years, sometimes five!  A minor violation is usually a speeding, running a red light, missing a stop sign, turning on a red light when indicated not to or talking on your cell phone. They usually are counted for three years. A major violation is drunk driving, driving under the influence of drugs, driving on a suspended license (whether you knew it was suspended or not), running over a person on purpose, or leaving the scene of an accident. (Speeding in excess of 85 miles per hour can also be listed as major, depends on the state).

So based on your driving record, insurance companies predict how you will be driving. And that prediction ties in to how many accidents you will probably have or cause.  It’s similar to a trust issue you might have with your parents, partner or friends.  Once you have proven you can’t be trusted, it takes extra effort to gain that trust.  Once your ticket falls off after three years or five years, you can be trusted with lower rates again. (Once again, driving record does not completely drive the rates. I am  not promising lower rates when violations fall off).
 

COVERAGE

This is what you have chosen to put you back in the same financial situation you were in before an accident.  This is the sole reason for insurance. What coverage you choose is very important. If you have physical damage on your car, deductibles make it possible to share with the insurance company in the loss. This affects your insurance premiums.  Higher deductibles, lower insurance premiums.  And the insurance company knows with higher deductibles you will most likely submit fewer claims. The lower your deductible, the more claims you probably will submit.

When you have lower liability limits insurance companies assume many things about you.  Because rates are all about predictions, sometimes the assumptions do not apply to you.   However, it is the only way they can determine rates.  Discounts are offered as a way to give you credit for some of those predetermined “predictions”.   

When you have lower liability limits an insurance company is obligated to represent you in a suit. Whether your limits are state minimum or the highest a company offers, the obligation is still there. So an Insurance company spends the same amount of time & money for you with low limits versus higher limits. The difference is once your limits are reached, they no longer have an obligation to represent you.  Higher limits are better every time. If you can’t afford higher limits, then you need to find a middle of the road rate.  Skimp somewhere else, but not here.
 
So as you can see, explaining a rate increase isn’t always easy or even fun for an agent.  If it’s just a plain old company rate increase, you can google your company and find out yourself why.  Usually it’s because the company had more money going out in claims than it did coming in for premium.  This is another reason predicting which company will have a rate increase is almost impossible. 

As an insurance broker, we switch our policyholder to another company for lower rates one year and then the next year that company raises their rates!  It’s maddening!  But we would never know which company would take a rate increase. If we did, it would be pure guessing.
 
So next time your rate goes up, do some research of your own.

1)      Find out if your car is on the “most stolen” list or not as safe in accidents as you thought.

2)      Find out if your area you live in has had a plethora of accidents in the last year or so. (you might already know this if you had witnessed any of them).

3)      Check your motor vehicle record, had any violations you forgot about?

4)      Did you just add a young driver to your policy?  A son or daughter that is brand new to driving

 Here is a great cite for reading up on insurance situations with your car & the law:

http://www.ilawyer.com/iLawyer-com/Insurance%20Law/Insurance_Law_NY.cfm

 Most of us know it already, but it’s a great idea to brush up every once in a while.  Let me know what you think, I welcome comments.
My  next post will discuss your motor vehicle record and how insurance companies determine a violation.  STAY TUNED!!!

Tuesday, November 20, 2012



What policy to buy?


Most of you already have an insurance policy and pretty happy with your current agent or insurance company~~at least until you have a claim.
That’s when the insurance company really shines, or really stinks! 
The mendacious claims process!  Who do you call? What do you do?  How long does it take?
WHY ME!!! 
I actually heard of an insurance company whose claims adjuster came out, assessed the damage and wrote a check. Now THAT was amazing!  
That is not your everyday insurance company.  

When you are shopping the best thing to do is to check into how many insurance department complaints it has had.  Check into what others are saying about claims service and make sure you find out if it has enough money set aside to pay the claims. This would be their surplus.

Let’s talk about Surplus for a second; The definition of surplus=assets that outweigh liabilities.  This does not mean its “extra” money sitting around. You might ask if this should be returned to you.  If it is more than a certain amount of “surplus”, they elect to give it back to you in “dividends”.  That doesn’t always happen because insurance companies do not want to give that up. They know that when it comes to claims service, THIS IS WHAT DEFINES THEM. And it they can’t pay their claims, they are no good.

Most insurance companies provide the same policy and coverage. It is better for them to be easy and go along with what everyone else does.  Some have a different coverage here or there, for example, diminishing deductibles, coverage for your pet if  he’s in the car & dies from an accident, overseas rental car coverage or mechanics coverage for newer cars.  You just have to decide then and there if that is something that is beneficial to you.
I would suggest you go with the service you will be provided, because after all, we don’t need our insurance company until we have a claim. 

Let me know your thoughts or ideas!  Post comments!

Monday, October 29, 2012

ITS STORMIN' IN NEW YORK! 

Insurance companies are funny.  A storm comes and every single one of them rescind your binding authority!
You would think they are in the business to insure your property.  And they are, but not when a possible catastrophe is on its way!


We had several companies send us information that they will not honor anything bound today, cars or homes!  Too bad, a gentleman was excited about buying a brand new car today, only to find out, he couldn't take it home.  You see, he needed to prove he had insurance for that car with a binder from his agent and ID cards from the insurance company, but alas, could not.  I told the dealership that sent him, "this is not a good day to sell cars!"

BUT, if you already have insurance and a car and you are trading it in..... AND if you have comprehensive and collision coverage; you can take your new car home.  The car salesmen know that most insurance companies will extend their insurance to a newly purchased car. 

BUT BEWARE!  Find out how many days your company will allow you to go without contacting them about the new purchase.  Every company is different.  Some are 30 days, some are 14 days. 

So, let's try a quiz:

1) If a storm hits and your car is under water, is this paid under comprehensive coverage or collision? They both are applied to the physical damage of the car. 

ANSWER: Comprehensive will pay out when something totals your car other than colliding with another car or property. 

2) If you hit a deer in the road and to fix the damage on the car, what coverage is it paid under?

ANSWER:   Comprehensive coverage. Even though you "collided" with the deer (or he with you), all companies recognize this as a comp claim. (and therefore, not at fault)

3) If you hit a pothole, which coverage is this paid under?

ANSWER:  Collision.  AND it will be "at fault".  I know, it stinks.  Just try not to go down badly paved streets or  hit a pothole. 

Well, that is all for the quizzes today.  Please post a questions to get my brain a workin'........   
AND STAY SAFE OUT THERE!!!

  

Monday, October 15, 2012

Your Insurance Score is just as important as your credit score nowadays. It determines the base you will pay for your insurance premiums.

Here are a few tips on how to clean up your Insurance Score:

1) Always pay your premiums on time.

 A day here or there short is not going to hurt you.  30 days will.

2) Never allow your policy to cancel for NON-pay

 If you plan on NOT renewing, call the company and tell them,don't just let it go. 

3) Carrying bare minimum coverages affects your score - negatively.

Try to go up at least one more level on your liability limits. Its really NOT that much  more in premiums     than what  you might think!                
  

4) Credit is tied to Insurance score too.

 An insurance score SKIMS your credit.  Its a soft hit, not a hard hit. 
 Its like opening the cover of a book and reading what its about.
 You don't really know the whole story, but you get the gist.


5)  No prior insurance affects your insurance score. 

If you never had a need for a car and are just now purchasing one, you can get  into some trouble for "no  prior insurance".  What the companies are looking for is someone who knows how to manage their  insurance. If your score has been cleaned up by 1-4 above, this may not be as important. EXCEPT some  companies will not take you, no matter what. Carrying a NON-OWNED vehicle policy could help, except some premiums are pretty high for that policy.  Ask your agent.
    

 
After the base is applied, other things affect your insurance to either increase it or decrease it.


BUT THAT WILL BE ANOTHER BLOG SESSION.............

Sunday, October 7, 2012

Hi Everyone!!!   I know its not Winter yet, but I love Winter!  I love wrapping up in scarves, sweat shirts, long underwear and wool socks!   I think its all those years I spent in HOT Arizona.

This blog is going to be dedicated to Insurance matters only.  I have 26 years of insurance experience and will try my best to educate you. Most of this will be simple education. Please feel free to ask any questions you'd like.

My first concern is:
    GET INSURED!  Make sure you have adequate insurance for your needs.  REMEMBER insurance is not a maintenance plan, it is to put you back where you were before a loss.  You might think insurance is a rip-off. I can address that.  BUT what I can't address is bad customer service!

Questions?