Archive for the ‘insurance’ Category

What to do after a car accident

September 17, 2013 Leave a comment

By Tim Cadet,

1-accidentThings can be chaotic immediately after a crash, but following some basic steps can make filing your claim a little easier:

  • First and foremost: Think about your safety and those around you before thinking about your insurance. If someone is injured, call 911.
  • Stay calm. Being in a car accident is scary but getting upset will make things worse.There’s no need to call the police if you only have a dinged bumper or a scratched door.

Before an accident
Being prepared can prevent stress after an accident. Keep a copy of your insurance information and a pen and paper in your car; it will make the post-accident process much easier. Many mobile phones come equipped with a camera, but if your phone doesn’t have one or it takes low-quality photos, it’s a good idea to keep a disposable camera in your car as well. You are required by law to have proof of your insurance with you, and insurers provide cards that have all your insurance information on them. Print your insurance information out if you have recently started a new policy and don’t have an insurance card yet.

Get off the road
Before you start gathering information from the other driver after a crash, it’s important to get to safety as quickly as possible. If you had a minor fender bender, you don’t have to leave the cars where they are. The police will not come to file a report on a minor accident; however, they will come to tell you to move your vehicle. Move out of the way of oncoming traffic to keep you and the other drivers safe. But if you can’t move your car without causing further damage, don’t try. Your insurance company should be able to hire a tow truck to move it for you.

Watch what you say
After an accident, you should speak to the other driver only to get his or her information and to make sure the driver is OK. Don’t admit fault or say “I’m sorry” during your conversation as it could be used against you in court.

Gather information
Your insurance company will need certain information to file your claim. Some insurance providers offer forms that can keep you organized while gathering information. You may need to fill out information on the other drivers involved, the name of your insurance representative and whether there is damage on your car.

If you’re in a crash, write down the following information of the people involved: name, address, phone number, email address, make, model and year of the car, license plate number, insurance carrier, insurance policy number.

Take these photos, if you can:

  • Damage to your vehicle
  • Accident location
  • People involved with the accident

Get information from the officer if one is on the scene:

  • Name
  • Badge or ID number
  • Phone number
  • Police report number

Ask the police officer for a copy of the police report. The officer’s opinion of the accident will be useful if the drivers have a dispute during claims processing. The police report will also have the officer’s information on it just in case the officer is needed to testify.

Note: The other driver or the police will not need your Social Security number; don’t give it to them.

File your claim
Call your insurance company to start your claim; your insurance company’s phone number is most likely staffed 24/7. You may also be able to check on your claim process by going to your insurance company’s website. You will likely be contacted by your claims representative within 24 hours to discuss the details of your claim.

Increased premiums
After an accident that you’re responsible for, you’ll likely have to pay surcharges, which are the premium increases you will have to pay for a few years. They vary in amount from insurer to insurer, but most range from 20 percent to 40 percent of your base rate (the average cost of insurance in your state). If you pay $200 a month on auto insurance and your state’s base rate is $500, you would have to pay $100 in surcharges with a 20 percent increase. The length of surcharges varies from state to state, but they often drop after three years.

If you fit a certain profile, some insurers won’t raise your premiums if you had an accident. In most cases, you will have to be a customer with an insurance company for about nine years and never had an accident to have your rates stay the same after an accident.

via Bankrate

Categories: auto, insurance, safety, travel

How Different Types of Tickets Affect Auto Insurance Quotes

August 14, 2013 Leave a comment

Getting a ticket while driving always has an impact on car insurance rates, but the significance of the impact that is made to car insurance rates differs according to the violation. While it is important to avoid breaking laws while driving, knowing just how serious a violation can be in relation to car insurance rates can help you understand how you’ll need to budget for higher rates after getting a ticket.

Myths About Traffic Tickets

A common myth that many drivers believe is that they will not have to worry about an increase in car insurance rates if they receive a traffic ticket while traveling in a state other than the state in which their car is insured. reports that this is a misconception. Tickets in other states count against a driver just as much as tickets received in their state of residence.

More serious consequences can be suffered if a person ignores a ticket that is received in another state. License suspension and hefty fines can make a car insurance rate increase the least of a driver’s worries.

Temporary Increases in Car Insurance Rates

Nearly all types of tickets will only impact car insurance rates for a temporary period of time, but the exact length of time that rates are higher varies according to the type of ticket. According to Esurance, moving violations stop affecting car insurance rates as soon as they are removed from a person’s driving record. Some insurers prefer to put a set time limit on the effect that tickets have on rates because it may take a long time for violations to be removed from a driving record.

Moving violations relate to violations that occur when a vehicle is in motion. Speeding is the most common moving violation. Talking on a cell phone while driving or failing to use a turn signal can also be considered to be moving violations.

Many insurers choose to focus on moving violations that have occurred in the past three years. According to, when drivers are answering questions about violations in order to receive an insurance quote, they can discover the impacts of a particular violation on their auto insurance rate.

People who have been driving for a long time may have more leeway when it comes to moving violations. New drivers who have received a ticket shortly after becoming licensed may find that their rates are significantly higher than more experienced drivers.

The Impact of Serious Offenses

Serious offenses such as a DUI tend to impact car insurance rates significantly for a long period of time. InvestorPlace reveals that reckless driving and DUIs have the most significant impact on car insurance rates. Each of these violations can keep insurance rates high for up to 10 years.

Tickets can have a serious impact on the amount of money that a driver pays for a car insurance policy. Minor violations may only have a small impact on rates, but major infractions can significantly boost insurance rates for up to 10 years after the date of the violation.

via Len Penzo dot Com
Photo Credit: Elvert Barnes

Categories: insurance

How Does Information Get On a CARFAX Report?

August 13, 2013 Leave a comment


Via Broken Secrets

By Chad Upton | Editor

It’s not unusual for somebody to completely destroy their car and walk away unharmed.

This happens because newer cars are designed to crumple on impact, just like a bike helmet made from dense foam. The frame, hood and even the power train components absorb the energy from the impact in order to help protect the occupants. Of course, air bags may also deploy, which protect the occupants from hitting hard surfaces inside the vehicle.

When an insurance company declares a car as a “total loss” it means they are not going to pay to fix the car; although, they may sell the vehicle to somebody who plans to use it for spare parts. That person may then fix the car and try to sell it.

Unfortunately, a car that has been in a major accident may have hidden safety and reliability problems. So, if you’re buying a used car, you’ll want to know its history.

If you’ve ever looked at a used car, you’ve probably come across CARFAX.

It’s a service that provides historical information about used cars. For $35 or less, you can enter the VIN (vehicle identification number) of a used car and get a report about its ownership, accident history, mileage discrepancies, lemon status, flood damage, fleet use (taxi, police…etc) and many other things the seller may not want you to know.

I think this is a great idea, but I’ve always wondered how they get all the information.

I was talking to a guy that runs an auto body shop, so I asked him. He said that he has done work on cars that were nearly totaled and the information did not show up on CARFAX; he had also done minor work that has shown up.

He said that CARFAX buys info from insurance companies and other sources. Some insurance companies have a non-disclosure agreement, where they will not disclose information about your car and its accidents while other insurance companies are willing to sell that information to make money.

I verified this information with CARFAX and it’s true. CARFAX gets information from thousands of sources and has over 6 billion records on file. They have deals with motor vehicle bureaus in every US State and Canadian Province, where they get information about mileage, flood damage, titles, lemon buybacks, accidents, thefts, liens and ownership transfers.

They also get information from auto auctions, car dealers, repair and service facilities, rental companies, state inspection stations, fire departments, law enforcement, car manufacturers, import/export companies and many others. That’s not to say that all companies of these types provide this information, but many do.

In some cases, they have mutually beneficial relationships. For example, car dealers may provide information about vehicles they service, but they may also request information about used cars that they want to take as trade-ins, buy at auctions or sell to their customers.

In any case, CARFAX warns that they may not always have all of the information, since there are many sources that they do not have access to. In 2005, they had 6,100 sources of information. Now, they have grown to over 34,000 sources.

CARFAX does provide a couple of free services that may be worth while if you’re purchasing a used car. The Lemon Check is one of them. This free service, will tell you if the car you’re about to buy was ever declared a lemon, meaning it was serviced for the same problem 3 times and bought back from the owner by the manufacturer. You definitely want to avoid a lemon.

You can also perform a record check with CARFAX for free. This will tell you how many records they have on file for the VIN you entered. If you’re thinking about buying a CARFAX report, you should try this free option first to see if it’s worth buying the report about the car you’re interested in.

Sources: CARFAX (Data Sources) MSN, MyVin

Photo: Ian Hampton (cc), jasonbolonski (cc)

Categories: auto, insurance Tags: , ,

Automotive Black Boxes, Minus the Gray Area

Update 5:30 p.m. May 24: An earlier version of this story incorrectly stated that the National Highway Traffic Safety Administration will require that all new vehicles have an event data recorder. The agency is at this point only considering such a requirement.

The National Highway Traffic Safety Administration will later this year propose a requirement that all new vehicles contain an event data recorder, known more commonly as a “black box.” The device, similar to those found in aircraft, records vehicle inputs and, in the event of a crash, provides a snapshot of the final moments before impact.

That snapshot could be viewed by law enforcement, insurance companies and automakers. The device cannot be turned off, and you’ll probably know little more about it than the legal disclosure you’ll find in the owner’s manual.

The proposal looks to some like a gross overreach of government authority, or perhaps an effort by Uncle Sam, the insurance industry and even the automakers to keep tabs on what drivers are doing. But if you’re driving a car with airbags, chances are there’s already one of these devices under your hood.

Automakers have long installed electronic data recorders in their automobiles, and the National Highway Traffic Safety Administration has since late 2006 required automakers to tell consumers about the devices. That federal rule also outlines what information is recorded and stipulates that it be used to increase vehicle safety.

Now the National Highway Traffic Safety Administration is considering a proposal that would “expand the availability and future utility of EDR data” — in other words, a possible requirement that all automobiles have the devices. The proposal is expected sometime this year. A separate discussion would outline exactly what data would be collected.

Both proposals follow rules adopted in 2006, and how they affect you depends upon where you live and what data points it records. How much it will affect you in the future may depend on a new set of standards that spell out exactly what data is collected and who can access it.

An Incomplete Record
On August 17, 2002, two teenage girls in Pembroke Pines, Florida, died when their vehicle was struck by a Pontiac Firebird Firehawk driven by Edwin Matos. The girls were backing out of their driveway; investigators accessed the vehicle’s data recorder and discovered Matos had been traveling 114 mph in a residential area moments before impact.

Matos was convicted on two counts of manslaughter, but his lawyer appealed the admission of the data recorder evidence, arguing it may have malfunctioned because the car had been extensively modified. The attorney also argued the evidence was based on an evolving technology. The Florida Supreme Court upheld the conviction, however, establishing precedent in that state that data gleaned from event data recorders is admissible in court.

There are two important facts to note in this case. First, Matos was driving in Florida, one of 37 states with no statutes barring the disclosure of such data. While car companies initially claimed ownership of the data, courts eventually ruled that it belongs to vehicle owners and lessees. No federal laws govern access to black box data, and state laws eventually clarified how much data other parties could access.

“The state statutes, starting with one in California, arose out of consumer complaints about insurance companies getting the data without the vehicle owner even knowing that the data existed or had been accessed,” said Dorothy Glancy, a lawyer and professor at Santa Clara Law with extensive experience studying issues of privacy and transportation.

In most of the 13 other states, however, Matos’ black box data still would have been available to police officers armed with a warrant.

“Law enforcement generally has access to the data,” Glancy said.

The second important fact is that, though the court denied Matos’ appeal, the question of the data’s validity remained. Most manufacturers currently use proprietary systems that require specialized interpretation, and many individual event data recorders do not survive crashes intact. Other courts have ruled against the admission of the data.

Setting a Standard

The lack of uniformity concerns Tom Kowalick. He chairs the Institute of Electrical and Electronics Engineers P1616 Standards Working Group on Motor Vehicle Event Data Recorders, one of three panels aiming to set universal standards for event data recorders (EDR).

“Until recently, there has been no industry-standard or recommended practice governing EDR format, method of retrieval, or procedure for archival,” Kowalick said. “Even for a given automaker, there may not be standardized format. This lack of standardization has been an impediment to national-level studies of vehicle and roadside crash safety.”

Standards proposed in 2008 would ensure that data once available only to automakers IS publicly accessible. The new standards would make accessibility universal and prevent data tampering such as odometer fraud.

“It also addresses concerns over privacy rights by establishing standards protecting data from misuse,” Kowalick said.

The standards also propose specific guidelines and technology to prevent the modification, removal or deactivation of an event data recorder.

Those regulations would, in theory, make black box data more reliable than what is currently collected. But they also would prevent drivers from controlling the collection of information — information that they own.

“I am not sure why consumers would want a system in their vehicles that they could not control,” Glancy said.

For What Purpose?

Before shunning new cars and buying a 1953 MG TD to avoid secret tracking devices, it helps to see how the information gleaned from event data recorders is used.

General Motors has been a leader in event data recorder technology, installing them in nearly all vehicles with airbags since the early 1990s. It currently installs Bosch EDRs in all vehicles sold in North America. The technology has evolved and now collects as many as 30 data points, said Brian Everest, GM’s senior manager of field incidents.

“In the early ’90s we could get diagnostic data, seatbelt use and crash severity,” Everest said. “Currently, we can get crash severity, buckle status, precrash data related to how many events the vehicle may have been in and brake application.”

The newest vehicles also can determine steering input and whether lane departure warning systems were turned on.

That info is invaluable in determining how a car responds in a crash. With a vehicle owner or lessee’s permission, crash investigators with access to the data pass on the EDR records to GM, which can determine whether vehicle systems or driver error contributed to an accident. They also can discover what vehicle systems and technologies prevented serious injuries or death.

“It’s about trying to understand what a particular system’s performance did before a crash,” Everest said.

In addition to helping a manufacturer prevent future crashes or injuries, it can also help in defending an automaker against claims of vehicle defects.

“In a great many cases, we can use data to understand whether it had any merit to it or not,” Everest said.

Sometimes the information vindicates an automaker, such as in the case of Toyota’s recent unintended acceleration debacle. Investigators could look directly at vehicle inputs to determine what occurred in each case. In other cases — a problem with unintended low-speed airbag deployment in a 1996 Chevrolet Cavalier, for example — the data reveals a legitimate vehicle defect and leads to a recall being issued.

Safety In The Future

While automakers might like to examine every aspect of a crash, there comes a point where too much data would overload researchers and the relatively inexpensive computers used in vehicles. The last thing car makers — or consumers — want is to increase the price of a vehicle to pay for super-sophisticated event data recorders.

“We’re definitely supportive of additional data,” Everest said. “The drawback on parameters is that you want to understand how it would affect the system,” balancing the need for data with the computing power available from a low-cost EDR.

Other concerns involve law enforcement access to enhanced electronic data recorders or whether dealers or insurance companies could use that data to deny or support claims.

“It usually depends on state law whether they need a subpoena or a warrant,” Glancy said. “Lots of data just gets accessed at the crash scene or the tow yard, as I understand actual practice.”

Whether that information was accessed and interpreted by a trained professional would determine how it held up in court. Insurance companies’ access and use of the data would again be up to state law, said Glancy.

Several insurance companies contacted by declined to comment on the issue, but Leah Knapp, a spokesperson for Progressive Insurance, offered that company’s policy. “Our position on EDRs is that we would only use that data in a claims investigation with customer consent or if we’re required to do so by law,” she said. Knapp stressed that manufacturer-installed EDRs are different than incentive programs run by insurance companies that offer a discount for customers who voluntarily install monitoring devices on their vehicles.

Though dealers have access to EDR records, Everest said he knew of no instance where the information was used to void a warranty claim by proving that a customer abused a vehicle.

“Automakers have a duty to warn vehicle owners about safety recalls and the like,” Glancy said. “But you would have to look at the particular warranty to see what would be covered and what would not.” Still, she said she’d “expect that they would” eventually be able to access such data.

It comes down to a balancing act between an individual’s right to privacy and automakers’ need for data to determine the cause of a crash, between the need for a robust reporting system and the computing power available, between state interests in protecting consumers and insurance companies. Whether that balance tilts in favor of drivers remains to be seen — but at least EDR standards ensure a level starting point.

Via Wired

Photo: Chris Yarzab/Flickr

Categories: auto, insurance, news

Auto insurance potholes

April 27, 2011 Leave a comment

accidentYou may be in good hands with Allstate and it’s nice to know that State Farm is there, but most auto insurance policies still leave plenty of room to deny coverage and stick you with the bill.

That’s by design, of course. Were auto insurers to offer blanket coverage for every blunder we make behind the wheel, their business would quickly swerve off the road and into the ditch.

“A policy that covers anything that is imaginable without any exclusions would be impossible to price and equally difficult to afford,” says Lynne McChristian, Florida representative for the Insurance Information Institute.

Instead, auto insurers offer us a contract that assumes most of the risk in exchange for a commitment on our part to act responsibly.

“For some of these exposures, there is some responsibility placed on the individual, and that’s where these exclusions come in,” McChristian says.

The following is a rundown of the major potholes that may exist in your auto policy. Because policies vary widely, check with your agent if you have questions about your coverage.

Intentional damage

You may have witnessed road rage on the highway when intentional or accidental automotive slights set off “Mad Max”-like reactions and retaliation.

What those furious motorists may not realize is that blowing your top can void your auto insurance coverage should push come to not-so-gentle bumper nudge.

Auto policies typically exclude liability coverage for a driver who intentionally injures someone or causes damage to their vehicle or other property.

“It there is any intent, it’s excluded,” says Mitch Wilson of the Ohio Insurance Institute. “That’s to prevent those instances where someone wants to take out a policy because they’re tired of dealing with their neighbor.”

McChristian agrees. “We don’t want to incentivize any negative actions,” she says. “You have to give the individual some responsibility.”

Can you live with the livery exclusion?

Livery is a creaky old Shakespearean term for the carriage trade or the voluntary transfer of people or property from one place to another, as in delivery.

The problem with using your personal vehicle on a regular basis for livery is that it multiplies the risk to your auto insurer. That’s why most personal auto policies exclude all coverage — liability, medical and collision — if you routinely use your vehicle to transport people or property.

“It doesn’t even have to be a business; if you donate your time, coverage still would not apply,” Wilson says.

The livery exclusion doesn’t apply to your commute, nor is it intended to punish car pools or the office worker who makes the occasional office lunch run. But if you’re living the livery life on a regular basis, it’s best to buy a commercial auto policy designed to carry that extra risk load.

“How your vehicle is used defines the kind of policy you require,” says McChristian.

Lending or borrowing a car

Most of us have borrowed a friend’s car or loaned one without wondering what would happen in the event of a collision. Rest assured that it’s all spelled out in your insurance policy — with plenty of room to deny coverage.

“In most insurance policies, coverage goes with the car, but most of them will have an exclusion if there is a loss to any nonowned auto,” says McChristian. “So you wouldn’t be covered unless the car’s owner had coverage and you were entitled to use their vehicle.”

If you borrow a car and the owner doesn’t carry collision or their coverage is insufficient to cover the damage you cause while driving their car, the other party may go after you for the difference.

Likewise, if you loan your car to a friend, your policy may: a) cover them, b) not cover them, c) cover them only if you’re riding along with them or d) limit their coverage. That’s something to think about before you toss your buddy your keys.

Totaled car

If you lease or carry an auto loan and your vehicle is deemed unsalvageable or “totaled” following an accident, your auto insurance has you covered — almost.

When a total loss is claimed, the settlement folks typically calculate your payout based on the market value of the vehicle at the time of the crash.

Because lease holders and borrowers tend to be “upside-down” for much of the term of their auto lease or loan, meaning they owe more than the vehicle is worth, that can leave them on the hook for the gap, or the difference between the market value and the remaining balance they owe. That gap can often be several thousand dollars on a totaled car.

Most dealerships and many auto insurance companies offer loan-lease gap coverage against this costly scenario.

“When you are looking to purchase or lease a vehicle, you really need to keep that in mind,” says Wilson. “Normally, it is not a separate policy; it can be added onto the auto policy itself.”

Acts of nature

The great outdoors offers plenty of perils to vehicles. Bad weather can topple trees and hurl damaging debris. Wild animals can take up residence, chew through wiring and make nests in the upholstery. You might even suffer major damage if you hit a bear or deer.

But if your policy does not include comprehensive coverage, which protects your vehicle from damage not caused by another vehicle or done by striking a stationary object such as a telephone pole, you may be completely exposed, as in uncovered, for nature-related damages.

While comprehensive coverage is usually required if you have an auto loan or lease, it’s entirely optional otherwise.

McChristian notes another advantage of comprehensive coverage: “Acts of nature are typically covered, including flood damage,” she says. “While your homeowners policy specifically excludes flood, comprehensive typically covers it.”


As holiday shoppers often find out the hard way, just because you stow your booty in the back seat doesn’t mean it’s covered by your auto insurance if thieves make off with the packages.

In fact, most auto policies exclude from theft coverage items that aren’t part of the vehicle itself.

“Normally, if a component is built in and came with the vehicle, it’s covered,” says Wilson. “But if you have your own portable GPS, iPad, CDs or other personal items, those are going to be excluded under your auto policy for theft.”

All may not be lost if your vehicle is broken into, however.

“You may have coverage from your homeowners insurance for items stolen from your car,” he says.

via Bankrate

Categories: auto, insurance

5 best ways to cut insurance costs

March 26, 2011 Leave a comment

Save on five types of insuranceDeath and taxes are two sure things. But people sometimes forget insurance costs aren’t necessarily fixed, and getting the most policy for your money is worth checking out. All you’ll need is extra time and the tenacity to pepper your agent with knowing questions. But the payoff can be big — as much as 20 percent in savings.

These days, the odds favor consumers. Most insurers are in heated competition with each other. That means you’re likely to get insurance breaks for most types of insurance, such as home and car.

That said, here are our best tips for cutting costs on five types of insurance: car, home, disability, health and life.

Homeowners insurance: Go for discounts

Don’t forget to ply your insurance agent with questions about discounts.

“There are five to 10 discounts on house insurance that people aren’t aware of,” says Don Griffin, vice president of personal lines for Property Casualty Insurers Association of America. For example, he says, insurers offer discounts for homes built to higher building codes.

Other discounts include one for groups, such as professional organizations, and another for people over 55 that can slice up to 10 percent off your premium. Discounts for safety improvements for installing deadbolts or smoke detectors can pare another 5 percent off premiums. Also, loyalty pays off; your insurer may lower your payments 5 percent if you’re a long-term client.

All discounts vary from state to state and among companies, though. So it pays to get three to four quotes online with different insurers, says Griffin.

Auto: Is your new car an insurance hog?

Most people buy car insurance backward: buying the car and then considering insurance costs. That can be costly.

“Before you buy, compare insurance costs for different cars,” says Claire Wilkinson, vice president of global issues at Insurance Information Institute. “Their insurance costs vary, based on the likelihood of theft, etc.” Once you know your insurance costs, you can ask yourself another key question: Is it within my budget?

After kicking a car’s tires, check out its safety at the Insurance Institute for Highway Safety’s website, says Griffin. “In most cases, (having a safer car) will lower your insurance costs,” he says.

Health: Mix and match policies

In insurance, one size doesn’t fit all. And that includes one health insurance policy per family.

“People don’t realize they can mix and match policies within families,” says Carrie McLean, a consumer specialist at online insurance broker “Perhaps one member of the family needs more care, such as preventive care, and others don’t.”

For example, she says, it may be cheaper to buy an individual plan for a child than include him or her in a family plan.

The downside, she says, is that family members may go to different hospitals and doctors. “But it’s saving you money in the long-run,” says McLean.

Know your budget for the coming year, says Susan Pisano, a spokeswoman at America’s Health Insurance Plans. Do you have a chronic condition? Do you want to have a baby? Do you have a lower premium and need higher cost services? “Make sure to get your preventative services,” Pisano says.

Disability: Join group plans

Disability insurance can be expensive, so it pays to cut corners when you can, though the options are limited.

“It’s harder to save money on disability than other kinds of insurance,” says Byron Udell, CEO of AccuQuote in Chicago. “Group plans are much less expensive.”

Basically, disability policies are priced by two components: waiting periods before benefits begin and actual benefit periods. Rejiggering either option can lower your policy costs, but Udell doesn’t recommend it. For example, lengthening the policy waiting time from, say, 90 to 180 days only saves 5 percent on a premium, he says.

Life: Term insurance is a better buy
Term insurance is one of the cheapest forms of life insurance.

The savings come from buying a term policy and investing the savings on your own instead of in a policy. “Half of the life insurance policies sold are dropped,” says James Hunt, a life insurance actuary with the Consumer Federation of America. “They’re too complicated.”

If you do need life insurance, though, opt for a multicarrier broker and shop around. “Half the time people are paying more than they need

via Bankrate

Categories: finance, insurance