8 Questions to Ask for Car Insurance

Courtesy of iii.org
Make sure your car coverage reflects your needs and budget

The vehicle you own, your personal priorities and your budget all factor into your unique auto insurance needs. Before comparing policies and insurers, evaluate how you use your car and what risks you face to figure out what options make the best sense for you.

1. How much do you drive?

Do you absolutely need your car every day—for instance, to commute to work or drive the kids to school and activities? Do you drive 100 miles a month or closer to 1,000 or more? Make sure your policy reflects how much you use your car. If you don’t drive a lot, you may want to opt for mileage-based insurance.

2. Will you be using your car for work?

If you use your car not just to get to work, but to perform tasks for which you get paid, commercial auto insurance is a necessity. A personal auto policy will not provide coverage if you transport paying passengers through a ride-share service, deliver pizzas, drive as a courier or use your car for other commercial activities.

3. What type of car do you drive?

Insurers have mountains of data, and they know in precise detail what types of cars, makes and models are more—or less—likely to incur claims. A flashy sports car with a powerful engine may be more likely to be stolen and its bodywork costs will be more than on a mid-sized sedan—and your insurance will be priced accordingly. Some types of cars—such as modified or classic cars—require special insurance. By the same token, you may receive discounts if you have a “safe” car—one with the latest safety features and a good safety record.

4. How much do you love your car?

If you love the way your vehicle looks and take pride in its appearance, you’ll likely want it fixed perfectly—or replaced with the same model—if it gets damaged. That means you’ll probably to consider the fullest range of insurance—including collision, comprehensive and glass coverage. On the other hand, if you drive a beater, see cars merely as transportation and want to save on premiums, you might prefer to limit your policy to liability.

5. Where do you live—and park your car?

Where you live will impact your insurance rates—and it may be a factor in what coverage you purchase. For example, cars parked on the street in urban areas face a greater risk for theft or vandalism, so comprehensive coverage might be a good option. You may discover that your premium rates are lower if you move from a city to a suburb.

6. Who else will be driving the car?

Generally, your car insurance will cover other occasional drivers. However, if other drivers live with you and use your car—whether a spouse, a teen driver or a housemate—they should be listed on your policy.

7. What are your legal obligations?

Nearly every state requires that you carry minimum liability coverage for your car. At the very least, you need to make sure your policy complies with state mandates. However, the levels of required coverage are generally pretty low. Keep in mind that, if you are involved in a serious accident, you may be sued for a large sum of money. Depending on your assets and financial risk tolerance, to be safe, you’ll probably want to purchase a higher level of liability coverage.

8. Is your car financed or leased?

If you still owe money on your car or have to return it in good condition when a lease expires, you’ll likely be required to insure the car for its full value—and even for any gap between what you owe and the car’s market value. Collision and comprehensive will cover damage to your car—and supplemental gap insurance will cover the rest.

Keep in mind that your insurance options and costs will also be affected by your age, gender and driving record. Be aware too that your credit score can also impact your insurance rates. Once you’ve looked at your needs and priorities, and understood how insurance options will match them, you’ll be better prepared to make an informed decision about the types and levels of coverage to buy.

Auto Accidents & Distracted Drivers, Continued

Courtesy of iii.org

BACKGROUND

Cellphones play an integral role in our society. However, the convenience they offer must be judged against the hazards they pose. Their use contributes to the problem of inattentive driving, which also includes talking, eating, putting on make up and attending to children.

As many as 40 countries may restrict or prohibit the use of cellphones while driving. Countries reported to have laws related to cellphone use include Australia, Austria, Belgium, Brazil, Botswana, Chile, the Czech Republic, Denmark, Egypt, Finland, France, Germany, Greece, Hungary, India, Ireland, Israel, Italy, Japan, Jordan, Kenya, Malaysia, the Netherlands, Norway, the Philippines, Poland, Portugal, Romania, Russia, Singapore, the Slovak Republic, Slovenia, South Africa, South Korea, Spain, Sweden, Switzerland, Taiwan, Turkey, Turkmenistan, the United Kingdom and Zimbabwe. Most countries prohibit the use of hand-held phones while driving.

Supporters of restrictions on driving while using a cellphone say that the distractions associated with cellphone use while driving are far greater than other distractions. Conversations using a cellphone demand greater continuous concentration, which diverts the driver’s eyes from the road and his mind from driving. Opponents of cellphone restrictions say drivers should be educated about the effects of all driver distractions. They also say that existing laws that regulate driving should be more strictly enforced.

Earlier Studies: Over the past decade numerous studies have been conducted on driver inattention, in particular focusing on the use of cellphones. Below is a summary of some these studies.

Motorists who use cellphones while driving are four times as likely to get into crashes serious enough to injure themselves, according to a study of drivers in Perth, Australia, conducted by the Insurance Institute for Highway Safety. The results, published in July 2005, suggest that banning hand-held phone use will not necessarily improve safety if drivers simply switch to hand-free phones. The study found that injury crash risk didn’t vary with type of phone.

Many studies have shown that using hand-held cellphones while driving can constitute a hazardous distraction. However, the theory that hands-free sets are safer has been challenged by the findings of several studies. A study from researchers at the University of Utah, published in the summer 2006 issue of Human Factors, the quarterly journal of the Human Factors and Ergonomics Society, concludes that talking on a cellphone while driving is as dangerous as driving drunk, even if the phone is a hands-free model. An earlier study by researchers at the university found that motorists who talked on hands-free cellphones were 18 percent slower in braking and took 17 percent longer to regain the speed they lost when they braked.

A September 2004 study from the National Highway Traffic Safety Administration (NHTSA) found that drivers using hand-free cellphones had to redial calls 40 percent of the time, compared with 18 percent for drivers using hand-held sets, suggesting that hands-free sets may provide drivers with a false sense of ease.

A study released in April 2006 found that almost 80 percent of crashes and 65 percent of near-crashes involved some form of driver inattention within three seconds of the event. The study, The 100-Car Naturalistic Driving Study, conducted by the Virginia Tech Transportation Institute and the NHTSA, broke new ground. (Earlier research found that driver inattention was responsible for 25 to 30 percent of crashes.) The newer study found that the most common distraction is the use of cellphones, followed by drowsiness. However, cellphone use is far less likely to be the cause of a crash or near-miss than other distractions, according to the study. For example, while reaching for a moving object such as a falling cup increased the risk of a crash or near-crash by nine times, talking or listening on a hand-held cellphone only increased the risk by 1.3 times.

Employer and Manufacturer Liability: Although only a handful of high-profile cases have gone to court, employers are still concerned that they might be held liable for accidents caused by their employees while driving and conducting work-related conversations on cellphones. Under the doctrine of vicarious responsibility, employers may be held legally accountable for the negligent acts of employees committed in the course of employment. Employers may also be found negligent if they fail to put in place a policy for the safe use of cellphones. In response, many companies have established cellphone usage policies. Some allow employees to conduct business over the phone as long as they pull over to the side of the road or into a parking lot. Others have completely banned the use of all wireless devices.

In an article published in the June 2003 edition of the North Dakota Law Review, attorney Jordan Michael proposed a theory of cellphone manufacturer liability for auto accidents if they fail to warn users of the dangers of driving and talking on the phone at the same time. The theory holds that maker liability would be similar to the liability of employers who encourage or demand cellphone use on the road. Holding manufacturers liable would cover all persons who drive and use cellphones for personal calls. Michael notes that some car rental agencies have already placed warnings on embedded cellphones in their cars.

Has Your Car Insurance Been Cancelled?

Courtesy of iii.org

There’s a difference between an insurance company cancelling a policy and choosing not to renew it. Learn why your insurance might not be renewed

Auto insurance cancellation

Insurance companies cannot cancel a policy that has been in force for more than 60 days except when:

  • You fail to pay the premium
  • You have committed fraud or made serious misrepresentations on your application
  • Your drivers license has been revoked or suspended.

Auto insurance non-renewal

Either you or your insurance company can decide not to renew the policy when it expires. Your insurance company must give you a certain number of days notice and explain the reason for not renewing before it drops your policy (the exact timeframes and rules will depend on the state in which you live).

There are a number of reasons an insurance company may choose not to renew a policy, and it may have nothing to do with you personally. For example, your insurer may have decided to drop that particular type of insurance or to write fewer policies where you live.

However, a nonrenewal can also be due to your record or your actions. Doing something to considerably raise the insurance company’s risk—like driving drunk—would be cause for non-renewal.

If you’ve been told your policy is not being renewed and you want a further explanation or think the reason is unfair, call the insurance company’s consumer affairs division. If you don’t get a satisfactory explanation, contact your state insurance department.

Note that nonrenewal at one insurer doesn’t necessarily mean you’ll be charged a higher premium at another insurance company.

Do Your Business Vehicles Need Insurance?

Courtesy of iii.org

Whether you own or lease a single business car or an entire fleet of commercial vehicles, you’ll need to purchase commercial auto insurance. Your insurance professional can help you weigh your risks and evaluate coverage options.

But even with insurance in place, you’ll want to take steps to prevent accidents and protect your employees and vehicles. Your business can reduce the chance of an accident by establishing and enforcing the following practices and policies.

Hard-and-fast driving rules

When it comes to the safety of employees and the protection of your vehicles, you should set certain firm driving rules that must be followed at all times, including:

  • Mandatory seat belt use – Nearly every state has a seat belt law. Seat belt use helps prevent deaths and limit the severity of injuries in vehicle accidents. There is no reasonable excuse for not using a seat belt.
  • Zero tolerance for intoxicants – Even one alcoholic beverage can impair a driver’s reaction time. Employees should never drink or use other intoxicants prior to using business vehicles.
  • No cellphone use – Distracted driving is a leading cause of accidents, and cellphone use while driving is banned in some states. Prohibit employees from taking calls or texting while driving.

Vehicle use guidelines

Other rules may be more flexible, but you should consider instituting policies and adhering to the following practices yourself as appropriate:

  • Limit non-business use of vehicles – While some employees use the same car for work and personal use, generally limit business vehicle use to work-related travel.
  • Slow down – Scheduling should allow sufficient travel time between meetings and assignments. Do not create such a frantic pace of work that employees are encouraged to speed. In addition to reducing the risk of accidents, driving the speed limit also will help control fuel costs.
  • Lock and secure vehicles – Employees should always lock vehicles when on the job. Whenever possible, vehicles should be parked in secure, well-lighted areas.

Employee-focused practices to reduce vehicle risk

  • Know your employees – Before hiring employees to drive company vehicles, check their driving record with the motor vehicle department for past infractions. Limit or ban driving by employees with a history of accidents or moving violations. Employees should also be required to report any accidents they have while not working. In addition, recognize that some personality traits—such as a bad temper—can raise the risk of auto accidents.
  • Provide training – Employees who regularly drive work vehicles—or are taking on a new assignment requiring vehicle use—should be provided with drivers training. This course may just be a refresher for some, but it should cover key safety practices such as following distances and proper backing techniques.
  • Recognize safe drivers – For businesses in which driving is central—such as a florist or a moving company—establish a program to recognize and reward safe drivers. You may also want to reward a department or the whole company for accident-free periods.

Responding to an accident

The above practices and policies can help minimize the risk to your business vehicles, but they cannot entirely prevent accidents from happening. If a business vehicle is involved in an accident, you’ll want to help your employee-driver respond appropriately and proceed with filing an insurance claim. The following practices and steps will help your business and the involved employee recover and get back to work.

  • Establish procedures in the event of an accident – Employees using company vehicles should be trained what to do if an accident occurs. This includes not leaving the scene of an accident, contacting the police, and collecting information (license plate numbers, contact information, insurance information, etc.) from the affected parties and any witnesses. The accident should also be reported to appropriate personnel at work. Consider using the incident as an opportunity to educate all employees who drive company vehicles about what to do if they are involved in an accident.
  • Contact your insurance professional and file a claim with your insurer – As soon as possible, contact your insurance professional to report the accident and begin the claims filing process. It’s especially important to work immediately with your insurance team if anyone has been injured in the accident. Follow the guidance of your insurer in a timely manner, such as getting estimates for repairs.

Remember too, that auto insurance claims are not limited to accidents. You may also need to file a claim if your vehicle is vandalized, stolen or damaged from an event other than an accident, such as fire or severe weather.

 

Lowering Your Auto Insurance

Courtesy of iii.org

One of the best ways to keep your auto insurance costs down is to have a good driving record.

Listed below are other things you can do to lower your insurance costs.

1. Shop around

Prices vary from company to company, so it pays to shop around. Get at least three price quotes. You can call companies directly or access information on the Internet. Your state insurance department may also provide comparisons of prices charged by major insurers.

You buy insurance to protect you financially and provide peace of mind. It’s important to pick a company that is financially stable. Check the financial health of insurance companies with rating companies such as A.M. Best (www.ambest.com) and Standard & Poor’s (www.standardandpoors.com/ratings) and consult consumer magazines.

Get quotes from different types of insurance companies. Some sell through their own agents. These agencies have the same name as the insurance company. Some sell through independent agents who offer policies from several insurance companies. Others do not use agents. They sell directly to consumers over the phone or via the Internet.

Don’t shop by price alone. Ask friends and relatives for their recommendations. Contact your state insurance department to find out whether they provide information on consumer complaints by company. Pick an agent or company representative that takes the time to answer your questions. You can use the checklist on the back of this brochure to help you compare quotes from insurers.

2. Before you buy a car, compare insurance costs

Before you buy a new or used car, check into insurance costs. Car insurance premiums are based in part on the car’s price, the cost to repair it, its overall safety record and the likelihood of theft. Many insurers offer discounts for features that reduce the risk of injuries or theft. To help you decide what car to buy, you can get information from the Insurance Institute for Highway Safety (www.iihs.org).

3. Ask for higher deductibles

Deductibles are what you pay before your insurance policy kicks in. By requesting higher deductibles, you can lower your costs substantially. For example, increasing your deductible from $200 to $500 could reduce your collision and comprehensive coverage cost by 15 to 30 percent. Going to a $1,000 deductible can save you 40 percent or more. Before choosing a higher deductible, be sure you have enough money set aside to pay it if you have a claim.

4. Reduce coverage on older cars

Consider dropping collision and/or comprehensive coverages on older cars. If your car is worth less than 10 times the premium, purchasing the coverage may not be cost effective. Auto dealers and banks can tell you the worth of cars. Or you can look it up online at Kelley’s Blue Book (www.kbb.com). Review your coverage at renewal time to make sure your insurance needs haven’t changed.

5. Buy your homeowners and auto coverage from the same insurer

Many insurers will give you a break if you buy two or more types of insurance. You may also get a reduction if you have more than one vehicle insured with the same company. Some insurers reduce the rates for long-time customers. But it still makes sense to shop around! You may save money buying from different insurance companies, compared with a multipolicy discount.

6. Maintain a good credit record

Establishing a solid credit history can cut your insurance costs. Most insurers use credit information to price auto insurance policies. Research shows that people who effectively manage their credit have fewer claims. To protect your credit standing, pay your bills on time, don’t obtain more credit than you need and keep your credit balances as low as possible. Check your credit record on a regular basis and have any errors corrected promptly so that your record remains accurate.

7. Take advantage of low mileage discounts

Some companies offer discounts to motorists who drive a lower than average number of miles per year. Low mileage discounts can also apply to drivers who car pool to work.

8. Ask about group insurance

Some companies offer reductions to drivers who get insurance through a group plan from their employers, through professional, business and alumni groups or from other associations. Ask your employer and inquire with groups or clubs you are a member of to see if this is possible.

9. Seek out other discounts

Companies offer discounts to policyholders who have not had any accidents or moving violations for a number of years. You may also get a discount if you take a defensive driving course. If there is a young driver on the policy who is a good student, has taken a drivers education course or is away at college without a car, you may also qualify for a lower rate.

When you comparison shop, inquire about discounts for the following:*

Antitheft Devices
Auto and Homeowners Coverage with the Same Company
College Students away from Home
Defensive Driving Courses
Drivers Ed Courses
Good Credit Record
Higher deductibles
Low Annual Mileage
Long-Time Customer
More than 1 car
No Accidents in 3 Years
No Moving Violations in 3 Years
Student Drivers with Good Grades

*The discounts listed may not be available in all states or from all insurance companies.

The key to savings is not the discounts, but the final price. A company that offers few discounts may still have a lower overall price.

 

Rent Without Wasting Money

Courtesy of iii.org

There are more options for renting a car than ever before—bricks-and-mortar, peer-to-peer and membership-based car sharing services. While this means more choice for renters, it also creates more questions about insurance coverage. Use these tips to properly insure yourself when renting a car, and avoid wasting money on duplicative coverage.


If you’re looking to rent a car, depending on your needs and location, there are a number of alternatives—the traditional brick-and-mortar companies, peer-to-peer car services and car sharing programs—each with its own insurance parameters. It pays to understand your existing coverage first, and then look at your rental insurance options.

No matter what company or what kind of company you’re renting from, the most important step is to read and understand the car rental or car sharing agreement. Most companies clearly state what is covered as well as the supplemental coverage that can be purchased. If you don’t understand, have the rental or car sharing company representative walk you through.

If you’re renting a car, check your own coverages first

Before you enter an agreement with any type of rental service, maximize use of the insurance you’re already paying for and avoid paying for duplicate insurance.

If you own or lease a car and/or have homeowners insurance, call your insurer to first check the following:

  • How much coverage you currently have on your own car – In most cases, whatever auto insurance and deductibles you have on your own car would apply when you rent a car (providing you are using the rental car for recreation and not for business).
  • If you still have collision or comprehensive – If you dropped these coverages on your own car as a way to save money on your car insurance, you may not be covered if your rental car is stolen or damaged. Insurance rules vary by state, so it is best to check with your insurance professional for the specifics of your policy.
  • If you are covered for administrative fees, loss of use or towing charges – Check to see whether your insurance company pays for—or provides a rider for—additional fees.
  • Whether your homeowners or renters insurance covers the loss of possessions – These policies (not your car insurance) generally cover your belongings if they are damaged or stolen out of your vehicle.

The credit card you use to rent a car may also provide some insurance. Though coverage is likely to be limited—for example, it may only cover the deductible if you make a claim—it’s worth knowing what protections it will provide.

  • Know that benefits differ – Insurance coverage can depend on the company or bank that issues the card or even the level of card. For example, a platinum card may offer more robust coverage than a green card. If you have more than one card, you may want to compare what insurance they offer for car renters.
  • Contact the credit card issuer to find out what they cover – If you are depending on a credit card for insurance protection, ask the company or bank that issued the card to send you their coverage information in writing.
  • Credit card insurance benefits are usually secondary – That is, they will kick in after your personal insurance policy or the insurance coverage offered by the rental car company are utilized.

Insurance if you’re renting from a brick-and-mortar car rental

Brick-and-mortar car rental companies are generally found at airports, train stations or other locations where travelers converge. These traditional rental companies allow you to simply reserve or select a vehicle from one of the many generally available on any given day. The insurance you’ll be offered is fairly standard (though, like all car insurance, it varies by state).

Depending on what type of auto and/or homeowners insurance you carry, you may want to consider some of the insurance coverage provided by the rental car company. While auto insurance regulations, costs and coverage will vary by state and insurer, consumers renting from traditional companies can generally choose from the following coverages:

  • Loss Damage Waiver (LDW) – Also referred to as a collision damage waiver, an LDW is not technically an insurance product—it is designed to relieve or “waive” renters of financial responsibility if their rental car is damaged or stolen. Waivers may also provide coverage for “loss of use,” in the event the rental car company charges for the time a damaged car cannot be used because it is being fixed, as well as towing and administrative fees. The LDW may become void if the accident was caused by speeding, driving on unpaved roads or driving while intoxicated. However, if you carry comprehensive and collision auto insurance, you may already be covered for damage to a rental car.
  • Liability Insurance – By law, rental companies must provide the state required minimum amount of liability insurance coverage—often this does not provide enough protection. If you carry your own auto insurance and have opted for higher liability limits (which is recommended), you’ll be adequately covered. Non car-owners who are frequent renters have the option of purchasing a non-owner liability policy, which can provide the additional liability needed.
  • Personal accident insurance – This covers the driver and passengers for medical and ambulance bills for injuries caused in a car crash. Whether or not you should consider this depends on your health insurance and the personal injury protection (PIP) provided by your auto insurance, which will likely cover medical expenses.
  • Personal effects coverage–This provides insurance protection for the theft of items from a rental car. Consider this if you do not carry homeowners or renters insurance to cover this type of loss.

Insurance if you’re using a car sharing service

With car sharing programs, for a monthly or annual membership fee, consumers can pick up a vehicle at a wide range of locations for periods ranging from minutes to days. These programs are popular in urban settings where owning a car can be expensive or difficult, but where it’s convenient have a car available when it’s needed. Coverage options vary widely, but there is usually some insurance included.

The insurance offered by these types of companies is not standardized so read the insurance coverage information carefully (it can usually be found on the service’s website). If you have any questions, call the company’s customer service line. And contact your auto insurer if you feel you need more information to make an educated insurance coverage decision.

  • Car sharing programs (like ZipCar) generally include insurance costs in the fee. However, if the car is involved in a collision or is stolen, the renter may be billed for a specific dollar amount that is stated in the membership agreement. For an additional cost, customers can purchase a “waiver” to avoid paying the accident fee.
  • Many car sharing programs limit coverage for young drivers to the minimum state required amount of liability. Renters under the age 21 should read the insurance coverage carefully. If it’s not adequate to their needs, they can look into whether their parents’ auto insurance would cover them for the difference, or purchasing their own non-owner liability policy.

Insurance if you’re renting from a peer-to-peer service

Peer-to-peer car rental networks enable consumers to rent personally owned cars from others. Insurance coverage varies widely, depending on location and service.

  • Peer-to-peer rental services (like Turo) may offer a range of insurance options and, under some circumstances, the driver may decline coverage.

 

Next steps: When considering these options for your rental car, it helps to have a general understanding of your auto insurance coverage.

9 Ways to lower insurance costs

Courtesy of iii.org

1. Seek out other discounts

Companies offer discounts to policyholders who have not had any accidents or moving violations for a number of years. You may also get a discount if you take a defensive driving course. If there is a young driver on the policy who is a good student, has taken a drivers education course or is away at college without a car, you may also qualify for a lower rate.

2. Before you buy a car, compare insurance costs

Before you buy a new or used car, check into insurance costs. Car insurance premiums are based in part on the car’s price, the cost to repair it, its overall safety record and the likelihood of theft. Many insurers offer discounts for features that reduce the risk of injuries or theft. To help you decide what car to buy, you can get information from the Insurance Institute for Highway Safety (www.iihs.org).

3. Ask for higher deductibles

Deductibles are what you pay before your insurance policy kicks in. By requesting higher deductibles, you can lower your costs substantially. For example, increasing your deductible from $200 to $500 could reduce your collision and comprehensive coverage cost by 15 to 30 percent. Going to a $1,000 deductible can save you 40 percent or more. Before choosing a higher deductible, be sure you have enough money set aside to pay it if you have a claim.

4. Reduce coverage on older cars

Consider dropping collision and/or comprehensive coverages on older cars. If your car is worth less than 10 times the premium, purchasing the coverage may not be cost effective. Auto dealers and banks can tell you the worth of cars. Or you can look it up online at Kelley’s Blue Book (www.kbb.com). Review your coverage at renewal time to make sure your insurance needs haven’t changed.

5. Buy your homeowners and auto coverage from the same insurer

Many insurers will give you a break if you buy two or more types of insurance. You may also get a reduction if you have more than one vehicle insured with the same company. Some insurers reduce the rates for long-time customers. But it still makes sense to shop around! You may save money buying from different insurance companies, compared with a multipolicy discount.

6. Maintain a good credit record

Establishing a solid credit history can cut your insurance costs. Most insurers use credit information to price auto insurance policies. Research shows that people who effectively manage their credit have fewer claims. To protect your credit standing, pay your bills on time, don’t obtain more credit than you need and keep your credit balances as low as possible. Check your credit record on a regular basis and have any errors corrected promptly so that your record remains accurate.

7. Take advantage of low mileage discounts

Some companies offer discounts to motorists who drive a lower than average number of miles per year. Low mileage discounts can also apply to drivers who car pool to work.

8. Ask about group insurance

Some companies offer reductions to drivers who get insurance through a group plan from their employers, through professional, business and alumni groups or from other associations. Ask your employer and inquire with groups or clubs you are a member of to see if this is possible.

When you comparison shop, inquire about discounts for the following:*

Antitheft Devices
Auto and Homeowners Coverage with the Same Company
College Students away from Home
Defensive Driving Courses
Drivers Ed Courses
Good Credit Record
Higher deductibles
Low Annual Mileage
Long-Time Customer
More than 1 car
No Accidents in 3 Years
No Moving Violations in 3 Years
Student Drivers with Good Grades

*The discounts listed may not be available in all states or from all insurance companies.

The key to savings is not the discounts, but the final price. A company that offers few discounts may still have a lower overall price.

 

Insuring a Classic Car

Courtesy of iii.org

A classic, custom, collectible or antique car requires insurance that reflects your vehicle’s uniqueness and value. If you own—or are thinking of owning—a special set of wheels, find out about the kind of policy you need.


What types of vehicles need special insurance?

A classic, collectible or antique car is no ordinary car—and regular auto insurance is not sufficient to protect such a vehicle against damage or loss.

That said, there is no uniform definition of a classic car. If a car’s value exceeds its original selling price, then it might be considered collectible and a candidate for specialized classic car insurance. In general, vehicles that might warrant classic car auto insurance include:

  • Antique and classic cars, usually at least 25 to 30 years old
  • Hotrods and modified vehicles
  • Exotic and luxury autos—think James Bond
  • Muscle cars
  • Classic trucks

You might also seek specialized insurance for vintage military vehicles, classic motorcycles and antique tractors.

Qualifying for classic car coverage

A car’s age is not enough to qualify for specialized classic car insurance. While requirements differ from company to company, most cars need to meet the following criteria in order to qualify:

  • Limited use – Your classic car cannot be used for everyday commuting or errands, and your policy may include mileage limitations and proof the car is being properly garaged if you do travel with it. In some cases, insurers may require that you also own a primary car for everyday use.
  • Car shows and meetings – The limited use provision of a classic car policy allows for travel to car shows and auto club meet-ups; however, this coverage may be restricted by some insurers. If this is the case, there are insurers that can provide specialized coverage for car shows and meetings. Before choosing a classic car insurer, it’s worth checking whether they have travel restrictions if you plan to take your car on regular, multi-day, high mileage drives.
  • Secure storage – When not in use, your special vehicle must be stored in a locked, enclosed, private structure, such as a residential garage or storage unit.
  • A clean driving record – You may be disqualified from classic auto insurance if you have serious offenses on your driving record, such as reckless driving, repeat speeding violations or driving while intoxicated.

Not every vehicle, however special, will meet the qualifications of every insurer. For instance, some insurers may not cover vintage off-road vehicles. Insurers may also decline to insure vehicles that are in poor condition or have been previously damaged.

What you should know about classic car policies

Your classic car policy will include provisions found in standard auto insurance policies, notably property damage and bodily injury liability coverage. But there are some differences, as well:

  • Your car’s value – Because each car’s condition is unique, there is no set “book value” for specific makes and models. The first step in insuring your classic car is for you and your insurer to reach an agreement on the value of the vehicle. This value will be specified in your policy and your car will be covered up to that value without depreciation.

Note that, unlike everyday vehicles that depreciate over time as you add miles to them, classic cars may gain value. Make sure you adjust your coverage as the value of your auto appreciates.

  • Specialized repair or restoration – Your policy should you the flexibility to bring your vintage Mercedes, Ferrari or Corvette to a specialist—even if the rates may be twice, or three times, the cost of a typical car repair at a traditional auto body shop.
  • Special towing and spare parts – Coverage for towing is commensurate with the special demands of transporting a classic car. Spare parts coverage, too, needs to be aligned with the cost of replacing valuable and perhaps hard-to-find vehicle components, such as wheels, transmissions, and engine parts.

How to Make a Car Insurance Claim

Courtesy of iii.org

1. Call your insurance professional as soon as possible — even from the scene of the accident—regardless of who is at fault. Even if the accident appears minor, it’s important to let your insurance company know about the incident and to find out whether your auto insurance policy covers you for the particular loss.

2. Use a mobile app to jumpstart your claim. Many insurers now offer apps that allow you to report a claim, check the status, upload photos, check your deductible, schedule an appraisal, reserve a rental car and request reimbursements for towing and glass claims. Some apps even allow you to notify the insurance adjuster what happened by visually re-creating the events and circumstances of your car accident.

3. Find out what documents are needed to support your claim. Your insurance company will require a “proof of claim” form and, if you filled one out at the scene of the accident, a copy of the police report. Your insurer may have a feature on its website that allows you to monitor the progress of your claim.

4. Understand the timing of your claim. To avoid missing a critical claim deadline, ask:

  • Does my policy contain a time limit for filing claims and submitting bills?
  • Is there a time limit for resolving claims disputes?
  • If I need to submit additional information, is there a deadline?
  • When can I expect the insurance company to contact me?

 

5. Find out whether or not your policy pays for a rental car if your car needs to be in the shop for repair, and learn about the estimate and repair process as it relates to claims.

6. Supply the information your insurer requests. Fill out the claim forms carefully. Keep thorough and organized records of anything related to the claim, including the names and phone numbers of everyone you speak with at your insurer and copies of any bills related to the accident. Contact your adjuster, your insurance professional or your state insurance department if you have any questions.

Car Insurance & Road Rage

Courtesy of iii.org

Road rage incidents are not only dangerous, they are exempted from coverage by many auto insurance policies. Understand your risks and take precautionary measures to avoid being a victim—or a cause—of aggressive driving accidents.


Crowded highways and traffic backups at times cause drivers to lose control and become extremely aggressive. Road rage is a real problem that can lead to serious accidents or even incidents of violence on the road.

It’s important to realize that road rage is listed as an exemption in many auto insurance policies. This is because any damage or liability stemming from aggressive driving isn’t considered an accident but rather as having been caused by risky behavior.

Rather than risk paying the consequences of road rage—one of which may be not having your auto insurance claim paid—it’s best to avoid a dangerous and costly aggressive driving incident in the first place.

If you encounter an aggressive driver on the road…

 

  • Stay as far away as possible. Slow down or change lanes if need be, let the driver pass you and give yourself room at intersections to drive away.

 

  • Record a description of the car and note the license plate number if possible so that you can report him or her to the police for the sake of everyone’s safety.

 

  • Do not engage with or challenge the offender in any way. Ignore the driver’s rudeness and don’t give into the temptation to react in kind or you might escalate the risky behavior.

 

  • Put your safety first. If an aggressive driver starts to follow you, keep your doors locked, and head to the nearest police station. Never stop and confront an aggressive driver.

 

If you have a short fuse yourself stay cool and…

 

  • Leave plenty of time to get where you need to go. When you’re in a hurry, your patience is short and you are much more likely to become aggravated.

 

  • Remember other drivers are not annoying you on purpose. People make mistakes or they might be driving more slowly for a reason—they might be lost, or their sight might be impaired by sun glare.

 

  • Don’t use hand—or single finger—gestures other than a wave to someone who lets you into your lane.

 

  • Don’t tailgate slow drivers. Hanging on another car’s back bumper is dangerous. If the car in front of you has to stop short and you rear-end it, the accident would be considered your fault.

 

  • Don’t honk your horn insistently. Leaning on your horn is a bad practice. While it might make you feel better to express your frustration in a traffic jam, it won’t make anyone go any faster, it’s annoying to other drivers and passengers and it increases everyone’s stress level, which may lead to more aggressive behavior.

 

  • Never stop to confront another driver. It could lead to a dangerous situation for all concerned.