CityAutoInsurance

For those of you that aren’t familiar with what a broker does, well, they shop FOR you. In a sense. Basically, they take your personal information and show it around to various insurance carriers looking for the best price. This seems like a pretty good idea, and for some, it works well. In my opinion, brokers are the best solution for larger commercial policies. If you own a large business, then this arrangement can work well. You pay thousands if not tens of thousands in premium. You may not need to make many if any changes to your business policy throughout the year, so there is not much contact with the company (except for an occasional insurance certificate request) and shopping your huge premium every year may make sense. As long as the brokerage places your policy with a large and financially secure company, what’s the harm? However, if you are looking at just your personal lines insurance (i.e. auto, homeowners, renters, life) you may want to go the more personal route. With a brokerage, again, you don’t really get the chance to develop that personal relationship. Your brokerage may act as your agent, but their focus is usually on large premium commercial clients, and your one or two automobiles may seem like small potatoes. If you find a brokerage that can deliver personalized service, and will work diligently to find you great pricing as well, this arrangement CAN work to your benefit.

The Good: They will shop lower prices for you, take some of the hassle out of the insurance process for you.

The Bad: Less likely to build a relationship, you won’t have longevity with any company as they will often switch your policies as soon as they find a lower price.

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Some folks nowadays buy everything off the internet, while others still don’t trust putting their personal info online. Personally, I love buying things off the internet. No gas spent, no traffic to deal with, no long lines, I can take my time, all kinds of positives.

However, I don’t buy EVERYTHING from the internet. I love to develop relationships for a lot of what I purchase. Supporting my local community, getting to know who I am doing business with, having someone in my corner whom I know and trust in case there is a problem with the purchase, you get the idea.

Sometimes it makes sense to know who you are doing business with.

When you purchase online, you are giving up the ability to develop that relationship. Sure, pointing and clicking is easier, but when do you really need insurance? When you buy a car, sure, they make you get it, but you REALLY need insurance if you have a claim. It really helps to know that you can call someone whom you know if that happens. How much of a relationship did you develop with that online form when you submitted your vehicle and personal info, as well as your credit card info? Kinda seems impersonal know, huh? Some internet insurance sites may be awesome, and who knows, you may NEVER have a claim, but keep this in mind: MANY have tried the online insurance game, and MANY of those have already gone out of business. The number one concern you should have with any insurance company is that they have money to pay claims when the time comes. Choosing a well established and financially successful company makes good financial sense in this regard. Purchasing online may save you time, hassle, and perhaps even a few dollars, but you may be giving up peace of mind, financial stability of the company, and the added benefit of building a relationship with your agent.

The Good: Possible lower price, don’t have to drive to agent’s office, easy point and click purchases

The Bad: No ability to build a relationship, the company will not have much if any.

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Now that you have learned how your policy works, what your coverages mean, and how to save some money by maximizing discounts, its time to go shopping for a policy, right? WAIT…ask yourself the following questions:

1. How long have I been with my current company?

2. Has my agent been helpful to me?

3. Do I have any reason to switch companies other than shopping for a better price?

If you have been with your company for a long time, they have serviced you well, and you cannot think of any specific reason to switch other than price shopping, I would say DON’T SWITCH. Having a relationship with your current company can be equally if not more important than paying a little less premium. If you have decided to switch however or are going shopping for insurance for the first time, let’s check out some of your options below.

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Believe it or not, some claims are easy to handle, and not very stressful to you at all. Many things can happen to your automobile that your policy may cover. The following scenarios would generally be covered under your COMPREHENSIVE coverage:

• A rock flies up and cracks or breaks your windshield (many times, insurance companies waive deductibles if your windshield can be repaired, but your deductible will come into play if it has to be replaced. Remember the $0  comprehensive deductible recommendation?)

• Something flies of a car or truck in front of you and strikes your car (this would be comprehensive if it hits your car BEFORE hitting the ground. If you run over it, generally it would be considered collision.

• You hit a deer, dog, or other animal (although you actually HIT something while you were driving, insurance companies generally do not fault you for these accidents because of the unpredictable nature of the animal. This would usually fall under comprehensive coverage.
• Someone keys, scratches, or otherwise physically damages your car, NOT with their car.
• Someone steals your vehicle-AGAIN, let me reiterate the $0 comprehensive deductible recommendation. Imagine if someone stole your car. Now imagine that you had a $500 deductible on comprehensive. How would you feel about having to be out $500 because stole your car? Let me tell you, you would NOT be happy.

• ANYTHING falls onto your car and damages it, hail, sleet, tree limbs, a bad golf shot…you get the picture. There could be other scenarios in which comprehensive would cover you, but the above represent the bulk of what can occur to your vehicle and be covered by comprehensive. Another useful coverage is the emergency road service, sometimes referred to as TOWING. As you will see, it can over you for many more scenarios than just towing, and because it just costs a few dollars extra, it is usually worth the extra protection it provides. Here are some scenarios in which your Emergency  RoadService coverage would kick in:

• Your car breaks down and needs to be towed-KEEP IN MIND most companies stipulate that they will reimburse you to have your car towed to the nearest  repair facility to be repaired. NOT your favorite body shop that happens to be 300 miles away from the place your car broke down.
• 

• You run out of gas and need someone to bring you gas, or be towed to a gas station.

• You lock your keys in your car and you need a locksmith.

• You are in an accident and your car needs to be towed.

• Your car won’t start and needs to be jumped, and you call a tow truck to give you a boost. Be sure to check with your company to see if they will actually PAY for these services, or simply reimburse you after you have paid. Make sure to keep your receipts for these transactions as many times, insurance companies will check with the service providers to verify the nature and amount of the charges.

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I guess the only good thing about being involved in an accident that is not your fault is, well, it’s not your fault. It STILL sucks. People get hurt, your car still needs to be fixed, and all in all, it is not fun. You can help to make the process a little easier by doing what is recommended in the above list and act to help the process along, not hurt it. Just because the accident is not your fault, don’t expect to just sit back and have EVERYTHING be tended to perfectly and run smoothly without your involvement. You may have to make some phone calls. You may have to fax some documents. The bottom line is if you are found to be not at fault, the other company should pay, sure, but that doesn’t mean that you cannot be a human being and help do your part in the process. Car accidents are ACCIDENTS…no one wants to go around ramming their car into others, so keep that in mind. The other party is probably sorry the accident occurred. All too often I see and hear of folks who act as if the other party are heartless criminals for hitting them. It is as if they are perfect individuals and the other party are complete worthless wastes of time. Let’s keep in mind that accidents do occur, and it could just as easily be YOU at fault as the other person. If the parties treat each other and the insurance company with respect, the process will go much more smoothly and probably even be settled more quickly. Here are some things to keep in mind that may help the process along:

1. Give your insurance info to the other party. No, maybe you were not at fault, but do you really want the other company to have to track down your info or wait for the police report to be filed, then sent to the insurance company? Be reasonable. The more info  you give and the more you cooperate and participate in the process the easier and smoother the process will go. I have seen so many instances where people won’t cooperate, then complain that nothing is going smoothly and it is taking too long. They then say things like “why should I have to give that info? It’s not MY fault…” We are not in the  first grade anymore, we are adults. Pretend you are in the real world and act accordingly. Things will work out much better for you if you do.

2. You CAN contact your insurance company, but if the accident is clearly the other person’s fault, they may not even turn in the claim. If the other insurance company has accepted liability and is going to take care of you, there is no reason for them to. If the other insurance company is NOT going to pay or it is undecided, then your company may begin to initiate coverage. Either way, that phone call to your company is never a bad idea.

3. Let the insurance companies handle it. They are experts, they do this ALL the time. Learn the procedure as they tell it to you and hold them to that, sure, but otherwise, step back and let them do their work. Trust me, this is the quickest way to get the claim resolved.

4. KEEP GOOD RECORDS. Make notes of conversations you have had, copies of receipts or any paperwork you have received, or anything that you have gotten from the hospital, policy, insurance company, or car repair facility. Now, there are also scenarios where you are not at fault, but you are a victim of hit and run, or the other person has no insurance, or is UNDER insured. In these cases, your uninsured motorist liability may come into play. This coverage will protect YOU in these instances. In most cases, there is a state specific deductible that first must be satisfied. Check with your agent to see how this may affect you. Otherwise, the claim will proceed as normal. If you are not found at fault, your rates should not be affected for claims that are paid by uninsured motorist coverage.

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It is a sad but true fact that the only time you really need your insurance policy is if Something bad happens. Claims are the name of the game, and if you know how to play, you can win. This is not you vs. the insurance company mind you, it is you vs. you. You can be your own best or worst enemy in the event of the claim. Despite what some think, most insurance companies, claims representatives, and agents are out to help you. The more you know and the better your handle yourself, the easier you allow them to do just that. Pay attention to the info that follows and you may do just that. There are quite a few different types of claims pertaining to automobiles, and here I will break them down into 3 general categories: You’re at fault, you’re not at fault and finally, all other scenarios. I will break down specifics of each category, but remember, this is just general advice. When dealing with a claim, you will be dealing with a claims rep, your agent, and potentially, even a lawyer. The information below is just to help educate you about generalities and in no way intended to take the place of the aforementioned individuals. Accidents do happen, and unfortunately, SOMEONE has to be at fault. If you are the unlucky one, here are some things to keep in mind. At the scene:

1. Don’t admit fault even it is clear. Sometimes shared liability exists. Let the expert make those decisions yourself.

2. Be sure to get the info from the other person, if they will give it. Sometimes people think they don’t have to do anything because they were not at fault. If  they won’t comply, see if a police officer will help you, OR, if a policy report is made, get the number and have your insurance company follow up to get it after the fact. The other reality is, if they won’t give you info…how is your company going to take care of them???

3. Call your insurance company as soon as you can within reason. For example, if you are in the middle of the road, and it is a hectic scene, wait to call. Most insurance companies allow you a more than reasonable time frame within which to report an accident. Waiting until you get home is more than fine.

The next day:

1. Once you have reported the accident, a claims representative will make contact with you to inform you of the procedures. Write down their name, phone number, and claim number and keep it somewhere with you at all times. You never know when someone is going to call about the claim or you will need to contact them. Calling your agent every day because you lost the claim number doesn’t exactly speed things up. They will help you, sure, but most of the time, your agent and your claim rep are in two completely different locations and operate almost 100% autonomously.

2. Save receipts. If you HAVE had to get anything done pertaining to the claim on your own (towing, trip to hospital, etc) keep the receipts! It is easy to submit these all at once, but if you are playing detective at the end of the claim to try to gather proof of all expenses, again, this will NOT speed up the claim.

3. Make sure your policy is paid up to date. Yes, it is a little late AFTER the accident to find your policy has lapsed, but some folks forget to pay DURING a claim as well. They think if their car was totaled, they don’t need to pay the insurance premiums…not true. You should continue paying, and if a refund is due, your company will issue it after the fact.

4. Make return calls and emails promptly. Nuff said

5. If you are being sued, check with your insurance company as to how they will help you out in this scenario. They are experts at dealing with claims and oftentimes will represent you as part of the claim.

The above references pertain to liability and collision claims almost primarily. In other words, your policy is paying medical and damages to the other person and their car, and your damage to your car as well. If you have car rental on your policy, this would kick in as well for the time that your car is in the shop being fixed. This is NOT a good time to realize your property damage limits are $25,000 and you just totaled a $60,000 Lexus. I can’t say it enough…MAKE YOUR LIABILITY LIMITS HIGH.

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We know younger drivers are more expensive to insure. We know they are much more of a risk concerning liability. So, what can we do to protect ourselves, and pay reasonable premiums at the same time? First of all, pay attention to the section on discounts for younger drivers.

First try to maximize those scenarios. As far as the actual coverage’s, if you are REALLY looking to pay the least amount of insurance when putting a younger driver on your policy, you really only have one solution: No collision.

That means buy a car that is very inexpensive (a GREAT solution for a first time driver…dents, dings, scratches, who cares!?) If you already have a car in the household without collision, there’s your solution!

However, if you are like a LOT of parents, or if you are under 25 yourself and getting a car, you may choose to take the more expensive route. You buy a vehicle brand new, need full coverage on it, it is very expensive, and you are not happy. Guess what? That’s life. If you are under 25, male OR female, you are a higher risk, no ifs ands or buts. Do what you can to minimize premium, but if your policy requires full coverage, you WILL pay higher than average premiums.

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We basically covered this scenario when we discussed discounts and coverage’s in the previous sections, so I won’t bore you. The only real variable, in my opinion, when dealing with older vehicles is collision. If the car is not worth much, don’t pay the insurance company to insure the replacement value. End of story. It will ALWAYS make sense to keep your liability limits high. It will almost ALWAYS make sense to keep comprehensive and keep it with a low or 0 deductible. Roadside assistance is a good coverage and is cheap. Car rental is either of vital use to you, or you have another vehicle to use and don’t need it. That’s it, that’s my take!

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Ok, by now, you are starting to become an expert on coverage’s. Heck, by now, you might have already called your insurance companies and made some changes to your policy that either saved you money, or made your policy better. Either way, I am going to go over some scenarios of how you may want to tailor your policy based on your particular situation. Remember, these are GENERAL suggestions, and I urge you to sit down with your agent to decide what is right for YOU.

First of all, let’s start this section by trying to clear up a common misconception. Just because a car is NEW doesn’t mean the insurance is more expensive. Just because a car is older doesn’t mean it is cheaper. As a general rule, these statements are more true than false, but the fact it, there are variables that go into the rating. For instance, your car may be brand new, but only cost $12,000 and is incredibly safe. Conversely, you may have a 10 year old car that is still work $30,000, has a turbo engine, and is a death trap. See what I mean? Be sure to give all the details of the vehicle to the insurance company and let them rate the vehicle. Don’t assume what the premium is going to be just because your car is new, old, expensive, whatever. MANY variables make up the premium. For these scenarios, we are going with the assumption that as a newer car, it is also more expensive as well. Ok, on to the policy. In general a newer car will be more expensive, and if you didn’t pay cash, you will have a lien on the vehicle. The bank will require full coverage. To recap, we are talking liability, comprehensive, and collision. Oftentimes, the bank will require a specific deductible. Pay attention to their requests. You may be able to choose your own deductible as well, but be sure our policy contains AT LEAST what the bank requires. They will receive a copy of the policy, and if it is incorrect, they can issue you a policy of their own if yours is insufficient. Those policies are usually much more expensive than simply getting the coverage through your own agent. As state before, pay attention to liability. That is  the one that protects YOU. Don’t skimp on that coverage…I will say it again, make your limits high, and protect yourself, your family, and your assets! A common scenario is, you buy a car, then call your agent to SWAP out cars on your policy. Keep in mind, the old coverage’s you had will stay the same for this new vehicle unless you change them. Make sure your agent reviews them with you at this time. A sleepy agent may not pay attention; the policy and car are YOURS…make sure YOU pay attention. If you do plan on getting rid of your old vehicle, keep in mind, if you do a car change, you will only have a certain amount of time to get your old license plates turned into the MVA. If not, you will receive a fine. You may have to put a policy back on your old car if you do not get rid of it as planned. If you are simply adding an additional car to your household, you are starting from scratch with a brand new application, so this scenario will not apply.

Bottom line:

• Your policy on a new car will GENERALLY be more expensive, but not always.
• If you have a lien, pay attention to the minimum requirements the bank is requesting.
• If you are getting rid of a car and buying a new one, make sure to turn your old plates in to the MVA.
• Make sure to review the new policy once you receive it and confirm all the coverage’s.

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One way people want to try to save money on their insurance is by getting rid of some of the coverage’s and/or lowering the amount of coverage’s. This CAN work for you, or it can work against you. As we discussed before, if your car is older, is not worth much, then you may not care to have collision on your policy. If it is new, and has a lien, then certainly you need collision. For certain, if you are paying for collision on a car that has little resale value, you may want to yank it off your policy. Speaking with your agent can really help you to determine how you want your policy to cover you.

As far as OTHER coverage’s go, here is a quick  breakdown:

• Liability-NEVER lower these limits are choose state minimums. Your car can still do massive damage and kill people. Make these limits as high as you can afford.
• Comprehensive-makes sense to have on pretty much every policy. Does your car have a windshield? Get comp. No matter what, keep the deductible low.
• Road Service-it is cheap, you won’t save much by getting rid of it, and having it on there will usually save you money and aggravation at some point in your driving career

• Car Rental-if you have an extra car to use in the event your car is in the shop due to a covered claim, you may not need this coverage. Otherwise, keep it.
• Uninsured motorist liability-same as regular liability. This coverage protects YOU, so make it mirror your regular liability limits.

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