Car Insurance

If you are shopping for a new or used car, you may be encouraged to buy an auto service contract. Auto service contracts have become increasingly popular as a way to provide consumers a means to deal with unforeseen vehicle repair problems. Before signing on the dotted line, the Better Business Bureau urges consumers to be sure they understand the terms of the contract and know who is responsible for providing the coverage.

According to the Federal Trade Commission, an auto service contract is a promise to perform (or pay for) certain repairs or service. Sometimes called an “extended warranty,” a service contract is not a warranty as defined by federal law. A service contract may be arranged at any time and always costs extra; a warranty comes with a new car and is included in the original price. This separate and additional cost distinguishes a service contract from a warranty.

Before deciding whether to buy an auto services contract, the BBB suggests you ask the following questions.

* Who backs the service contract? It may be the manufacturer, dealer, or an independent company. Many service contracts sold by dealers are handled by independent companies called administrators. Administrators act as claims adjusters, authorizing the payment of claims to any dealers under the contract.

* What’s the cost of the auto service contract? Usually, the price of the service contract is based on the car make, model, condition (new or used), depth of coverage and length of contract. The cost of the service contract can range from several hundred dollars to more than $2,000. In addition, you may need to pay a deductible each time your car is serviced or repaired.

* What is covered and not covered? Few auto service contracts cover all repairs. Watch out for absolute exclusions that deny coverage for any reasons. For instance, if the contract specifies that only “mechanical breakdowns” will be covered, problems caused by “normal wear and tear” may be excluded.

* How are claims handled? When your car needs to be repaired or serviced, some service contracts permit you to choose among several service dealers or authorized repair centers. Others require the car owner to return the vehicle to the selling dealer for service. Find out if you will need prior authorization from the contract provider for any repair work or towing services. Ask how long it will take to obtain authorization and whether you can get authorization outside of normal business hours.

* What are your responsibilities? Under the contract, you may have to follow all the manufacturer’s recommendations for routine maintenance, such as oil and spark plug changes. Failure to do so could void the contract. To prove you have maintained the car properly, keep detailed records, including receipts. Find out if the contract prohibits you from taking the car to an independent station for routine maintenance or performing the work yourself. The contract may specify that the selling dealer is the only authorized facility for servicing the car.

* What is the length of the service contract? If the service contract lasts longer than you expect to own the car, find out if it can be transferred when you sell the car, whether there’s a fee, or if a shorter contract is available.

Consumers should check with the BBB for a reliability report on the business offering the contract, and with any regulatory agencies that oversee this type of company. Make sure you read and thoroughly understand the agreement and check that all verbal promises have been included. Do not sign a contract with blank spaces that could be altered or changed. Finally, once the contract is signed, keep a copy of it for your records.

Taking the time now to review the steps you should follow after an auto accident will help to reduce the anxiety surrounding the incident and avoid costly and time-consuming mistakes. The Better Business Bureau suggests the following tips to make sure things go smoothly. * Always have on hand your company’s claim service card with your agent’s name and phone number, and your policy identification number. * Notify the police immediately. Get the police officer’s name and badge number and the address and phone number of the police station. Ask the officer when the accident report will be filed and how you can obtain a copy. * Review your insurance company’s filing procedures, and store a copy in your glove compartment as a reminder of the information the company requires. * Notify your insurance company or agent. Do it as soon as possible even if you’re far from home and even if someone else caused the accident. Ask your agent how to proceed and what forms or documents will be needed to support your claim. Be familiar with your insurance company’s policy regarding qualified repair shops and pre-inspections. * Make sure you get the name of the other driver, his or her address, work and home telephone numbers; vehicle license plate number and state; insurance company name and policy number and the telephone number of his or her insurance agent. Also, obtain the names and addresses of all passengers and witnesses. * Make notes describing the accident, the vehicles involved, their approximate speeds, the setting, the weather, the traffic signs and signals, and the road conditions. Take photographs if possible; or draw simple diagrams of the roads and the accident. * Don’t make any oral or written statements as to responsibility or blame. * Don’t tell others involved in the accident how much liability insurance you carry. * Don’t discuss the specifics of the accident with other drivers, witnesses or passengers. * Don’t accept offers to settle for payment on the spot without thinking about it carefully. You may be held liable later for the same damages.

There are two common types of car insurance claims that can be reported for damage to the vehicle that you own.

1. Collision Claim – A collision claim is a claim for damage to the vehicle that you insure caused by a collision. The collision may have been with any object and is not limited to multiple car accidents. Collision claims include solo car accidents in which the driver may have hit a building, light post or any other object.

2. Comprehensive Claim – A comprehensive claim is for any damage to your vehicle not caused by a collision. Frequently, comprehensive claims are made for theft or vandalism damage. Other Comprehensive Claims include fire damage and flood. Damage caused by impact with an animal is usually also considered a Comprehensive claim.

If you suffer damage to your vehicle, you will need to contact your insurance carrier in order to start the claims process. Most carriers offer the following methods to report a claim.

1. Contact Your Agent – The majority of insurance carriers sell policies through Agents. The Agent is a brick and mortar business that solicits business on behalf of an insurance company. They operate as your point of contact and you can contact your Agent in order to file the claim. They will ask you for the facts of the loss and details on your damages, at which time they will submit a claim form to the insurance carrier for further review.

2. Contact the Insurance Company by phone – If desired, you can skip contacting your Agent and you can call the insurance company directly. Most carriers place their phone numbers on your bills, proof of insurance cards and websites, so you can easily contact them in case of a loss or damage to your vehicle.

3. Submit a claim through the web – As technology continues to improve; more carriers are beginning to take claims through the web. To submit a claim through the web, go to your carrier’s website (for example StateFarm or FarmersInsurance or NationwideInsurance) and click on the “Report a Claim” link. You will be asked to submit information on the policy, facts of loss and damages.

When you are reporting a collision claim, be sure to have as much of the following information on hand as possible.

1. Date, time and location of the accident.
2. The current location of your vehicle and whether it is drivable.
3. Information on the other driver, including name, address, phone number and driver license number.
4. Details on the other vehicles involved, including make and model, license plate and VIN.
5. Insurance information from the other involved parties, including the carrier and policy numbers.
6. Contact information for any witnesses and law enforcement agencies that arrived at the scene.

If you have suffered a comprehensive loss, the information you need will be a little different.

1. Details on the loss, including date, time and location.
2. The current location of your vehicle and whether it is drivable.
3. In the event of a theft loss, you will need to provide mileage of your vehicle as well as the options and features that your car had. This will assist in the valuation of your vehicle.
4. Contact information on the lien holder (bank or savings institution) that financed the vehicle.
5. Contact information for any witnesses and law enforcement agencies that have information on the loss.

Shortly after submitting a claim, you will be contacted by a Claims Associate who will walk you through the claims process. Do not be afraid to ask the Claims Associate any questions you may have regarding insurance, your rights and their responsibilities, local laws and anything else they may be able to help you with.

You do not have to be the best driver on the road to be eligible for discounts through your insurance company. Asking about available discounts is a great way to lower your premium. Here is a list of possible discounts that may be available to you through your auto insurance company.

Most Common Discounts:

Multi-Vehicle or Multi-Driver DiscountIf your household insures more than one vehicle through the same insurance company it is likely you will qualify for a discount. This holds true for having multiple drivers in the household all insured by the same company as well.

Multi-Line DiscountThis is for usually available to you if you purchase your homeowner’s or renter’s insurance policy through the same company that you have your car insurance with.

Safe DriverThis is typically for the driver that has not had any accidents, tickets or claims in the last three to five years or even longer. This discount is usually done after a check of your driving record.

Safety FeaturesCar safety features are items such as airbags, automatic seatbelts, and anti-locks brakes. This is a good list to have when shopping for a new car.

Anti-Theft DevicesDevices such as car alarms, VIN etched windows, Lojack, On Star or disabling devices such as fuel or ignition cut-off switches.

Other Limited Available Discounts:

Defensive Driver or Safety CourseIn certain states if you have taken a defensive driver or car safety course you will be able to get an insurance break.

Good StudentIn some states if you are a full-time student and maintain a B grade point average or above you can qualify for a discount.

MilitaryIn certain states active or retired military members may be able to take advantage of a price reduction. There are also other special discounts if they are shipped overseas.

AARPThe older generation can sometimes now get an AARP discount.

Profession BasedA few companies have done risk studies and found that people with college degrees and in certain professions are less likely to have claims. A few of the professions that might be available for this type of discount are educators, engineers and scientists.

These are not necessarily the only discounts available to you through your insurance company or in your specific state. To find out what discounts you may be eligible for ask your agent or insurance representative. If there are no discounts available to you at this time remember to check back later in the year to see if any new discounts have arisen.

Having a disagreement with anyone is not fun. Having a disagreement with your insurance company can cause you to have a massive headache. Settling your claim with your insurance company can be done without lawyers or going to court though and here is how.

When want to find to find about a claim that you have filed with your insurance company the first step is going to your agent. This is the person you have dealt with and whose commission depends on your continued patronage. If you have built up a relationship with your agent it will be helpful. They might not be able to push your claim through but they should be there to help you figure out what steps to take once the claim goes above their level.

The agent can give you the name of the person handling your claim usually. If the agent cannot give you this specific information they can definitely give you the number needed for you to contact the claims department. Call into the claims department to find out what the status is of your claim. If the claims department cannot or will not help you, ask for a supervisor.

The first representative you speak to really may not be able to help you so keep going up the chain. You should keep a notepad handy so that you can write down the name of each person you speak to. Note what number you dialed to get to or department you were transferred. You can also ask the insurance company reps if they have identification (ID) numbers as well. Many customer service people do. This helps identify them in the future if you need to verify who exactly gave you the information and all they would give you is a first name.

Once you find someone that can help you be ready to talk about the specifics of your claim. Have all of your facts in front of you so you can discuss them easily. Have access to a fax machine if possible so you can fax the documentation to the insurance company if necessary. If you do not have a fax machine to use than you can send it through snail mail. When you send the information through the mail include a cover letter and make sure you know exactly to whom at what address the documentation should be sent to.

It is a good idea when sending the documentation through the postal service to pay the dollar or so extra for a delivery confirmation. There are different options at the post office for this. You can make the insurance company sign for the package, etc. Decide which option is for you and get it. With some options you can even track the package through the USPS website.

Once your insurance company has your documentation hopefully the claim will go through without any further problems. If it is not that easy you will again need to phone your insurance company. This time if you get no where try being put through to the customer complaint department or customer fulfillment department. They may be able to help you or if nothing else let you air your complaint about how the situation is being handled.

If you have exhausted all of the options by speaking to your insurance company it might be time to go above them. If you truly believe you are being treated unfairly or your claim is valid get your state insurance department involved. Most all states’ department of insurance will take your complaints seriously. They are very knowledgeable about claims and should be able to answer any questions you have.

The department of insurance might end up guiding you to use your insurance company’s arbitration or mediation department. This division of the insurance company was set up to settle disputes. Your insurance issues might make you find your own arbitrator if the company’s is too biased, which they should not be. Read your insurance policy to see exactly what they say about using arbitration or mediation to settle disputes.

If your have followed all of the above steps and are still getting the run around it is time to contact a lawyer. Your insurance company might insist on arbitration and you might be stuck with that due to what your policy states. This does not mean that you cannot contact a lawyer to get assistance on how best you can state your case.