Car Insurance

John Constable needs a car to accommodate his wife who suffers from spinal trouble and very bad problems with her knees. He wants to buy a new car with automatic drive, power steering, high seats and easy entry and loading.

Yet again, it is driver and passenger health which is the priority here and we could always refer John to many of the answers that we have given before.

As ever it is going to be a question of trial and error and sitting in as many cars as John and his wife can bear to find out exactly the car that is most suitable. I agree that high seating position needs to be a priority and there should be plenty of room for his wife’s Zimmer frame, plus all the other bits of luggage and shopping that we have to squeeze in these days

The obvious choice is a small people carrier. John does not mention whether they need to carry any other passengers but it is safe to assume that they probably will. The question is, though, whether to go for a micro or compact people carrier as they seem to come in all sorts of sizes. I would not want to restrict John and his wife in any way, so something in the medium sector would probably be best.

The Toyota Yaris Verso is an odd looker, but there is no shortage of space. The front seating position is pleasingly upright, which means good visibility for the driver and There is plenty of room for oddments in the cabin and at the back there is a wide, square boot which is easy to load. However, the rear door is side hinged which does not suit everyone because sometimes John will need to be mindful of where he is parking so that it can be opened fully. When John needs more room the rear seats split and fold flat. These seats are light to move and so getting a Zimmer frame in should not be a problem.

Air conditioning is not available on the basic model and comes with pounds 11,945 T Spirit. The 1.3 petrol engine should be fine because it is economical returning 44 mpg and is lively enough. Being a Toyota Yaris it will be very reliable and the running costs are reasonable, so this Verso is a no-brainer buy.

As a budget characterful buy it has to be the Renault Kangoo which has bags of space, sliding rear doors and reasonably supportive front seats. Prices start at under pounds 10,000 too, but it might be too basic and not that comfortable or refined on the move.

Better, then, to go for the more focused Renault Scenic. The front seats are set very high and that’s without adjustment which could suit John’s wife perfectly. It may be classed as compact, but the Scenic is still pretty big. Take a look in the boot which even without folding the rear seats is massive.

It isn’t the cheapest smallish people mover; for value and ability the Citroen Xsara Picasso is probably the best option, but the Scenic is more refined and civilised.

Inside the Scenic is always a nice place to be and it feels like a high quality product. However, the entry level 1.4 Authentique model does not have air conditioning, which costs pounds 500 extra. Never mind, because it is possible to get discounts on the Scenic and decent fuel economy, around 38mpg and low insurance group four, means that running costs are low.

Selecting an insurance company
People use different criteria for choosing an auto insurer. Some base their decision on the opinions of friends, some on marketing and advertising promotions, and others simply on the cost of premiums.
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Typically, new auto insurance buyers tend to choose the lowest cost provider, assuming that most providers are essentially the same. As they become more experienced, and after having made a claim or two, they become more wise to other factors that determine a good insurance company.

Eventually, most automotive insurance buyers place the most importance on how companies treat them after filing a claim. Low premiums become much less important if a company won’t pay when they should.

What’s the problem?
Many thousands of auto insurance customers are happy with their insurers. A significant percentage of those have been with the same insurance company for 15 years or more. However, other customers don’t find their companies very satisfactory. The most frequent complaints that customers have with car insurance providers are:

* Refused claims
* Slow adjustment process
* Unsatisfactory payout on claims
* Feel forced to use insurer’s repair shop
* Poor repair quality
* High premiums
* Increased premium after accident
* Lack of personal attention or compassion
* Billing, policy, and other non-claim issues

Unfortunately, most of these problems don’t surface until after a claim has been filed, when it’s too late to find another company.

Why you need insurance
Let’s ask this question a slightly different way. Under what conditions would you not need auto insurance?

If you were financially wealthy and didn’t care about the risk of losing a substantial portion of your wealth, you could self-insure. That is, you would use your own money to pay for damage repairs, a replacement vehicle if your current vehicle is stolen or destroyed, towing and storage charges, medical bills associated with an accident, lawsuits by other parties when you are at fault in an accident that causes damages, injuries, or death, attorney fees, and property damages.

However, those who might be able to self-insure don’t for two reasons. First, the cost of insurance is relatively small compared to the potential losses associated with self-insurance. Why risk losing thousands or millions of dollars in an at-fault lawsuit? Second, states have laws requiring liability insurance as a way of proving financial responsibility. Although a bank full of cash might seem to accomplish the same thing, state laws don’t see it that way. State laws vary, so car insurance in New Jersey is not the same as in California.

Another reason for having auto insurance for those who buy with a loan or lease is that bank and finance companies insist on it. They want to protect their investment during the time of the loan or lease. If the vehicle is destroyed or stolen, they want to be sure they are paid.

In summary, you need insurance to protect you, your finance company, and other parties and property for which you might be responsible.

Types of insurance
An auto insurance policy might include one or more of the following types of coverage:

* Liability - Protection from risks associated with property damage and personal injury. Legal actions against at-fault drivers is becoming more common and more expensive. Multi-million dollar legal settlements are not unusual. Without insurance, a single accident could easily ruin an unfortunate family’s life. For this reason, liability coverage is the most important part of such a policy.
* Comprehensive - Protection from the cost of non-collision damages, vandalism, theft, weather-related damage, or natural disasters. Comprehensive coverage typically pays for the cost of repairs, or in the case that the vehicle is totally destroyed or stolen, the cost of a replacement vehicle - at “cash value” of the old vehicle. A deductible lessens the amount you are paid.
* Collision - Protection from the cost of repairing damages to your own vehicle. A deductible lessens the amount you are paid.
* Medical - Pays medical costs to you or other parties for accidental injuries associated with your automobile. There are limits specified in your policy regarding maximum amounts paid for each incident.
* Uninsured Motorist - Protection from costs associated with an accident caused by another driver with insufficient liability coverage - or no liability coverage.
* Towing and Labor - Pays cost of towing your damaged or disabled vehicle. Maximums usually apply.
* Rental Reimbursement - Pays cost of renting a replacement vehicle after an accident.
* Gap Coverage - Pays the difference between the amount owed on a loan or lease and the “cash value” paid by your insurance company in case of theft, fire, or accident. A gap waiver or gap insurance is usually provided with most leases, but not loans. Some auto insurance companies offer it and some do not. If you are going to be “upside down” on your loan, it’s good coverage to have.

Losses from property damage, medical and legal costs, and lost income add up to billions of dollars annually for automobile mishaps. Automobile insurance plays an important role in protecting consumers from serious financial losses that can result from such accidents.

The basic types of auto insurance coverage include:

* Bodily Injury Liability. Pays your legal defense costs and claims against you if your car injures or kills someone. Covers family members living with you and others driving with your permission.
* Property Damage Liability. Pays your legal defense costs and claims against you if your car damages another’s property. Does not cover your property, including your auto.
* Medical Payments or Personal Injury Protection. Pays medical expenses resulting from an accident for you and others riding in your car. Also pays for you or your family members injured while riding in another’s car or while walking.
* Collision. Pays for repairs of damage to your car caused by a collision with another vehicle or any other object, regardless of who was responsible.
* Comprehensive Physical Damage. Pays for damages to your car resulting from theft, fire, hail, vandalism, or a variety of other causes.
* Uninsured or Underinsured Motorist. Pays for costs related to injuries or property damage to you or your family members and guests in your car caused by an uninsured, underinsured, or hit-and-run driver.

WAYS TO SAVE $ ON YOUR POLICY

State-by-State Requirements . . .

Not all states require you to have automobile insurance, but all states do require you to prove that you can pay specified amounts if you cause bodily injury or property damage while driving. Your proof would be insurance or large amounts of cash or some other security. Without one of these, you may lose your driver’s license and registration. Visit the Insurance Information Institute’s web site at www.iii.org to find the specific auto insurance coverages required by each state.

Savings Check List . . .

* Comparison Shop. Prices for the same coverage can vary significantly from company to company. You should get at least three different quotes. Call your state insurance department for ideas about companies and agents to contact. To find a listing for your state’s department, visit the National Association of Insurance Commissioners’ (NAIC) web site.

Also, check the financial ratings of insurance companies with one of the major ratings services. The following provide free information on the claims-paying ability ratings of companies: Standard & Poor’s at www.standardpoor.com, 212.208.1146; Duff & Phelps Credit Rating Co. at www.dcrco.com, 212.908.0200; and Moody’s Investor Service at www.moodys.com, 212.553.0300.

* Ask for Higher Deductibles. Deductibles represent the amount of money you pay before your insurance company fulfills a claim. By requesting higher deductibles on collision and comprehensive (fire and theft) coverage, you can lower your insurance costs substantially. For example, increasing your deductible from $200 to $500 could reduce your collision and comprehensive cost by 15% to 30%.

* No Comprehensive and/or Collision Coverages on Old Cars. It may not be cost effective to have collision or comprehensive coverages on cars worth less than $1,000 because any claim you make would not substantially exceed annual cost and deductible amounts. To determine the value of your car, call your bank or refer to the Kelly Blue Book to car buying available at a library or at www.kbb.com.

* Buy a “Low Profile, Low Maintenance” Car. Cars that are expensive to repair, or that are favorite targets for thieves, have much higher insurance costs. See the National Insurance Crime Bureau at web site www.nicb.org for a list of the U.S.’ top stolen vehicles.

* Low Mileage Discounts. Some companies offer discounts to motorists who drive fewer than a predetermined number of miles a year.

* Location Considerations. Premium costs tend to be lowest in rural communities and highest in cities.

* Automatic Seat Belt and/or Airbag Discounts. Some coverages provide discounts if you have automatic seat belts and/or airbags.

* Anti-Lock Brakes. Anti-lock brakes improve steering control and stability when a car is brought to a stop, thus reducing accidents. Some states, including Florida, New Jersey and New York, require insurers to give discounts for cars equipped with anti-lock brakes while some insurers have a nationwide discount in place.

* Other Discounts. Some insurers offer discounts for a variety of other qualifications like:
o no accidents in three years;
o drivers over 50 years of age;
o driver training courses;
o anti-theft devices;
o good grades for students; and
o having more than one car insured with that company.

* Specialty Coverages. Adding supplemental insurance coverages like towing and labor or car rental reimbursement to your basic auto insurance policy may save you money. For example, for an average of $1 or $2 a month added to your auto insurance, you can purchase coverage that will pay for your rental car while your car is being repaired from an accident. If you have this or some other specialty insurance, be sure to remind your insurance company or agent when you file a claim.

Most auto insurance companies offer a variety of discounts that can save you money on premiums. All the discounts that a particular company might offer may not be available in all states. If you think you might qualify for any of the discounts mentioned here, make sure you check with your insurance company to determine if it’s available in your state.

Following is a list of possible types of discounts offered by insurers. Note that discount types, amounts, and qualification requirements can vary between different insurance companies. State laws can also affect coverage options and discount availability.

Accident-free Discount - Available to drivers who have no at-fault accidents over a specified period of time, usually about three years. If an accident occurs later, the insurance company may remove the discount, increase rates, and begin a new qualification time period for the insured.

New Car Discount - Available for new cars that have never been titled. Qualification rules may vary.

Economy Car Discount - Available for certain economy vehicles. Qualification rules may vary.

Good Driver Discount - Available to drivers with good driving records, no at-fault accidents, and no traffic offenses within a specified time period, usually about three years.

Defensive Driving Course Discount - Available to drivers who complete a certified defensive driving course within a specified time period.

Drivers Education Course Discount - Available to drivers who complete a drivers training course with a qualified instructor. This discount is typically restricted to young or new drivers.

Good Student Discount - Available to students and graduates under age 25 who have attained a specified level of scholastic achievement. Home-schooled students may also qualify.

Multiple Automobile Discount - Available if two or more insured vehicles are driven by multiple related people living at the same address.

Multiple Policy Discount - Available if the insured has other types of insurance with the same company, such as home owner’s or life insurance.

Safety/Anti-Theft Equipment Discount - Available for vehicles that have certain specified safety equipment, anti-theft equipment, or have specified safety ratings.

Senior Discount - Available to those who qualify as a senior adult. Retirement status may provide additional discount.

Farm Discount - Available for vehicles primarily used on farms.

Deductibles

Increasing the deductible on your auto policy can save you money. However, make sure that you can afford to pay that amount in case of an accident. Many people unwisely maximize their deductible, even though they can’t afford to pay it after an accident, betting that an accident won’t happen, or that any accident will be the other person’s fault. This is not generally a good strategy. However, if you take the money you save in premiums by setting a higher deductible, and tuck the money away each month in a savings account, you may be able to cover the higher cost of an accident, especially if your accident occurs months after you begin you savings plan. Furthermore, if you never have an accident, the money is still yours, not the insurance company’s.

Other factors that affect your auto insurance rates

Credit score - Most insurance companies now use your credit score as one of the means of determining what you pay for your coverage. However, scores created by insurance companies are often not the same as normal FICO scores. Methods for creating scores vary by company. The reason for using credit scores is that have been studies showing a correlation between certain credit factors and the number of claims a customer is likely to submit.

Where you live - Drivers who live in less populated rural areas will pay much less for insurance than someone who lives in New York City where the risk of accidents and theft are higher.

Your age - Statistics show that young drivers have more accidents than older, more experienced drivers. Insurance companies base rates on those statistics.

Your sex - Male drivers pay higher premiums than females, again because statistical show that males have more accidents and file more claims.

Your marital status - Married drivers pay less than single drivers. Married people tend to be older, more experienced, and more stable.

Your job status - People with steady jobs, or attend school, tend to pay less due to a more predictable and stable lifestyle.

Where you drive - You will pay more if you drive long distances on busy streets or highways in high-accident areas, or if you park your car in high-theft areas.

Your vehicle make/model - Studies show that certain vehicles are involved in accidents or thefts more often than other vehicles. Some vehicles are more expensive to repair than other vehicles. Expensive vehicles cost more to replace than less expensive vehicles. All these factors affect car insurance rates.

Your driving record - You will pay more if you have numerous driving violations or at-fault accidents. Even accidents for which you are not at fault can affect your rates because it indicates you may be driving in a high-accident area.

Your claims record - Submitting claims typically increases your insurance rate. Some companies now offer “forgiveness” plans that overlook a small number of accidents and claims. These policies cost more. don’t submit claims unless the cost is significantly more than your deductible.