Car Insurance

Many personal auto insurance companies consider your credit information when determining how much premium to charge for your insurance. So if you are calling around for new insurance, keep in mind that many insurers are looking at your credit history. I hope that we will be able to let you know why and how they do this.

The reason that some insurance companies use credit information is because they feel there is a direct correlation between consumer’s credit history behaviors and expected claims that may occur.Therefore, they feel that people with better credit behavior are less likely to have severe insurance losses.

Many insurance companies still use your age, driving history, type of vehicle, andwhere you live, in determining how much you should pay for your insurance. Therefore, if you have not established a credit history yet, the companies that use credit history may not be best for you. They may not allow you to be eligible for certain discounts, which could result in higher premiums.

The companies that do use credit scoring will still use other factors in determiningyour premium. They will also use your age, driving history, type of vehicle, whereyou live in determining how much you should pay for your insurance.

Is it fair for an insurance company even look at my credit information without my permission? The answer is yes. The Federal Fair Credit Reporting Act says “Reasonable procedures. It is the purpose of this title to require that consumer reporting agencies adopt reasonable procedures for meeting the needs of commerce for consumer credit, personnel, insurance, and other information in a manner which is fair and equitable to the consumer, with regard to the confidentiality, accuracy, relevancy, and proper utilization of such information in accordance with the requirements of this title.” This can be found at http://www.ftc.gov/os/statutes/fcra.htm

If you feel that your credit history is better then the insurer can find, make sure the insurer has your correct name, address, social security number, and date of birth.

Some insurance companies will look directly at your actual credit reports when determining your rate, however most will use what is called an “insurance credit score.” An insurance credit score is developed by using statistical techniques and methods to predict the likelihood a consumer will have a higher than anticipated loss. These are similar to what lenders use to predict the reliability of an applicant repaying a loan.

Insurance companies use many factors in determining your credit score. Here are some examples of those factors:

* Public records: bankruptcy, collections, foreclosures, liens, charge-offs, etc.
* Past payment history: the number and frequency of late payments and the days betweenthe due date and late payment date.
* Length of credit history: the amount of time you have been in the credit system.
* Inquiries for credit: the number of times you have recently applied for new credit,including mortgage loans, utility accounts, and credit card accounts.
* Number of open lines of credit: the number of credit cards, whether you use themor not.
* Type of credit in use: major credit cards, store credit cards, finance company loans,etc.
* Unused credit: how much you owe compared to how much credit is available to you.

Your insurance credit score may differ from company to company, as they will use different factors in determining your premium. Notice that we call it an insurance credit score. This means that it encompasses many factors including credit.

Since each insurance company uses different techniques to determine your credit score it is hard to tell you what a good credit score is. Usually a good credit score will result in lower premiums.

Your agent or company is not obligated to tell you your credit score. In fact, they might not even know what it is. All they usually know is that your credit score qualifies you for a specific rate or policy. Some companies also offer better rates under each qualifying tier.

If you feel that there is incorrect information on your credit report, you should tell the credit bureau. If you report an error, the credit bureau must investigate the error and get back to you within 30 days. You can ask the credit bureau to send a notice of the correction to any creditor or insurer that has checked your file in the past six months. Once the errors are corrected, it is a good idea to get a new copy of your credit report several months later to make sure the wrong information has not been reported again.

The three national credit bureaus are:

Trans Union (www.transunion.comor 800-888-4213).

Equifax (www.credit.equifax.comor 800-685-1111).

Experian (www.experian.com or 888-397-3742).

Tell your insurance company. Do not wait until the credit bureau investigates the errors to contact your insurer. Tell your insurance company right away and ask if the errors will make a difference in your insurance. If the errors are big, tell your insurer that you are disputing the information and ask if they will wait touse your credit information until the errors are corrected. Small errors may not have much affect on your insurance credit score. If the errors are big, it can make a significant difference in your premium. Some companies are unable to adjust the premiums until the score is corrected, but it does not hurt to ask.

If you have taken the steps to improve your credit score, you should ask your insurance company to re-evaluate your credit score at renewal.

Many factors affect the premium you will pay for auto insurance. Each is a statistically based risk for a specific population. The higher the risk associated with a person, the more he or she is likely to pay for coverage. We have elaborated on some of the risk factors below, but there are numerous others, including driver’s gender, miles driven per year, purpose for using the vehicle (commuting to work, using for work, leisure only), etc.

* Age
Statistically, drivers under the age of 25 are at greater risk of being in an accident than those over age 25. Drivers between the ages of 50 and 65 generally have the safest records.
* Gender
Women are statistically safer drivers, but that trend is changing as more female drivers get on the road.
* Marital Status
A married person will pay less than a single person with an identical driving record.

You can think about these factors and determine what you can do to change them in your situation. You may be able to save on insurance based upon these decisions:

* Geography
Where you live makes a difference. Folks living in areas with little or no traffic are likely to spend less on insurance than those living in congested cities or suburbs because areas with a lot of traffic tend to see more accidents. Some neighborhoods also have a higher rate of vehicle thefts, which can result in a higher premium.
* Driving Violations
Having an accident or moving violations on your record (speeding tickets, DWI, reckless driving, etc.) put you at a higher risk for accidents and will likely mean a higher premium. Some insurance companies will penalize you for your record for as many as five years from when the incident occurred. However, keep in mind, as your record improves, your premium will get lower.
* Vehicle Type
A cheap car will cost less to insure than that status symbol SUV sitting on 24″ rims.
* Accident Claims
A driving record that is clean and free of accidents will hold far better for you than lots of tickets and/or accidents.
* Credit Rating
Many insurance companies view having a poor, or even no credit history as suggestive of higher risk and thus, charge you a higher premium. Monitor your credit rating free to see if you can get a better score. A better credit score will save on insurance premiums.
* Occupation
Insurers have statistically found a correlation between your occupation and risk. For instance, a newspaper delivery person is most likely a higher risk than the personal banker sitting at their desk all day.
* Education
A higher education can save on your premiums.
* Driving distance to work
* Miles driven each year
* Years of driving experience
* Business use of the vehicle
* Whether or not you currently have auto insurance and how high are your limits
* Theft protection devices (often results in discounts)
* Multiple cars and drivers (another opportunity for discounts)

What can I do right now to make sure I have the lowest premium?

Shop around and compare quotes from different insurers. CarInsurance.com puts many insurance companies on one site so you can compare them in one place. Carriers base their premiums on their claims experiences, which naturally differ. One company may see your area as a higher risk than others may. Another may charge more because of your occupation. Shopping at http://www.carinsurance.com makes it easier because you can quickly see multiple companies and their rates for your particular situation. Where do I go for quotes?

One stop can take care of it all. Go to www.carinsurance.com where you can receive multiple quotes, pick the best price, and then purchase. Get covered immediately on-line or over the phone. It REALLY is the easiest way to purchase car insurance. Enter your zip code above.

You don’t need to be a great writer to draft a demand letter. Setting out the necessary information to support your demand should be sufficient. CAUTION: If you are not confident that you can write the letter, you may want to consult a personal injury attorney.

Here is a sample demand letter in a fairly simple claim:

Dear Adjuster,

On October 15, 2005, my 2001 Honda Civic was struck by your insured, Joe Smith’s 2002 Volkswagen Jetta, at the corner of Elm and Main in Silver City when Mr. Smith ran a stop sign. His car’s front end hit my driver’s side door and left fender causing $3,500 in property damage, paid by your company. My seatbelt was on. The police report shows Mr. Smith was at fault. He received a ticket for running the stop sign.

An ambulance took me to Town Hospital’s emergency room where I was x-rayed and examined. My injuries were severe bruises to my upper body, left arm and left hip, and soft tissue damage to my neck and back. I was released from the hospital after several hours and sent home with instructions to stay in bed for a few days, use ice, wear a neck brace, and take Vicodin for pain and Flexiril to relax my muscles.

I stayed home from my job as a teacher for one week. I had follow-up treatment with my family physician, Dr. Harvey Stein, six days later. He told me to continue icing three times a day, and referred me to a physical therapist for my neck and back. I saw Julie Lyons, RPT, for 4 weeks, twice a week, and then for 4 more weeks, once a week. I am still doing the stretching and strengthening exercises at home. I’ve gone back to see Dr. Stein twice and have another appointment with him next week. I still have quite a bit of pain in my neck and back.

My medical bills totaled $3,450 as follows (Copies of bills attached):

Ambulance: $650

Hospital E.R, x-rays, exam, neck brace: $490

Dr. Stein: $225

Julie Lyons, RPT: $1216

Prescriptions: Flexeril, Vicodin: $219

I have lost wages in the amount of $1000. (Documentation attached.)

As a result of the accident, I had to cancel reservations for a conference. The nonrefundable fee was $240. (Receipt attached.)

As a result of being hit by Mr. Smith’s car, I couldn’t take my children to school and back for a week. I hired someone to help with that for $75 (Receipt attached.) I also had to hire a cleaning person to take care of the house and I will continue to need someone as long as I have pain in my neck and back. So far, this has cost me $600. (Cancelled checks attached).

My special damages come to $5,365. My future damages may be another $1,500 for medical bills and house cleaning.

I have had considerable pain and suffering as a result of this accident and continue to suffer from neck and back pain. I demand settlement of my claim in the amount of $25,000. Please respond to this demand with an offer to settle within 15 days.

It is an obvious fact that most new and young drivers are on a limited budget when it comes to car insurance so with this in mind this article has summarised 17 handy tips which you should try to consider when trying to find a low cost motor insurance policy.

1. Do some research – Try to find insurance company’s that specialize in policies for your age, gender, car and occupation. Ask around, people who have the same occupation or car as you could give you valuable information on what insurance will suit you best, and whether the policy they are using is good or bad. Shopping around is probably the best tip you will find and is very inportant if you want to find the best quote.

2. NEVER take the first quote – The first quote you get on your car is most likely to be quite high. Insurance companies known that until you have received a few quotes you will not know a realistic one that will suit you. So never take the first quote you receive no matter how good the deal seems.

3. Phone around – When you have a few companies that have caught your attention phone up the companies or car insurance brokers (3rd parties who are simply giving you a quote and not actually ‘underwriting’ your policy) see what quotes they are giving and if they can give any better.

4. Have awareness – Those companies who have all this money to spend on advertising probably are not giving the cheapest policies to customers, but the large amount of money could mean a lot more coverage is available.

5. Play companies off against each other – Do some research and make detailed notes about all the aspects of each quote you receive, then play the companies off against each other. There isn’t much point in lying as most the insurance companies are very aware of the real cost of a car insurance quote. The phone operatives have the ability to negotiate on the price of their quotes and all of them would rather drop the cost than lose good business to a competitor.

6. Mileage – Consider how much mileage you are roughly going to do, less mileage means less time on the road which reduces the chances of accidents. A limited mileage policy is a very good way to get better car insurance quotes.

7. No Lying – LYING! will invalidate your policy, and most companies record telephone calls to cover themselves against litigation. State all modifications on your car and if someone else is likely to use your auto-mobile and whether you will use it for business.

8. Drive more carefully – Not having accidents is very hard to escape but by joining the Pass Plus scheme or by taking an advanced drivers’ course, discount offers can reach up to 35% from some of the major insurers.

9. Protect your no-claims bonus - This may increase the premium by a few pounds, but this fades into insignificance against the potential loss of a 60% discount on a premium of several hundred pounds. But the definition of a protected no-claims bonus can vary widely between insurers. Though accidents caused by another driver will normally have no impact on such a bonus, those caused by the insured could.

10. Garage – If you store your car in a garage, then your car is a lot less likely to get stolen or damaged, so a good way to bring down the cost is to store your car in a garage but remember lying is a criminal offence and would cause you a lot of trouble.

11. Buy online – A lot of insurance companies offer discounts for people who buy online.

12. Voluntary Excess - If you agree to accept a voluntary excess (the amount you agree to pay in the event of an accident), you can reduce your premium.

13. Don’t automatically buy comprehensive - If your car has a low value you can save a third off your premium by insuring your car for Third Party Fire and Theft.

14. Named drivers - Adding a named older driver to your car insurance policy, i.e. your parents, can save you 10% on your premium. Likewise, avoid having younger named drivers on your policy.

15. Pay your premium in one go - It is often cheaper to pay your years car insurance in one lump sum rather than in monthly installments. Most insurers charge interest of around 15% APR (some up to 30%) to allow you to pay your premium in monthly installments.

16. Pass Plus - The pass plus examination is for new and young car drivers who have passed their practical test. It is an intensive training course that helps improve new and young drivers abilities on the road. The pass plus allows you to get up to a discount of up 35% on your car insurance. Taking the Pass Plus will cost around £100 but given the high cost of new driver car insurance you should save more than this on your car insurance premium. Ask your driving instructor for details.

17. Work traveling – If you do not use your car to travel to work then you might be getting coverage you do not need.

Usually, the best way to get lower rates for a student is to add their name to an existing car insurance policy. If they own the car themselves or are obviously the primary driver simply adding their name isn’t possible. There are, however some more tips specific to students for lowering car insurance rates. Have a look.

Outrageously high student car insurance rates

A recent survey showed that the average student can expect to shell out anywhere between four and ten thousand dollars a year. Car insurance companies charge these outrageous rates because, of course, new drivers are a much higher risk.

Thinking back to when I was in high-school it’s a wonder any of us were insurable at all. There were however some among us that certainly deserved much lower rates than others. Most of those safer drivers fell into an easy to spot pattern. With a bit of searching you should be able to find a car insurance company that looks for this pattern as well.

Criteria car insurance companies use to determine lower student rates:

This is by no means a complete list of criteria car insurance companies look at to determine rates. These are simply common signs that a student isn’t a hormone enraged psychopath behind the wheel of a death machine.

Lower rates for Grade ‘A’ Students

The majority of insurance companies consider honor roll students to be safer drivers. Perhaps it’s because they have more to live for, or maybe it’s because they’re so busy studying that they don’t have much time for driving dangerously. Whatever the case submitting a report card with a ‘B average could bee all you need to lower your rates.

Extracurricular activities equals safer driver

College students in the Golden Key National Honor Society receive lowered rates from most car insurance companies. Also students that are involved in or are members of fraternities, and student associations like student congress are more likely to receive a discount on their overall premium.

Proximity to school and work Insurance companies figure that any student that owns their own vehicle must have a job. If said job is within a certain distance from home and school you may qualify for a low-mileage discount. This can also include university students that live on campus and therefore don’t need to drive back and forth to school on a regular basis.