Are Car Insurance Premiums Rising?
Sainsbury’s Bank publishes their Car Insurance Index every year, taking a snapshot of UK car insurance premiums and tracks trends in the motor insurance industry. According to their report released in early September, the cost of insuring your vehicle rose an average of 4.2% since June 2006. In cash terms, most motorists are paying about £19.80 more to insure their cars this year than last year.
While car insurance premiums are definitely on the rise, those rises don’t affect everyone equally. Your gender and age have a big effect on just how much your car insurance has risen and is likely to rise. According to the figures quoted by Sainsbury’s, car insurance for men has risen faster than car insurance for women. Between June 2006 and July 2007, the average car insurance premium for men rose 5.2% to £518.46 as opposed to 3.1% to £442.28 for women overall. Men are generally considered to be a higher risk because of their tendency to take greater risks, which is borne out by the statistics which show more accidents per capita among men than among women in every age range.
Age is another big factor in the amount of insurance premiums that you pay, and in the percentage by which auto premiums have risen in the past year. For drivers under 25, the highest risk category, insurance has risen a whopping 11.2% since July 2006. The next biggest rise was for drivers in the 25-40 age group, reflecting the fact that this age group tends to log more driving hours than other drivers. Car insurance premiums for this age group rose 5.81% overall. The lowest rise in premiums for any age group was for those drivers age 65 and over - a mere 2.7%.
When you couple the average rise in auto insurance premiums with the fact that the groups whose insurance rose the most already have the highest premiums (males up to age 25, in particular), it becomes clear just how much more expensive it is to drive in the UK this year than last.
Surprisingly, most drivers do not switch insurers, even after a staggering premium rise. Most feel that it’s easier and more convenient to just stay with their current insurers than it is to hunt down another motor insurer who might offer them better rates. In fact, only about 1 in 5 drivers even bother to get quotes from another insurer when renewal time rolls around. That convenience could be costing them dearly. While not everyone will find lower rates by shopping around, most drivers who switch their car insurer save about £100 per year.
Of course, the cheapest quote may not offer you the best deal, or save you money in the long run. That £56 you saved on the premium could be completely wiped out if it turns out that you don’t have windscreen cover when someone pitches a rock through your windscreen. So, it’s important to compare policies as a whole when you’re shopping for the best car insurance policy, don’t just focus on price.
A good strategy is to use two price comparison websites such as CompareTheMarket.com and Tesco Compare to get quotes from the majority of the UK market and approach the insurers direct to verify premiums and compare policy features.
The Quest For A Cheap Car Insurance Rate
When you are seeking the best car insurance rate, the first thing you need to do is understand that this kind of comparison shopping is going to take time, but that time will be well spent in terms of the money you can save. The auto insurance companies take many factors into account to price your rate, and an understanding of those factors can help you determine where to get your best rate.
One of the most important factors that will determine your rate is your credit rating. Insurance companies first look for someone that is going to pay their bills promptly. Most companies take bad credit very seriously and often times will not even write a policy to someone with bad credit. So before you start calling around, get copies of your credit reports and clean up any old items that may be listed on it.
It probably comes as no surprise that your driving record will impact your rate quote. This is only for moving violations, not things like parking tickets, and only in the past three to five years. If you have moving violations, your rate is going to be higher. Note that this also applies to whoever else is listed on the policy as a driver of the car, such as your spouse and your kids.
Who will be driving the car? If you have drivers who will be driving the car who are under age 25 or over age 70, your rate will be higher. Keep in mind that the insurance companies depend heavily on statistics, and these two demographics have shown that they have a much higher percentage of claims and accidents.
One other factor that the insurance companies will use to calculate your rate is the gender of the drivers. Often times female drivers will get better rates because on the average they tend to be safer drivers than their male counterparts. This trend is starting to change however and it won’t be long before the rates will be equal, no matter the gender of the driver.
Married drivers will almost always get a lower rate quote since the statistics show that married people are more responsible than their single counterparts. You may know married people and could dispute that, but that is what the records show. Also, married people tend, as a group, to be more responsible with driving as well as paying their bills on time.
Most insurance companies will offer a multi-product discount if you have more than one type of policy with the same company. For example, if you also have life insurance or home insurance with the company in addition to your car insurance, you can frequently get a discount on both policies. But it still pays to shop around to make sure you are not still paying more than you need to.
Understand the factors that go into pricing a car insurance rate and do what you can to take advantage of the factors in your favor to get the best rates. Ask the insurance agent if there is anything you can do to get a lower rate, where some companies will offer a discount if you agree to take and pass a driver improvement class.
Cheapest Car Insurance - Low Premiums - A Huge Money Savior
Many companies are now offering cheap auto insurance keeping the inconvenience of customers in mind. High premiums and price hikes are the two factors that make insurance policies unaffordable. These companies offering affordable policies have come up with great schemes and discounts. You can search online to find the cheapest plan that match your requirements. There are many sites on the net, you can compare different car quotes and choose the best-suited policy.
Given below are a few deals that the companies offering the cheapest car insurance throw in to attract the customers:
No Claim Bonus Incentive- No claim discount is very popular among both the companies and the customers. It cuts down the premium cost for the customers. This is also a good option for the companies as those who haven’t had an accident for years are unlikely to have one in the future. This avoids the claim made by the individual.
Women Only Cheap Car Insurance- There are many companies catering to females only. Women are involved in fewer accidents as compared to men. This allows the companies to offer low cost premiums to females. Women are given cheapest policy, as the cost to the company is also low.
Cash Back Offers- This cuts down the indemnity cost greatly. Many companies offer lower quotes than you have received from elsewhere. This works as a cash return rather than the company offering you cheap auto insurance. It also ensures to keep the policy premiums low.
Before going in for any policy, it is a good idea to understand all the negatives and positives of the policy. The internet is the best place to find online affordable car insurance. You can compare different policies and zero in on to the company offering you the cheapest car insurance.
Online Auto Insurance Quote
If you are searching for cheap auto indemnity, it is a good idea to search online. You can request for online quotations and compare them to find the most suited deal. To get quote for your policy, you need to choose a few reputed companies. A few basic personal, employment and details are needed to be filled in the template form provided on the websites. It is imperative that you do not commit any errors while giving your details. The quotes that you will receive are worked on the information provided by you.
Companies offer attractive offers to lure their customers to buy cheap policies from them. However, it is advisable to compare different indemnity polices and car quotes in order to find the cheapest car insurance.
On defense: driving classes could lower your insurance rates
It’s Friday afternoon. You have the whole weekend ahead of you, so you’re anxious to get home. In the rearview mirror, you spot a police car’s flashing lights. The siren is wailing, signaling you to pull over. The officer leaves you with a $95 ticket and two points added your license. Your first thought: “The insurance is going to go through the roof.” Your second thought: “Two more points after this and my license will be suspended.” Don’t panic. Take a defensive driving course.
According to the National Safety Council (www.nsc.org, 630-285-1121), 28 states allow up to three points to be subtracted from the total on your driving record if you have received violations within 18 months before course completion. Also, 34 states offer insurance discounts of up to 10%. “In other states where all companies are required by law to offer a discount, individual companies operating in those states offer premium reduction,” says Thomas Chartoff, a New Jersey police officer and defensive driving instructor. Insurance points, which are assigned by your individual insurance carrier, are used to determine the cost of your auto insurance and, therefore, are not reduced upon course completion.
Since the courses are for experienced drivers, don’t expect driving instruction basics. Also, don’t expect to take a vehicle out on the open road. You actually sit in a classroom for an all-day seminar that has a quiz at the end. The quiz is designed to see if you were listening and has no impact on getting the course certificate at completion, “The courses don’t teach you how to drive; they teach correct driving techniques,” says Chartoff. Topics include judging distance and being proactive instead of reactive. Chartoff mentions that the content of each course will be slightly different depending on the instruction. Course duration is usually six to eight hours and is typically intended for traffic violators; repeat offenders/problem drivers; traffic violators ages 16 to 24; and professional truck, van, and fleet drivers.
Those interested in a defensive driving course are warned to use caution when considering online driving schools. “The material is there, but they do not always have an instructor, which is a key part of the course,” says Chartoff. It is imperative to know whether or not the course is accredited by your particular state, for both traditional and online courses. A course can be accredited in one state and not another.
Course prices vary from $40 to more than $100 depending on the instruction and location. Each state has a different limit on how often you can take a course, in New Jersey, for example, a course can be taken once every five years for license point reduction and once every three years for an insurance discount. For more information on defensive driving courses, license point reductions, and insurance discounts, contact your insurance company, NSC, or AAA at 800-763-9900 or visit www.aaa.com.
Whatever happened to no-fault? - no-fault automobile insuranc
Newspapers lately have been full of stories about the “liability crisis.’ Insurance company profits are falling, premiums are rising, and the industry and consumers alike are starting to panic. In New York City, the tram line from Manhattan to Roosevelt Island shut down because the company that insured it would not renew the policy. In Janesville, Minnesota, last year’s Nativity pageant was canceled because insurance costs were prohibitive. In St. Anthony, Idaho, unaffordable insurance premiums closed down the city office building, the public library, the senior citizen center, and the snowplow service.
The liability crisis has inspired much debate about whether the enormous volume of litigation that accounts for much of the high cost of insurance ought to be restricted. Unfortunately, the question of whether to limit the right to sue can be frustratingly muddy. Do we really want to ease the pain felt by manufacturers of drugs that cause birth defects? Should architects and engineers who design buildings that collapse avoid responsibility?
But if the liability crisis as a whole seems to defy simple solutions, there is one substantial chunk of it that does not: automobile accident cases. In state courts around the country, automobile-related lawsuits often account for more than half the case load, driving up auto insurance premiums, delaying benefits for accident victims, and devouring dollars that might be spent compensating serious injury. Rather than spend time and money arguing in court about who is at fault when two cars happen to collide, as cars inevitably do, why shouldn’t insurance companies automatically pay out benefits to any policyholder who suffers in a traffic accident, no matter what the circumstances?
This idea, of course, got a lot of attention during the 1970s under the name of no-fault auto insurance. Massachusetts passed the first no-fault law in 1970. Twenty-three other states followed suit. There even was an effort in Congress to establish no-fault nationwide. But you don’t hear much about no-fault these days. When you do, the news is usually that some state government has lost faith in it. No new states have been added to the no-fault roster since 1975, and Nevada, Pennsylvania, and the District of Columbia, have repealed it. Conventional wisdom seems to be turning against no-fault as yet another starry-eyed liberal reform that failed.
But if no-fault is to be judged a failure–and we think it shouldn’t be–the problem lies not in the idea but in its half-hearted execution. Even where no-fault has been tried, the fault-based tort system that no-fault was meant to replace usually has remained relatively unthreatened. No-fault statutes have not gotten enough victims of automobile accidents out of our courts because the lawyers won’t allow it.
No fault, no fee
The case for no-fault was and remains simple and compelling: the traditional, tort law process of fault-finding gobbles up time and money that could be spent compensating people who need help. Under a pure tort system, if a driver suffers injuries from a car accident, he is not automatically entitled to compensation from his insurance company. Before he can collect, he must demonstrate to a jury that another driver was responsible for the accident. If the victim wins, the wrongdoer (actually, the wrongdoer’s insurance company) must pay him not only for his out-of-pocket expenses–medical costs and the loss of wages–but also for the “pain and suffering’ that results from the injury. If he loses, he gets nothing.
In contrast, under no-fault, an accident victim does not need to prove that anyone was at fault before he gets his money. A no-fault policy insures against any circumstance that might injure a driver. The harm might come from another driver; it might also come from the victim’s own carelessness, a situation the tort system cannot address. Consider a collision with a stationary object. If you crash into a tree, you’ll have a hard time convincing a jury that it ran out into the middle of a road. (Anyway, trees tend to be insolvent.) Or consider a collision with another driver that injures the driver who caused the accident. Under the tort system, if you’re at fault you can’t collect.
And what about the broad gray area in which most traffic accidents occur–cases where both drivers are at fault? Maybe one fellow was speeding because he was a little anxious about being late for an important business meeting. Maybe the other was looking out the window at an attractive woman who was crossing the street. The tort system’s usual solution is to have the two men slug it out in court over who was more guilty. Both men will be tempted to distort the truth in order to collect; moreover, if the jury concludes that both were negligent, both men may be losers –neither may be compensated for injuries. Under no-fault, the question is irrelevant.
The difference no-fault can make in the lives of auto accident victims was illustrated dramatically by two cases cited in a 1984 issue of Consumer Reports. In Illinois, which operates under the tort system, 25-year-old Robert Demichelis was returning home from a basketball game at Northern Illinois University when he dozed off at the wheel. His Datsun 200SX bounced off a guard rail and smashed into a concrete divider in the middle of the interstate. Demichelis’s head struck the windshield, and he suffered brain damage. His ability to reason and make judgments was sufficiently impaired that he was unable to hold a job. Health insurance covered his medical bills, but his family ended up paying for his rehabilitation treatments. At the time the article appeared, Demichelis’s family had paid out $15,000. Because they had no one to sue, there was no auto insurance money to cover the cost.
Everybody into the pool: supporters of pooling mechanisms to buy insurance say they’ve been one of the insurance industry’s big success stories
Pools come in different shapes, sizes and concepts, but all offer a method for spreading the members’ risk.
* In New York, a risk-sharing pool made up of public colleges and universities is closely following new workers’ comp laws favored by the new governor, Eliot Spitzer.
* Supporters of public-entity pools believe they do a better job at correlating premium contributions with exposures.
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Once upon a time, from the mid-1970s through the early 1980s, there was a hard insurance market, with high prices and limited availability of liability coverage. It was a difficult era for colleges and universities looking to insure their risks. They were at the mercy of prices over which they had no control.
“We had to take control of our own destiny,” explains Roger Fell, client executive of Marsh Inc.’s Philadelphia office. The market presented short-term challenges but long-term opportunities. Then the federal and state governments entered the picture to help with the critical hard-market situation, passing specialized legislation that enabled public entities and colleges and universities to form insurance pools to spread the risk and reduce their insurance costs. And, thus, a new strategy was born.
As with all cycles, that particularly hard market cultivated a concept for dealing with the difficulties of obtaining insurance. Pools, as lobbying groups and in different forms and structures, have been around since the late 1800s, but didn’t really take off until legislation allowed two or more entities to form a partnership for buying insurance products.
As such, pools offer members the opportunity to reduce their insurance costs while advancing better loss-control measures and policies. Public entities, such as municipalities, school districts and related departments, were among the earliest industries to embrace the pool strategy, followed by the typically independent colleges and universities, which saw the benefits too.
Today, there are more than 480 public-entity pools and dozens of university pools. They tend to be homogeneous–operated by all colleges or all specific types of public entities so their liabilities and exposures are similar.
“Pools are one of the biggest success stories in insurance in the past 50 years,” says Rich Terlecki, area senior vice president and co-managing director of Arthur J. Gallagher & Co.’s public-entity pooling niche.
Pools come in different shapes, sizes and concepts, but all offer a method for spreading the members’ risk and act as insurance companies, except they’re owned by the members. Captives are a version of pools, capitalizing the entity, sometimes forming a trust, and retaining enough premium income to pay out claims or secure coverages through the reinsurance market. They usually have members throughout the country. Risk retention groups are self-insurance vehicles, set up by federal legislation in 1981 to address the prohibition by most states of groups banding together to buy liability coverage. Risk retention groups may not be subject to state laws as are most pools. Some pools are just set up as purchasing groups, usually offering several lines of coverages, such as auto and general liability. Some are created to address just one risk, such as workers’ comp.
Genesis Ltd., which is celebrating its 27th anniversary this year, is one of the older higher-education pools. A group of blue-ribbon colleges and universities, it’s domiciled in Bermuda as a Class-3 reinsurance company and offers its 16 members, all shareholders of the corporation, general liability products and automobile liability. (See chart below). At one point it also offered property and workers’ comp but deleted those services early on. Due to the power of group purchasing, which puts the pool into a better negotiating position, “we get extremely competitive pricing,” says Marsh’s Fell, who’s also the administrator for Genesis. As with most pools, premium income is invested, and any surplus funds that aren’t earmarked for claims are returned to the members in the form of dividends.
Fell points out that, because of the nature of the pool, which includes professional schools and other specific departments and risks, policies purchased are crafted for the universities and aren’t “off the shelf.” Thus, Genesis enjoys a 15 percent to 50 percent savings on its coverages and 50 percent off the list price of its environmental insurance.
“It’s like retail pricing,” says Fell, something akin to paying T.J. Maxx prices instead of Saks Fifth Avenue prices for the same designer clothing. “Carriers like to write a lot of risk at once because it’s more cost-efficient and the acquisition costs are less,” he says. He points out that Genesis is a desirable account too. “It all adds up to a healthy long-term business relationship and cost-effective risk transfer.”
But not all risks are created equal, nor are they all easily identified. As enterprise risk management, or ERM, has swept the corporate landscape, how to deal with ERM is probably the newest development colleges and universities are confronting these days.
`Do I Look Like A Chauffeur?’ - automobile insurance for car pooling - Brief Article - Statistical Data Included
In most cases, your liability coverage will protect you if you cause an accident while driving the car pool. But in rare instances, car-pool driving isn’t covered by your regular insurance policy. Instead, it’s considered business use of your car–especially if you receive gas money or a small fee for the service. In that case, you may need extra coverage, says Madelyn Flannagan, vice-president of research and education for the Independent Insurance Agents of America. The rules vary by company and may depend on where you live; ask your agent or company if you’re okay.
Even if your policy covers car pooling, you may want to beef up the medical-payments coverage. This coverage, which pays for injuries to you and your passengers no matter who is at fault, can speed up payments in a situation in which there is a dispute over accident liability. Donald Beery, an independent insurance agent in New Orleans, recommends that parents who carpool frequently boost their coverage from the standard $2,000 to $5,000 per person. That typically adds $20 to $50 to an annual premium. This coverage would also kick in if someone were injured getting into or out of your car.
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If you’re carpooling children as part of a home-based day-care business, or if you lend your van for team outings and somebody else drives, be sure to tell your company or agent. And make sure that you have an adequate number of child seats and seat belts to protect the children–and protect yourself against liability.
`Do I Look Like A Chauffeur?’ - automobile insurance for car pooling - Brief Article - Statistical Data Included
In most cases, your liability coverage will protect you if you cause an accident while driving the car pool. But in rare instances, car-pool driving isn’t covered by your regular insurance policy. Instead, it’s considered business use of your car–especially if you receive gas money or a small fee for the service. In that case, you may need extra coverage, says Madelyn Flannagan, vice-president of research and education for the Independent Insurance Agents of America. The rules vary by company and may depend on where you live; ask your agent or company if you’re okay.
Even if your policy covers car pooling, you may want to beef up the medical-payments coverage. This coverage, which pays for injuries to you and your passengers no matter who is at fault, can speed up payments in a situation in which there is a dispute over accident liability. Donald Beery, an independent insurance agent in New Orleans, recommends that parents who carpool frequently boost their coverage from the standard $2,000 to $5,000 per person. That typically adds $20 to $50 to an annual premium. This coverage would also kick in if someone were injured getting into or out of your car.
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If you’re carpooling children as part of a home-based day-care business, or if you lend your van for team outings and somebody else drives, be sure to tell your company or agent. And make sure that you have an adequate number of child seats and seat belts to protect the children–and protect yourself against liability.
Take cover: no need to panicâ€â€we’ve got tips to help you cut your car insurance costs
IS YOUR company’s vehicle insurance too high? The Insurance Information Institute reports rates are declining in some states, but medical costs are rising. Meanwhile, a recent National Highway Transportation Safety Administration survey reveals many drivers aren’t aware that their coverage is insufficient until after an accident. Here’s how you can reduce insurance costs:
* CHECK YOUR STATE’S DEPARTMENT OF INSURANCE FOR MINIMUM INSURANCE REQUIREMENTS. Check out www.ican2000.com/state.html for basic rate comparison surveys.
* WITH YOUR EMPLOYEES’ WRITTEN PERMISSION, ask your local Department of Motor Vehicles for driving records if you insure drivers. Poor driving records mean higher insurance costs.
* STRESS THAT IF EMPLOYEES BREAK THE LAW–by speeding, for example–their actions can raise rates or cause lawsuits, putting your business in jeopardy.
* COMPARISON SHOP ON WEBSITES such as www.carsdirect.com and www.kbb.com. Use their on-screen calculators for free quotes. Be aware, however, that most sites work with specific insurance companies. If you use an insurance broker, ask if he’s an agent for an insurance company. Not all brokers will direct you to the best deals unless they represent them.
* CHECK FOR DISCOUNTS on safety equipment such as extra airbags, backup warning systems and theft alarms.
* IF YOUR SALESPEOPLE USE THEIR OWN CARS on business and you reimburse them for mileage, encourage them to add rental insurance to their personal policies–and reimburse them for the average annual premium of $25 as well. This preventive measure is less expensive than paying $300 to $500 a week for a replacement rental.
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* PICK THE HIGHEST DEDUCTIBLES you can afford to keep the rates low. Buy as much liability as possible to protect your assets if you are sued. On older cars, consider lowering or dropping collision coverage.
* FOR MORE ADVICE, check out www.iii.org, www.insurance.com and www.wiserdrivers.com.
Editor and consultant JILL AMADIO has been reporting on the automotive industry for 26 years.
Take cover: no need to panicâ€â€we’ve got tips to help you cut your car insurance costs
IS YOUR company’s vehicle insurance too high? The Insurance Information Institute reports rates are declining in some states, but medical costs are rising. Meanwhile, a recent National Highway Transportation Safety Administration survey reveals many drivers aren’t aware that their coverage is insufficient until after an accident. Here’s how you can reduce insurance costs:
* CHECK YOUR STATE’S DEPARTMENT OF INSURANCE FOR MINIMUM INSURANCE REQUIREMENTS. Check out www.ican2000.com/state.html for basic rate comparison surveys.
* WITH YOUR EMPLOYEES’ WRITTEN PERMISSION, ask your local Department of Motor Vehicles for driving records if you insure drivers. Poor driving records mean higher insurance costs.
* STRESS THAT IF EMPLOYEES BREAK THE LAW–by speeding, for example–their actions can raise rates or cause lawsuits, putting your business in jeopardy.
* COMPARISON SHOP ON WEBSITES such as www.carsdirect.com and www.kbb.com. Use their on-screen calculators for free quotes. Be aware, however, that most sites work with specific insurance companies. If you use an insurance broker, ask if he’s an agent for an insurance company. Not all brokers will direct you to the best deals unless they represent them.
* CHECK FOR DISCOUNTS on safety equipment such as extra airbags, backup warning systems and theft alarms.
* IF YOUR SALESPEOPLE USE THEIR OWN CARS on business and you reimburse them for mileage, encourage them to add rental insurance to their personal policies–and reimburse them for the average annual premium of $25 as well. This preventive measure is less expensive than paying $300 to $500 a week for a replacement rental.
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* PICK THE HIGHEST DEDUCTIBLES you can afford to keep the rates low. Buy as much liability as possible to protect your assets if you are sued. On older cars, consider lowering or dropping collision coverage.
* FOR MORE ADVICE, check out www.iii.org, www.insurance.com and www.wiserdrivers.com.
Editor and consultant JILL AMADIO has been reporting on the automotive industry for 26 years.