Year: 2017

Auto insurance and those summer trips

Come the fall, the retired and monied folk who live in the northern regions look up in the sky and see birds getting ready to fly south. Like these snowbirds, they also seek leisure time where it’s warmer and drive or fly down to Arizona, Southern California, Florida and Texas. The same lifestyle itch affects most people as the summer months come along. This is also the time to hit the road and find somewhere by sea or lake, mountain or valley for a little rest and relaxation. But, before you set off, there are a few basic precautions to take. It starts with the vehicles. Hopefully, you had everything ready for the winter. You prepared for freezing weather with carburetor settings and the addition of antifreeze to the cooling system. Now comes the time to change the set-up for summer driving. As the temperature rises, there’s more of a chance of leaks so check the clips and hoses, make sure the belts are tight and the fluid levels are topped up. How are the tires? If you’re suddenly going to take off down the interstate at higher speed than usual, you want to avoid a blow-out. With the cost of gas still edging up toward the $4 per gallon, you want the engine running lean and change your own driving styles to a more even tempo. Less aggressive acceleration and braking saves gallons over longer distances.

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Now let’s come to the insurance policy. You can plan your road trip for months but, if things go wrong, there can be a mass of unexpected bills to pay. The first step is to make sure your policy covers you for out-of-state driving. Now assume you are stuck. What might you need? It could be something simple like a helpful mechanic to jump start the vehicle when the battery has run down or to deliver fluids to temporarily solve a problem of overheating. Even more annoying, suppose you locked yourself out of the vehicle. Solving any one of these problems involves a basic callout fee plus expenses plus an hourly rate plus the cost of any materials supplied. Then what do you do while waiting for essential repairs. Did you budget for overnight accommodation? Can you afford a rental replacement while the repairs are done?

There are a range of additions to the standard auto insurance policy that cover interruptions to your journey. But be careful what you buy. Some policies require you to be at least one-hundred miles from home or have other conditions to fulfill before you can claim. Then look at the amount of the cover. Most pay expenses up to $1,000 for the cost of essential repairs, accommodation and food. Are you feeling unlucky? More importantly, watch out for the anti-fraud conditions. Some policies ask whether the problem is one you should have fixed before you set out. It’s not unknown for dishonest drivers to try claiming the cost of routine maintenance as emergency repairs while on holiday.

Just as your vehicle could do with a tune-up before you set off, so your online auto insurance policy should be reviewed to ensure you have the right terms and reasonable limits on the amount you can claim.

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Auto insurance quotes and young drivers

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It makes no difference what the activity, when you’re learning something, you make mistakes. On the football field, it makes no difference if you crash into other players. You’re all players together and no innocent members of the public are at risk. But if you apply the same approach to driving, there can be a lot of innocent victims. So insurance companies group all inexperienced drivers together. The younger the driver, the higher the premium. But, as time passes, and you build up a track record of safe driving, the rate comes down. There’s a general policy to review your safety record on a regular basis between 17 and 29. In general, all drivers under the age of 25 pay the highest rates but, assuming no accidents, the rates will slowly scale down. Single males are judged the most dangerous. The statistics show young female drivers are significantly safer.

The rates come down faster if you marry and have children. Now as the owners of vehicles likely to be carrying your family, you are assumed to have a safer approach to driving. Even if you don’t marry, you still earn a lower rate if you’re the owner of the vehicle. It’s assumed you’ll drive your own vehicle more carefully. This leads to a more general point. If parents insure their children, they pay the penalty if there are accidents or convictions. Premium rates are likely to triple or cover may be refused if underage children are caught driving while intoxicated. The same can apply if they are caught for underage drinking even while not driving. The parents are likely to face nonstandard rates or surcharges. Perhaps curiously, DWI/DUI convictions can also affect other home-based policies like those covering a jetboat or snowmobile. These higher rates will stay in place until the child leaves the home and will no longer be a driver of the family cars. This makes it better to encourage younger drivers to take out a policy in their own names. The sooner they learn the cause and effect of financial responsibility the better.

Remember that, in many states, there’s an open records law and many convictions by young people are not considered confidential. The states will disclose anything relevant to an insurance company on request. So whether the application for insurance is made by the parents or the children, the fact of convictions is likely already known. If you find it difficult to find coverage, many states also operate a program to support high-risk drivers. If you are being refused, apply to the local office of the Insurance Commissioner and you’ll be assigned to a local insurer. Because this is a “forced” insurance, the insurer will usually charge a top rate but some cover is better than no cover. If you manage to go several years without a claim, you should shop around. Get online auto insurance quotes from as many different insurers as possible. As soon as you start receiving quotes and the rates are falling to more reasonable levels, your rehabilitation is complete and you can apply for regular cover. As with all services where there’s competition, auto insurance for younger drivers is available at lower premium rates if you look around and talk to as many agents as possible.

Auto insurance quotes when your vehicle is totaled

The insurance industry is run by honest and trustworthy people who only want to help the community get through its troubles with the least trouble. So, when you make a claim, the first question is whether it’s economic to repair your vehicle. The maximum amount you can claim under the policy is the fair market value of your vehicle. This is the price a buyer would be prepared to pay for your vehicle in the open market. Who is this buyer? This is a person who is interested in buying a vehicle, but he or she is not desperate. So the assumption is this buyer is shopping around and can afford to wait while negotiating the best price on a number of possible purchases. This means you are always looking to value your vehicle “as is”. This is not a hypothetical value. If it’s poorly maintained and the paintwork could do with touching up, you will get a low valuation. Equally, a beautifully maintained example of the make and model will command a high price. Note, loading up the car with customized features is not going to help the resale value. There’s more to breakdown and go out of fashion. Only have the most popular extras fitted. There are a number of reference guides like the Kelley Blue Book that offer prices and advice.

You’ll be pleased to know the average vehicle loses 65% of its value over the first five years of ownership. This means it’s nearly always uneconomic to repair older vehicles. The cost of labor is high and spares can be equally expensive. So unless you were very careful in choosing the vehicle and have maintained it well, even apparently minor damage can mean you lose the vehicle for a smaller cash sum than you were expecting. If you have doubts, do some research based on the reference guides and then talk it through with the claims adjuster.

What happens to the vehicle when it’s totaled? Well, the insurance company has bought it and can do whatever it likes with it. In most cases, the car will be sold on to a scrap yard where it’s broken for spares. Most insurers label the Vehicle Identification Number in the National Motor Vehicle Information System. That way, if you are tempted to buy a used car, you can check the VIN and make sure it’s never been totaled. Why take the trouble?

There are new reports out of the southern states where there’s been significant flooding over the last year. It seems a lot of vehicles that were totaled because of flood damage have been reappearing on the roads. After all, the main damage is going to be to the electronics, brakes and the airbags. Simple cleaning of the interior can suggest everything is in apple-pie order. So never buy secondhand without first checking the NMVIS whether the VIN has been tagged. Otherwise there’s a real risk your beautiful vehicle will rot from the inside out while the online auto insurance quotes assume it’s in good condition. This is one of those times when the auto insurance industry actually does something useful. The NMVIS is a fee-for-service organization with the range being $2 to $7 per report. It doesn’t cost much to be safe.