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Auto Insurance

Do You Need Different Auto Insurance If You Lease Your Car

By | Auto Insurance | No Comments

Admit it. We all love new cars. And not just for the convenience. But also the glam that comes with them.

Sadly, there’s that one significant downside- costs.

Of course, dealerships will always scream that they have the best prices in town. And might even introduce you to a couple of models on special sale prices.

But overall, you still have to dig deep into your pockets. Buying a new car is not an easy feat, to say the least. And that alone complicates everything, especially if you need one urgently and on a temporary basis.

Well, at least not entirely. It’s still possible to get a new car without actually buying one.

By now, I assume that you’ve heard about car leasing. It has been the magical option for decades now. Came quite handy when you needed a vehicle only for a limited period of time.

However, going by recent trends, leasing has morphed into a different thing altogether. It’s not just for travelers and temporary drivers anymore.

Everyone is going for it. In the past five years alone, car leasing volume has increased astronomically by 91%.

Source: Edmunds

Millennials are particularly fond of this option. Of the lot that got new vehicles in 2016, at least 31% of them did it through leasing.

Source: Edmunds

What’s the catch? For starters, its way cheaper than actually purchasing a new car. Including when you alternatively choose to buy your car through financing on monthly payments.

Here’s the interesting bit. On average, car buyers are now paying about $120 more a month than their leasing counterparts.

Let’s be honest. It has something to do with the fact that financiers are in for the long ball when it comes to profits.

To be fair, however, leasing also has its sets of problems. With the principal one being lack of adequate information about the whole concept.

Most of what we see are marketing campaigns by leasing dealerships. No one likes going into those finer details because they might spoil the party.

Insurance, for instance, is rarely mentioned by anyone. Even the State of Michigan hardly delves into the subject.

If you’ve been following this blog, you know that auto insurance is compulsory. And not just in Michigan, but also the rest of the country. What varies, however, are the actual policies.

But, it’s mostly only associated with cars that have been bought.

And that begs the question. Do you need different auto insurance if you lease a car?
Well, your car lease dealership has probably introduced you to this thing they call lease insurance. And even told that you that it’s compulsory.

Here’s the hard truth. It turns out they are right.

That means you should go ahead and mark the lease insurance checkbox on the form, right?

Now, hold it right there.

That’s where they go wrong. They may be right about one thing, but there’s a lot they haven’t told you.

Thankfully, we have your back. We’ll cover the most critical aspects of lease insurance. And then tell you why you shouldn’t rush to accept your dealer’s offer.
So let’s dive in and look at the basics first.

What is Lease Insurance?

Going by information published by Michigan State Police, more than half a million vehicles were involved in road crashes last year. And no specific type or model was spared.

Passenger cars, SUVs, and Vans led the list with a combined figure of slightly over 400,000. Pickup trucks come second, then small trucks at a distant third.

You might assume that it all ends there. But surprisingly, even vehicles like motorhomes, snowmobiles, and ATVs were part of the drama.

And sadly, it didn’t end so well for some of the occupants. 1,733 of the crashes were fatal, while 109,682 ended in injuries. Overall, more than 433,157 of the vehicles also caused property damage.

Source: Michigan

The point? Evidently, no vehicle is safe from a traffic crash and potential carnage. Including leased vehicles. And the State of Michigan knows this all too well.

As a result, no one is exempted from the compulsory no-fault insurance. That usually forms the first part of lease insurance. It comes with:

● Personal Injury Protection: This coverage grants you full reimbursement for medical expenses incurred as a result of a traffic crash. The insurance provider also caters for attendant care and pays a fraction of the lost income.

● Property Protection Insurance: If you end up crashing and damaging property or other stationary vehicles, this is the coverage you fall back on. It only applies to incidences within the state of Michigan.

● Property Damage: This is pretty similar to Property Protection Insurance. The only difference is the fact that it fundamentally applies to incidences outside the state of Michigan.

● Residual Bodily Injury Liability: This is applicable to traffic crashes that cause third-party injuries. The insurance company takes care of the resultant medical expenses.

But what happens when the car you’ve leased is owned by someone already covered? Wouldn’t that be good enough?

According to the Department of Insurance and Financial Services, you’re considered the owner of a vehicle if you lease it for more than 30 days. That essentially makes it compulsory to purchase this insurance of the lease period stretches past one month.

Come to think of it, the insurance is reasonably fair for parties involved. Quite a solid set of coverage there, to be honest.

But take another look. Assess it much deeper this time. Notice anything missing?
One prominent party has been left out. The dealership or individual that actually owns the car you’ve leased.

The state makes no mention of any coverage for the vehicle you’re driving in the event of a road crash. As far as they’re concerned, you can even wrap it and send it to the moon. All they care about, apart from your health, is reimbursing third parties.

So, do the actual vehicle owners stand a chance of losing their investment?
Well, that forms the second part of lease insurance. It basically protects the car owners from potential loss of their vehicle.

All factors considered, they actually face more risks than you. A crash is only one part of the potential problems. They could still lose their vehicle through theft, fire or natural disasters.

To make matters worse, cases of vehicle theft in the U.S have been increasing since 2014. After trending downward for 25 years. Are thieves getting smarter?

Source: Statista

According to FBI’s Uniform Crime Report, thugs made away with 765, 484 vehicles in 2016. Translates to 239.6 cars for every 100,000 people. A disappointing 6.6% rise compared to the previous year.

Source: FBI

And since today’s cars cost more than previous models, these cases translate to significant financial losses. In actual figures, Americans lost about $5.9 billion in 2016 alone.

Now, review this really critically. Not as leaser. But rather as a car owner.

Well, you’re dead right. Your leased car’s owners want none of this. That’s why in addition to no-fault insurance, you’ll also be required to get comprehensive auto insurance.

Collectively, they make up a typical lease car insurance.

So, does it operate within the same framework as regular auto insurance?
No. Not quite exactly. There are certain crucial elements that you should always remember.

Important Facts About Lease Car Insurance

● It Might Cost More Than Regular Auto Insurance

Admittedly, leasing has been attractive because of its comparatively low costs. But sadly, it’s not a fairy tale bed of roses. And lease insurance cost is the culprit here.

As we’ve discussed, you’ll have to take insurance against two levels or risks. The no-fault insurance applies to you as the driver, while comprehensive insurance protects the car owners.

Sounds good to some extent. But quite a different tale when it’s all translated to actual costs. Especially when you consider the fact that auto insurance rates have increased by 20% since 2011.

Source: Zebra

● There Are Still Ways To Save on Lease Insurance
Paying more for lease insurance is one thing in other states. Like North Carolina, where the average auto insurance rate is a paltry $865.

Now, when we cross over to Michigan, it becomes quite a hard pill to swallow. We’re already the highest in the nation, paying an average of $2,610 for auto insurance.

Source: Zebra

Things are even worse in some of the cities. Detroit drivers, for instance, are paying $5,414, on average.

So, of course, it’s understandable to feel helpless when you learn that lease insurance might even be costlier than regular auto insurance.

Fortunately, there are ways to reduce your overall premiums. Several, as a matter of fact.

But, they are not universally applicable. Plus they don’t come easy at all.

You see, each dealership has its unique lease terms. And insurance providers, similarly, have their own unique offerings with varying policies and corresponding discount rates.

Securing a good rate, therefore, requires extensive shopping. And most importantly, working with a reputable independent insurance agency. They know where to mine for the most suitable discounts.

● The Rental Car Dealer Is Not Always Right

And now back to our issue with the rental car dealer.

There are many issues that dealers are quite conversant with. But insurance is certainly not one of them.

The one you’re dealing with might attempt to include the lease insurance as part of the whole lease agreement. Of course, it might seem like a convenient package. But, don’t entertain the idea of signing it.

Odds are the dealer could be making some commission off your insurance premiums.

Although they are correlated, leasing a vehicle and purchasing lease insurance are two different things. Treat them as separate entities. They should never get mixed up.

A good approach would be negotiating with different rental companies on their rates. Then engaging an independent insurance agency when it comes to the corresponding insurance.

Conclusion

To recap:
● Leasing has morphed into a different thing altogether. It’s not just for travelers and temporary drivers anymore.

● In the past five years alone, car leasing volume has increased astronomically by 91%.

● Millennials are particularly fond of this option. Of the lot that got new vehicles in 2016, at least 31% of them did it through leasing.

● On average, car buyers are now paying about $120 more a month than their leasing counterparts.

● Going by information published by Michigan State Police, more than half a million vehicles were involved in road crashes last year. And no specific type or model was spared.

● No one is exempted from the compulsory no-fault insurance. That usually forms the first part of lease insurance.

● According to the Department of Insurance and Financial Services, you’re considered the owner of a vehicle if you lease it for more than 30 days.

● All factors considered, lease car owners actually face more risks than you. A crash is only one part of the potential problems. They could still lose their vehicle through theft, fire or natural disasters.

● Cases of vehicle theft in the U.S have been increasing since 2014. After trending downward for 25 years.

● According to FBI’s Uniform Crime Report, thugs made away with 765, 484 vehicles in 2016. Translates to 239.6 cars for every 100,000 people. A disappointing 6.6% rise compared to the previous year.

● You’ll have to take insurance against two levels or risks. The no-fault insurance applies to you as the driver, while comprehensive insurance protects the car owners.

● There are ways to reduce your overall premiums. Several, as a matter of fact.

● There are many issues that dealers are quite conversant with. But insurance is certainly not one of them.

That said, what kind of insurance did your dealer make you get for your vehicle?

AAA Insurance

AAA Auto Insurance Review

By | Auto Insurance | No Comments

You’ve just added a new car to your fleet, and the business is finally looking up. Quite a significant achievement there, to say the least.

But, while a vehicle is a great asset if leveraged for profit, it can also be a source of multiple liabilities.

Imagine getting paid $1,000 to deliver goods worth $20,000 only to end up causing a major road accident down the highway. Such an incident could end up with irreparable damages on the goods, plus extensive structural and engine destructions affecting all the vehicles involved.

If you’re lucky, the driver might walk away unscathed. And possibly only incur costs for repairing your vehicle.

Otherwise, you risk liabilities for not only the goods in transit but also third-party vehicles and their corresponding occupants.

Thankfully, no fault coverage is one of the legal requirements for all drivers in Michigan. Hence the consequent average rate of $2,394, which is ranked highest in the country.

Seems quite solid when you read through Michigan’s laws. But strangely, this is where things get a bit interesting.

Your insurance company’s agents might smell your inexperience from a mile away. Then capitalize on it by quoting a premium that’s way higher than that state average. And that would only cover basic legal insurance.

If they beat you at the negotiating table, you might end up paying that premium for quite some time. And just when you assumed that such a high figure would guarantee optimal protection, an accident proves otherwise.

A small technicality ends up disqualifying you from possible compensation. It might seem unfair, but that’s how capitalism works.

That’s why it’s critically important to be extremely analytical when choosing an insurance company. Fortunately, Michigan is a comparatively extensive market, with multiple insurance providers offering varying coverage at different price ranges.

One of the most prominent companies right off the bat is AAA Auto Insurance.
So, what is it all about?

Overview

AAA Auto Insurance is well-known for a good reason.

To begin with, it’s more than a century old. Well, not technically as an insurance provider. It only started out as a lobbying body in 1902.

At that time, it was known as the “American Automobile Association”. It essentially provided automobile services to improve overall road safety.

As a matter of fact, AAA went ahead an established a school safety program 18 years later. Consequently making it a pioneer in running driver safety programs.

Auto traffic in America was, of course, considerably low at that time compared to modern trends. But road safety was still a fundamental concern. Especially since car safety features were not that developed.

Source: AAA

AAA continued spearheading safety campaigns until 1947. It then achieved yet another milestone. And ended up establishing the AAA Foundation for Traffic Safety.

It continued diversifying its services throughout the century. All fundamentally aligned to traffic safety.

This long history ultimately won the association the U.S Transportation Department distinction. Basically as Clinton administration’s principal road safety partner in 1998.

Currently, AAA is not just a roadside assistance organization. It is made of 51 autonomous clubs. All specializing in a wide range of services.

In addition to roadside assistance, some of the chief ones include auto insurance, financial services and travel planning, just to name a few.

This has seen it attract more than 50 million members across a wide range of states, including Michigan.

So, what insurance products does it offer for Michigan residents?

Types of Coverage Provided AAA Auto Insurance

There are over 8 million private and commercial vehicles in Michigan. Consequently translating to a wide pool of drivers. To position itself competitively against other insurance providers, AAA Auto Insurance attempts to cater adequately to this extensive market.

Source: Statista

It provides a wide range of coverage tailored to varying needs and possible liabilities. The primary ones include:

● No Fault Coverage: This is a compulsory requirement according to Michigan Law. It’s a Personal Injury Protection insurance that caters for any medical bills incurred by your car’s occupants. It applies to all accident situations, regardless of the party at fault.

● Underinsured/Uninsured Motorist Coverage: 20.3% of the drivers in Michigan are uninsured. If any of them causes an accident, this coverage qualifies you for compensation for personal injuries and vehicular damages.

● Comprehensive Coverage: Applies to car damages caused by non-collision incidents. For example natural calamities and weather factors.

● Collision Coverage: Applies to vehicular damages caused by a road accident.

● Bodily Injury and Property Damage Liability: Pays medical bills and car damage costs of third parties when you’re at fault in an accident.

Then there’s a rather comparatively unpopular set of auto insurance offerings. They are only applicable to special circumstances:

● Pet Coverage: Caters for your pet’s medical bills in case of a road accident

● Non-owners Insurance: If your car is driven by individuals who don’t own vehicles, this should cover their resultant liabilities.

● Rental Car Coverage: Covers corresponding liabilities when you rent a car.

● Rental Car Reimbursement Coverage: Provides you with a rental car while the company works on your vehicle after an accident.

● Gap Insurance: This applies to individuals who lease vehicles or have outstanding auto loans. If the car is totaled, this compensates the cost difference between replacement and the outstanding lease or loan balance.

AAA Auto Insurance Locations

AAA Auto Insurance has firmly secured its position in Michigan. It operates through tens of AAA branches distributed evenly throughout the state.

Source: Google Maps

To find the closest branch, simply visit its Michigan site and enter your ZIP code. Various offices will be subsequently listed according to distance.

AAA Auto Insurance Features

AAA Auto Insurance, unfortunately, is an exclusive service only open to AAA Members. This requires you to apply for either of the three membership programs to be eligible.

While Classic membership costs $52 in Michigan, Plus goes for $87, while Premier will set you back $117. These, of course, might seem like added fees at first. But they are all worthwhile when you consider the extra services.

The basic element that sets this company from the rest is the fact that it’s not just an insurance provider. If anything, insurance is barely a component of its services.

AAA is essentially a holistic organization that provides a comprehensive set of services critical to road safety. That’s pretty much how it has managed to grow from 1500 to 50 million members.

Therefore, as a member with auto insurance, you also qualify for exclusive benefits including:

● Roadside Assistance: The membership programs come with varying levels of roadside assistance services like fuel delivery, towing, battery boost and tire change. They are all offered round-the-clock.

● Deals and Discounts: You qualify for deals on discounts on a wide range of facilities associated with AAA. They range from basic travelling amenities like car rentals and hotels. Plus gadgets like cell phones and eyeglasses.

● Trip Planning: You’re granted access to a wide range of travel guides travel guides that assist in planning trips. As a result, you get detailed maps to find essential amenities like gas stations, restaurants and hotels.

AAA Auto Insurance Pricing and Discounts

Because of the extra services, the popular assumption has always placed AAA auto insurance on the costly end. But, surprisingly, the provider has always maintained considerably competitive insurance quotes.

While the pricing of individual coverage differs by state, AAA has managed to hold on to the strategically competitive cost trend across all the regions.

Basically, AAA auto insurance might not have the absolute cheapest premiums. But it also doesn’t come close to the most expensive auto insurance quotes.

When various parameters are reviewed, the provider continues to maintain below-average pricing both monthly and annually. All ranking considerably well against its major competitors.

Source: ValuePenguin

And that’s not all. You can still lower your premiums further. By taking advantage of a wide range of possible discounts.

This should be especially easy to achieve if you consult a well-informed independent agent. One with an exceptionally good analytical eye for detail.

The discounts include:

Student Away From Home: Entitles you to up to 15% discount if a young driver schools at least 100 miles from home. But goes to school without the vehicle.

Good Students: Reduces the premium by up to 15% for good school grades by a young driver.

Paid in Full: Applies 5% discount when you clear the entire auto insurance premium.

Advance Purchase: Reduces overall cost by 5% after paying for the policy at least a week before your current policy lapses.

Longevity: Qualifies you for a discount of up to 12% if you’ve been with your previous auto insurance provider continuously for 36 or more months.

Low Mileage Discount: Reduces your premium by up to 12% when low mileage has been verified on your car.

Association with Professional Groups: Applies a discount of up to 10% when you have connections with professional or affinity groups.

AAA Auto Insurance Claims

Filing a claim with AAA auto insurance is pretty simple and straightforward. The process begins online. And it’s always advisable to first seek help from an independent insurance agency.

After accessing your AAA club’s website, proceed to the Insurance drop-down menu and click on Make an auto insurance claim. Then enter all relevant details including incident particulars, car specifications and personal details.

The insurance company will finally get in touch with you through the contact information given.

AAA Auto Insurance Customer Experience

While online customer reviews can be good indicators of the expected experience, they have a major downside.

An overwhelming majority of customers don’t bother to document their experiences. And those that do are only compelled by unpleasant experiences.

That said, it’s worth noting that AAA Auto Insurance has attracted its fair share of poor reviews. And even more positive reviews in not only Michigan but also other states.

This has seen it get an above-average rating of 0.55 from the National Association of Insurance Commissioners. A.M Best Insurance Rating, on the other hand, awards the provider a rating of “A+”.

Only a minority of customers have expressed concern over the complicated process of cancelling policies. Others have complained about increasing premiums. But this is a phenomenon we’ve previously established as an industry standard.

The rest of the policyholders continue to praise it for timely roadside assistance and a stress-free claim process. It’s a financially stable company that continues to honor its customers’ claim demands.

Bottom Line

AAA Auto Insurance might not be the cheapest insurance provider on average. But it comes with a whole lot more than basic insurance.

Definitely a good option to consider if you fancy an all-rounded club. Plus, it reportedly continues to honor its customers’ insurance claims.

All in all, it’s still possible to secure all these benefits at a substantially lower price. All you need is to strategically raise your negotiation stakes by working with an independent insurance agency.

A reputable one with experienced professionals will not only show you how to capitalize on membership deals. They will also promptly identify all the discounts you’d be eligible for.

And, of course, they will assist you to effectually compare AAA Auto insurance with other possible options.

Conclusion

● No fault coverage is one of the legal requirements for all drivers in Michigan.

● It’s critically important to be extremely analytical when choosing an insurance company.

● AAA only started out as a lobbying body in 1902. At that time, it was known as the “American Automobile Association”.

● AAA Auto Insurance has more than 50 million members across a wide range of states, including Michigan.

● AAA Auto Insurance provides a wide range of coverage tailored to varying needs and possible liabilities.

● The company operates through tens of AAA branches distributed evenly throughout the state.

● AAA is essentially a holistic organization that provides a comprehensive set of services critical to road safety.

● When various parameters are reviewed, the provider continues to maintain below-average pricing both monthly and annually. All ranking considerably well against its major competitors.

● AAA Auto Insurance gets an above-average rating of 0.55 from the National Association of Insurance Commissioners. A.M Best Insurance Rating, on the other hand, awards the provider a rating of “A+”.

● AAA Auto Insurance might not be the cheapest insurance provider on average. But it comes with a whole lot more than basic insurance.

And now for the big question. How does this company compare with your current insurance provider? Do you like your current choice? Why?

What Is Full Coverage Auto Insurance

By | Auto Insurance | 2 Comments

You’ve just acquired a brand spanking new car, and your life now almost feels surreal. Everything about it is just perfect, and you couldn’t be prouder of yourself.

Of course, you can’t wait to take it out for a ride on Michigan’s roads. Because nothing is as exciting as cruising down the highway while listening to music and enjoying that new car smell.

Well, congrats. It’s definitely an admirable achievement. The stuff of dreams. At least it seems like one. But unfortunately, you’re not there yet, because of one major caveat- traffic risks.

In 2017 alone, Michigan saw 314,921 road crash incidents, 937 of which were fatal. 57,263 of the cases resulted in some form of bodily injury, while 256,721 caused property damage. All in all, 78,394 individuals were injured, and 1,028 were not fortunate enough to make it out alive.

Source: Michigan

You might be the keenest and most careful driver in the state. We’ll give you that. But if you review information compiled by the State of Michigan, there are numerous causes behind these crashes.

They range from the obvious like “overspeeding” and “reckless driving”, to the least expected like “failure to yield”.

Source: Michigan

Essentially, even when you’re super careful, another road user might trigger an accident. It’s a wild world out there in the streets.

That’s why Michigan State legislation requires each driver to purchase liability insurance. To essentially cater for possible resultant injuries and property damage.
Unfortunately, road crashes are barely a fraction of the risks your new car faces. Even if it successfully survives the crazy traffic jungle, there are numerous other things to worry about.

Thugs might spot it right when they are looking out for that specific model. And you know there’s nothing as irresistible as a new car, especially when it comes to grand theft auto.

Of course, you might try to secure it accordingly. But Michigan, in recent years, has proven to be the Wild West of motor vehicle theft. We don’t deal with amateurs anymore. Only professionals.

When car makers introduce new security features, the thieves have always found ways around them. That’s how they were able to steal close to 20,000 vehicles in 2016. And surprisingly, most of them vanished completely since only 49% were recovered.

Source: State of Michigan

Sadly, that’s not all. If you avoid road crashes, and potential thieves fail to notice your car, nature might still get it. A tree might fall on it during a storm, or a technical hitch might ignite a fire.

Principally, whichever way you look at it, there are risks everywhere. That’s why auto insurance is critically important.

The broader the coverage in your policy, the more you’ll be protected from these risks. Although such optional policies are usually costlier than standard compulsory insurance, cautious vehicle owners have always gone for them.

Hence the full coverage auto insurance. But what exactly is this? And is it even suitable for vehicle owners in Michigan?

Debunking The Full Coverage Auto Insurance Myth

You’ve probably seen auto insurance providers marketing numerous different kinds of coverage. Each is priced separately, addressing a specific risk.

So, of course, it might make sense that the same companies would also consider bundling them into one special buffet policy. At least to cater to customers who might be seeking to simply protect themselves from all possible auto-related risks. Hence the all-too-common term, “full coverage auto insurance”.

But let’s get something clear right off the bat. Technically, there’s actually no such thing as full coverage in the motor insurance circles.

You might have heard other car owners and probably a couple of insurance agents throw the term around. But you can’t walk into an insurance company and request to purchase a full coverage policy. It simply doesn’t exist. At least officially.

Wait a minute. Does this mean that insurance providers do not allow bundling of multiple types of coverage in one policy?

The insurance industry would actually be dead if this was the case. As a business, an insurance company will even encourage you to acquire additional coverage. The more the bundling, the higher the subsequent profits.

So the concept does apply to the entire industry. The only thing that is technically inexistent is “full coverage auto insurance” as an official policy name.

The thing is, as an unofficial term, the definition can vary significantly depending on who you’re dealing with. The industry is pretty extensive, with numerous companies offering varying auto insurance coverage.

That said, there are specific kinds of coverage that are typically accepted widely as core components of full coverage insurance. If you suggest that you’d like to protect yourself fully, then chances are your agent might suggest the following:

What ‘Full’ Coverage Auto Insurance Entails

An insurance coverage that provides full protection should have at least two primary parts. One that addresses general liabilities, and another for comprehensive benefits.

● First Part: Liability Insurance

Liability insurance, as we’ve previously discussed, covers damages resulting from road accidents. In addition to bodily injuries, it extends to physical damages on third party vehicles and property.

It’s essentially the only type of insurance that is required by law in each of the American states. Only slight details vary when you shift from one state to another.

Fortunately, Michigan has one of the most comprehensive liability insurance packages in the country. While most states only limit this to at-fault third party damages, Michigan is among the 12 states that have included personal injury protection.

Therefore, the first part of a full coverage auto insurance in Michigan should come with:

● Personal Injury Protection (PIP)

● Property Protection Insurance (PPI)

● Bodily Injury/Property Damage (Residual BI & PD)

Source: ValuePenguin

As the name suggests, Personal Injury Protection applies to first person injuries. Regardless of whether you’re at fault or not, the insurance company should take full responsibility for your injuries until you ultimately recover.

The best thing about this is the fact that you won’t be required to pay even a dime for your medical treatment. As a matter of fact, it doesn’t even have maximum limits. Whatever the extent of your injuries, there’s no ceiling on the medical amount payable.

And that’s not all. Even after catering for your bills, the insurer should also ensure that you’re comfortable by compensating for lost income.

In addition to a payout amounting to 85% of lost income, you should receive a daily household subsidy not exceeding $20 per day. In some cases, these handouts can extend for as long as 36 months after a traffic incident.

Certainly explains why Michigan has the highest average auto insurance rate in the U.S. At $2,394, it ranks ahead of second-placed Louisiana at $1,921. It even surpasses the national average of $1,318 by more than $1,000.

Source: Insure

All things considered, bodily injury is only one of the possible consequences of a road accident. That’s why Michigan’s liability insurance also includes Property Protection Insurance.

This helps you offset the costs of repairing any third party property damage you cause in a road crash. But, unlike the former, it has a limit.

Insurance companies will not pay more than $1 million per crash. But, to be fair, that’s still a significantly huge amount of money, considering the standard cost of properties usually damaged in a typical road crash.

Interestingly, it does not extend to all properties. Insurance payouts are only made for properties that were stationary at the time of impact. This disqualifies other drivers’ cars unless they were parked and immobile.

Don’t be alarmed though. The insurer won’t completely bail out if other damaged vehicles were moving.

Instead, they’ll switch to the third component of Michigan’s liability insurance- Bodily Injury and Property Damage (Residual BI/PD). This entirely addresses third-party injuries and property damage in accidents you cause.

Unlike the previous two, this coverage has stated limits you can pick from. However, you’re required to proceed with an option that provides a protection of at least $20,000 for each injured individual.

When the number of injured persons is two or more, the least expected coverage is $40,000, while $10,000 applies to property.

If affected parties are dissatisfied with the initial payout offers, the law grants them the right to sue for additional benefits. This could potentially be costly even to you, especially if your limits are comparatively low.

That’s because insurance companies will never extend past the set limits. If the court settles for a higher amount, any deficit amount after limit deduction should be paid directly by you.

● Second Part: Collision Insurance and Comprehensive Insurance

Michigan’s liability insurance is solid enough. But it’s barely comprehensive, probably to minimize legal insurance costs.

One substantial element that is prominently missing in each of the three liability coverage types is the first-person vehicle. As long as you’ve fully settled costs for third-party damages, the state doesn’t really care what you do with your car.

If it’s totaled, you might as well dump it in a wrecking yard. Or sink it in Lake Michigan.

But if you care about it, you should consider adding Collision Insurance to your full coverage auto insurance. It’s more or less like a PIP for your vehicle.

Regardless of the party that is at fault, your insurer is expected to asses and repair any damages to your car. It’s pleasantly swift because you don’t even have to wait for a payout from the other driver’s insurance provider.

Unfortunately, just like all other favorable policies, it has its downside. It’s typically the costliest auto insurance coverage, and could potentially even double your premium.

Luckily, you can mitigate this by choosing a significant deductible, which normally ranges between $50 and $2,000. The higher the deductible, the lower the subsequent premium.

So far, we’ve fully addressed possible road accident liabilities and damages. But that’s barely half the tale.

You still need protection from other risks as previously mentioned. And that’s where Comprehensive Insurance comes in.

This coverage applies to your car pretty much like collision insurance. But, instead of accidents, it only covers damages triggered by external forces. Like, for instance, vandalism, an errant object going through your windshield, or a tree falling on your car.

Thankfully, since these events are rare and avoidable, comprehensive insurance is considerably cheaper than collision insurance.

Conclusion

● In 2017 alone, Michigan saw 314,921 road crash incidents, 937 of which were fatal. 57,263 of the cases resulted in some form of bodily injury, while 256,721 caused property damage. All in all, 78,394 individuals were injured, and 1,028 were not fortunate enough to make it out alive.

● There are numerous causes behind these crashes. They range from the obvious like “overspeeding” and “reckless driving”, to the least expected like “failure to yield”.

● Thieves were able to steal close to 20,000 vehicles in 2016. And surprisingly, most of them vanished completely since only 49% were recovered.

● If you avoid road crashes, and potential thieves fail to notice your car, nature might still get it.

● Technically, there’s actually no such thing as full coverage in the motor insurance circles.

● An insurance coverage that provides full protection should have at least two primary parts. One that addresses general liabilities, and another for comprehensive benefits.

● Liability insurance, as we’ve previously discussed, covers damages resulting from road accidents. In addition to bodily injuries, it extends to physical damages on third party vehicles and property.

● The first part of a full coverage auto insurance in Michigan should come with: Personal Injury Protection (PIP), Property Protection Insurance (PPI), Bodily Injury/Property Damage (Residual BI & PD)

● Collision insurance is more or less like a PIP for your vehicle. Regardless of the party that is at fault, your insurer is expected to asses and repair any damages to your car.

● Comprehensive insurance applies to your car pretty much like collision insurance. But, instead of accidents, it only covers damages triggered by external forces.

All in all, this should be an exceedingly beneficial combination of insurance coverage. But they can only serve you well if you’re extremely keen on the selection process from the word go.

So talk to us to today and let’s help you secure the most favorable types of coverage, from the best possible insurers, at the lowest quotes in the market.

7 Actions You Should Take When New Drivers Get Their License

By | Auto Insurance | No Comments

There are two primary occasions in your motoring experience you’ll probably never forget. That time you bought your first car. And when you finally passed the driving test to get a license.

If your teen is anything like you, they must have anticipated the day at which they were eventually eligible for driving.

At 14 years and 9 months, Michigan has one of the lowest eligibility ages for learner’s permits. However, new drivers are only granted restricted licenses at 16. Then full licenses when they hit 17, which is also fairly low compared to other states.

Now, of course, a new driver in the house is pretty exciting. But it’s also just as dreadful.

Exciting because it’s exceedingly liberating to finally have someone else who can run errands with the car. Plus your days as a chauffeur are finally coming to an end.
Dreadful because it comes with additional risks and expenses.

While this is exceptionally pronounced in young teenage drivers, it also applies to much older drivers. So buckle up even when the new driver is your spouse. Or maybe an employee in your business.

But we’ll largely focus on teenage drivers because of the corresponding numbers and associated risks. Although the issuance of licenses to teenage drivers has been dropping in the recent past, the bulk of new drivers are still individuals aged 16 to 19.

Unfortunately, this comes with its set of problems. It’s common knowledge by now that teenagers are the most reckless drivers in not only Michigan but also the rest of the country. Well, apart from drunk drivers.

According to the Center for Disease Control and Prevention, motor vehicles crashes are the leading cause of death among teenagers. As many as a third of deaths among 13-19-year-olds are caused by traffic accidents.

Source: CDC

This is particularly prevalent among drivers aged 16. They have higher crash rates compared to other age groups.

We understand that this might be worrying if the new driver is your son or daughter. And possibly even more troubling if you’ve never had a new driver before.

Sadly, that’s only a part of the problem.

Your insurance provider is also aware that teenagers belong to a special category of drivers. That’s why they might increase your insurance premiums substantially.

According to an analysis of standard auto insurance premiums, a single teenager translates to an average premium bump-up of 78%.

It’s notably more expensive for boys, with an average rate of 89%. Girls, on the other hand, attract a much favorable rate of 66%.

Source: Insurance Quotes

In areas like Rhode Island, Maine and New York, you might have to pay about 100% more. But thankfully, despite comparatively high insurance auto insurance rates in Michigan, companies have been a little considerate with this one.

Premiums only increase by an average rate of 55%. Not bad. Not bad at all. Plus you can reduce this even further if you’re particularly strategic.

Even better, you can also minimize risks for your new driver using proving methods.
Conversely, handling the whole process blindly could increase your policy rates two-fold. With correspondingly high auto risks.

So we’ll walk you through 7 things you should do to get everything in order.

1. Understand The Law

Technically, you two are both drivers now. But the State of Michigan views it differently. It does not consider you as equals.

Because of the corresponding risks, Michigan has enacted laws specifically for young drivers. They are meant to minimize risks and overall road carnage.

For instance, it’s illegal for a teen driver with Level 1 or 2 Graduated Driver License (GDL) to drive while using phones. Additionally, a Level 1 driver is only allowed to drive alongside a licensed designed passenger aged 21 or older.

Failure to understand and adhere to these laws will not only endanger the new driver. It might also turn out to be sufficient grounds to reject a claim in case of an accident.

2. Train the New Driver Further

Contrary to popular misconception, passing a driving test doesn’t mean you’re a good driver. A license is only an indication that you barely meet the minimum required standards. That you now have the power to learn driving on an actual road.

If licenses were only issued to good drivers, tests wouldn’t be as simple as a couple of parallel park jobs. They’d be much more complicated with difficult tasks.

But parents don’t realize so. Research indicates that they rarely train their kids to become safer drivers. They mostly rely only on the driving education programs.

Certainly explains why new drivers frequently take unreasonable risks and make otherwise avoidable mistakes.

3. Buy Used Cars Or Hold Onto Ones You Already Have

Having a new driver might feel like a great time for a new start. Probably a new car as a birthday gift? At least that will keep them away from messing around with your car, right?

Understandably, getting a new car for a teenage driver may be a thoughtful token of love. They’ll definitely be very excited. But your insurance provider won’t be as gleeful.

A new car means expensive repair jobs. Which consequently translates to higher premium rates.

A teenage driver should instead start out with the cars you already have. And if you have to purchase an additional one, get a used one. At least until they are adequately experienced as safe drivers.

To help you in this, the Insurance Institute for Highway Safety annually publishes a list of the safest, most affordable vehicles for teenagers. Your final choice should be largely dependent on your specific condition and insurance company policies.

4. Shop Around

A car may be a bad idea. But not everything about a fresh start is equally unwise. A thoughtful move like switching to a more favorable insurance provider would be increasingly beneficial.

Of course, it would only be logical to shop around among competitor companies for cheaper rates. But, as we’ve established before, quite a number drivers don’t bother.

But don’t be quick to tell them off. Beating insurance companies at this game is actually not as easy as it might seem at first.

They know the process of shopping around is exceedingly cumbersome. You’ll essentially scout the web seeking alternative quotes. And it could be tiring and frustrating especially if you don’t know where to begin.

To discourage you, therefore, your provider will make a seemingly “attractive” offer. Possibly a discount for an additional driver.

But in actual sense, the new premium might turn out to be significantly higher than possible offers from a host of other alternative companies.

So engage reputable independent insurance agents. They would know gold mines that are perfectly ideal for your situation.

5. Seek Insurance Discounts

Insurance companies offer multiple auto insurance discounts to encourage their customers to stick around. And this alone even triggers drivers to increase spending by adding more individuals and vehicles

In addition to good student discount, other possible ones include:

● Multi-vehicle discount

● Low mileage discount

● Driver training discount

● Good driver discount

● Family setup discount

● Monitored teen discount

Each comes with a unique set of qualification criteria. Since you’re bound to qualify for a few with a new driver, discounts are undeniably a good marketing strategy.

But insurance providers can be very sly at how these are implemented.

Chances are you’d expect discounts to apply automatically. But only selected ones like increasing deductibles would immediately reduce your premiums. And that’s probably due to the fact that they are directly beneficial to providers.

The rest require you to actively seek them out before getting in touch with your provider. They can only be applied if you specifically ask for them.

To avoid missing out on crucial ones, engage your independent insurance agency. Its agents should know how to effectively secure all the possible discounts.

6. Use One Insurance Policy

Why should you bother finding ways around your own policy when you could simply apply for a separate one? Isn’t it even less cumbersome splitting and dealing with two distinct policies?

To some extent, two separate policies might be easier to manage. Because sorting out their terms and factors would be much simpler. Especially to someone who’s yet to learn all the insurance ropes.

But, unfortunately, this could be costlier than just adding the new driver to your existing policy. The latter is flexible enough to grant you multiple discount options on bundling and deductibles.

According to a study commissioned by InsuranceQuotes.com, a separate policy for a new driver aged 18-24 will cost you 8% more. In some states, the premiums could be as much as 50% more than sharing the same policy.

Instead of two separate policies, you should review and adequately adjust your current policy. But only after a comprehensive analysis of your situation and possible risk factors.

For example, you might consider going for collision and comprehensive coverage. On one part, it might be thoughtful because of the increased risks. But it would not make sense if you’re dealing with older vehicle models.

To make an informed decision, independent insurance agents should be able to assist you to conduct a solid analysis.

7. Update Safety Accessories

Thanks to tech advancements, some of the latest car models come with quite impressive safety features. The 2016 Chevrolet Malibu, for instance, has many protective elements and grants parents some level of activity oversight.

Such a car would allow you to even set a speed limit for your teenage driver. Plus cap music volume and assess reports on driving patterns.

Pretty neat. But, as we’ve discussed, these latest tech-packed cars are expensive with correspondingly high insurance premiums.

Thankfully, recent explorations and advancements have also introduced many aftermarket alternatives. While some accessories are model-specific, there is a host of others which are universally compatible with all brands. Including older cars

If you need to monitor driving behaviors, for example, you could purchase a gadget like the Voxx Carlink. It’s directly connected to car onboard diagnostics and uses Bluetooth to link to your smartphone.

The consequent data would not only be leveraged for training purposes. It could also help you secure a good driver discount from your insurance company.

And that’s just a drop in the ocean. There are many other companies producing a wide range of additional safety accessories.

And the best thing about them is that they are available in all price ranges. For a few dollars, you can get a gadget that would possibly knock hundreds of dollars off your premium.

Conclusion

To recap:

● At 14 years and 9 months, Michigan has one of the lowest eligibility ages for learner’s permits.

● However, new drivers are only granted restricted licenses at 16.

● Then full licenses when they hit 17, which is also fairly low compared to other states.

● Although the issuance of licenses to teenage drivers has been dropping in the recent past, the bulk of new drivers are still individuals aged 16 to 19.

● According to the Center for Disease Control and Prevention, motor vehicles crashes are the leading cause of death among teenagers. As many as a third of deaths among 13-19-year-olds are caused by traffic accidents.

● According to an analysis of standard auto insurance premiums, a single teenager translates to an average premium bump-up of 78%.

● Because of the corresponding risks, Michigan has enacted laws specifically for young drivers.

● Passing a driving test doesn’t mean you’re a good driver. A license is only an indication that you barely meet the minimum required standards.

● Research indicates that parents rarely train their kids to become safer drivers. They mostly rely only on the driving education programs.

● A teenage driver should instead start out with the cars you already have. And if you have to purchase an additional one, get a used one.

● A thoughtful move like switching to a more favorable insurance provider would be increasingly beneficial.

● Insurance companies offer multiple auto insurance discounts to encourage their customers to stick around.

● Recent explorations and advancements have introduced many aftermarket safety alternatives. While some accessories are model-specific, there is a host of others which are universally compatible with all brands.

Ultimately, overall handling of this process and consequent outcome depends on how well you analyze your risks. Only an experienced independent professional would be able leverage this to achieve the best possible results.
So get in touch with us today and let us help you secure a cheap but adequately ideal policy for your new driver.

How To Make Sure You’re Not Being Overcharged For Insurance

By | Auto Insurance | No Comments

Let’s be honest. Things are not looking up for Michigan drivers.

As you’ve probably noticed by now, there has been a rather unpleasant wave that has hit the auto insurance industry in the U.S. And Michigan is right at the center of it all.

If other states are experiencing a wave, we might just as well call ours a storm.

In 2010, drivers were paying an average of $1073 for auto insurance Michigan. It sure felt like a lot of money, especially considering the recession then.

Source: National Association of Insurance Commissioners

We hoped things would get better as the economy improved, and Americans continued buying additional vehicles. It seemed like insurance providers would, of course, reduce their premiums with the expanding market base.

At least competition increased as more companies joined the race. But sadly, that’s where the good news ends.

Currently, barely 8 years later, insurance premiums have tripled. At an average rate of $3059, Michigan car owners are paying about 70% more compared to other U.S. states.

While it’s the most advanced insurance system in the nation, Michigan’s car insurance is indisputably the most expensive. Hence the never-ending debate on repealing the controversial no-fault insurance legislation.

But that’s only one half of the story. The legislation only outlines the minimum allowable coverage. But the buck eventually stops with insurance providers. They are largely responsible for the skyrocketing rates.

Of course, there are a number of genuine factors that may have triggered the revision of rates across the board. But this only applies to selected providers.

Considering the huge disparity between premiums charged by different companies, it’s possible that some might be duping their customers. Despite marketing themselves as protectors, it’s important to remember that insurance providers are still businesses. And making an additional profit is always the goal.

Source: ValuePenguin

But isn’t insurance a heavily regulated industry?

That may be true. And the principal reason why the bulk insurance companies will not be swindling you directly.

Instead, their agents are using a rather interesting but clever approach. They know that an overwhelming majority of car owners are too busy to learn the nitty-gritty.

And they are right. Got to give it to them. Most people are only interested in knowing respective packages and their corresponding prices. Additional details are for the birds.

So, in the end, you might be overcharged for your insurance.

To make matters worse, it will not be a one-off payment because you’ll make recurrent remittances. The overcharge will, therefore, keep ballooning with each new payment.

And that, ultimately, may add up to hundreds of thousands of dollars by the time you move on. If you’re still not keen on the details, you might end up even being overcharged further by a separate provider.

So let’s get to it. How can you make sure that you’re not being overcharged for insurance?

Determine the Amount of Coverage You Need

Nothing is as half as juicy as a prospective customer with zero knowledge about their needs. The less you know about your condition, the more insurance agents will love you.

The first thing you’ll probably rely on is Michigan’s laws on auto insurance. But, as we’ve mentioned, those are only guidelines.

The legislation won’t tell you what you need. It barely stipulates the minimum every driver should have on the road.

In simplest terms, it only addresses standard liabilities. Not what you should protect yourself from.

Of course, you can approach a provider seeking the cheapest car insurance in line with the law. But its agents will not take this lying down.

They’ll instead use the law as a launching pad. They’ll try convincing you that you’re more vulnerable to numerous other liabilities.

Or alternatively, they might drop something along the lines of not selling a distinct minimum package. That to protect their customers adequately, they’ve “attached” additional coverage.

So you end up purchasing coverage you didn’t even need in the first place. All under the illusion of “adequately” protecting yourself.

The only way out of this is comprehensively evaluating your condition first. Conduct a detailed assessment of your car, its drivers and all the possible risks. This will help you establish likely liabilities, and subsequently the amount of coverage you need.

Provide the Required Information

We’ve previously discussed factors used by insurance companies to assess risk. But that only covered the primary elements that apply across the board.

You’d be surprised by additional criteria different providers profile their customers on. Even the slightest bit of seemingly negligible information could make a difference.

Take defensive driving training, for instance. Even after taking it up, you probably wouldn’t consider it a fact worth briefing your company about. After all, insurance agents are seemingly mostly focused on driving history.

But, interestingly, letting the provider in on it could save you about 5 to 20% of your premium. As a matter of fact, car owners who’ve completed the training are saving an average of $142 a month on insurance.

Definitely sounds like a great bargain, especially considering the fact that the course would cost you about $40 to enroll.

Source: DefensiveDriving

Review Records of Additional Drivers

You’ve learnt that women attract lower rates compared to male drivers. You’ve also heard that a married individual is not as risky as a single driver.

So your female employee and her married counterpart automatically become the favorite candidates for handling a new company car. Then you ignore all the young, single drivers that would otherwise attract higher premiums on your commercial auto insurance.

Unfortunately, risk assessment is not that straightforward. It’s not just a matter of white and black.

Of course, it helps to know a thing or two about the risks attached to various driver profiles. But, you would be doing yourself an injustice by analyzing additional drivers according to just one or two criteria.

Insurance companies are more thorough. While it’s true that women are considered less risky, many men have still managed to attract cheaper car quotes than their female counterparts.

Take, for example, a lady with past traffic violations. Even with an additional wedding ring on her finger, she will still probably attract high premium rates. Especially if her previous offences are as grave as DUI or over-speeding.
A male driver with a clean record, on the other hand, could attract a much lower premium. Thanks to a risk assessment process that systematically evaluates all the factors cumulatively.

So you might want to pay attention to every single detail before introducing an additional driver to your policy.

Avoid Duplicating Medical Coverage

According to a 2017 Gallup Healthways poll, only 11.3% of American adults don’t have health insurance. Consequently marking a significant reduction from the 2013 high of 18%.

Source: GallupHealthways

Evidently, an average driver in Michigan has medical coverage in addition to their auto insurance. Sounds good from a protection point of view. But things start to collide when we shift to the numbers.

A good health insurance policy is comprehensive enough to cover even accidental injuries. Including personal injuries that are also addressed by auto insurance companies. Hence a rather confusing grey area.

As a result, you could end up paying for protection you are already enjoying through your health insurance coverage. While this is particularly prevalent among individuals insured by separate companies, it’s also possible even when you deal with the same provider.

To make matters worse, insurance agents are likely to ignore notifying you in case of any collisions.

And that’s why the buck stops with you. It’s critically important to read and understand the fine print in your medical coverage before applying for auto insurance.
If your health insurance is solid, purchase only the minimum required injury coverage.

Seek Insurance Discounts

This is a direct, and a rather obvious trick to dodge extra insurance charges. Insurance providers, particularly established brands offer a wide range of discounts on many policies.

While this is largely beneficial, it presents one problem. The discounts can be so diverse and extensive that it would take you weeks to go through all of them. Possibly more if you’re comparing multiple providers.

Even after qualifying for some, there’s a great chance you don’t know about them yet. And sadly, the company might not even inform you. Especially if you’re already a paying customer.

Some common discounts you should look out for include being married, upfront payment, bundling, and good student.

41% of insurance companies offer discounts to married individuals. Their average reduction rate is 14%. Paying for your insurance upfront, on the other hand, is highly encouraged by 46% of providers. They offer an average discount of 9%.

To encourage customers to purchase multiple covers, many more insurance providers are offering discounts for bundled policies. 68% of them, for instance, reduce premiums by an average rate of 9% if you purchase both homeowners and auto insurance from them.

Good students are even favored more because they translate to substantially reduced risks. 77% of providers are already providing discounts to good student drivers. You can knock about 16% off your premium.

If you’re strategic and persistent, you might find yourself multiple discounts at the same time. Translating to significantly reduced rates.

Shop Around

If you think you’re being overcharged, shopping around should go without saying. Unfortunately, it’s easier said than done.

You’ll probably be pretty inquisitive during your first purchase. So you might be curious enough to check around and compare offerings from different providers. But then the drive might start to fade away with each passing year as you get comfortable.

Of course, widespread public dissatisfaction with the increasing rates should have all drivers scouting around for alternative options. But according to a survey steered by NerdWallet, this is far from being realized.

38% of car owners haven’t made any efforts to assess their insurance costs in the last three of more years. Shockingly, 17% of them haven’t bothered at all.

Source: NerdWallet

But insurance companies are not surprised at all. They’ve always relied on this trend. Agents know that their customers are too busy to crawl around in search of quotes by other companies.

And in case you feel like doing so, you might be blinded by loyalty incentives. In the end, you might not even have a problem with increased rates as long as they are spread over many years.

But it’s all a farce. Nationally, good drivers are being overcharged at an average rate of $416 every year because of this. The worst-hit areas are Connecticut, Michigan and Delaware, with customers losing $1845 annually.

Shopping around occasionally, therefore, could eventually save you more than a thousand dollars every 12 months.

Conclusion

To recap:

● At an average rate of $3059, Michigan car owners are paying about 70% more compared to other U.S. states.

● While it’s the most advanced insurance system in the nation, Michigan’s car insurance is indisputably the most expensive.

● Conduct a detailed assessment of your car, its drivers and all the possible risks. This will help you establish likely liabilities, and subsequently the amount of coverage you need.

● Even the slightest bit of seemingly negligible information could make a difference on cost.

● Informing the provider about defensive driving could save you about 5 to 20% of your premium. As a matter of fact, car owners who’ve completed the training are saving an average of $142 a month on insurance

● Insurance companies employ a risk assessment process that systematically evaluates all the factors cumulatively.

● You could end up paying for protection you are already enjoying through your health insurance coverage.

● Some common discounts you should look out for include being married, upfront payment, bundling, and good student.

● 38% of car owners haven’t made any efforts to assess their insurance costs in the last three of more years. Shockingly, 17% of them haven’t bothered at all.

Evidently, evaluating your insurance costs is not as easy as it sounds. It becomes even more cumbersome when you have to do it repeatedly to keep everything in check.
Thankfully, there’s a much simpler and straightforward way to handle the extensive process. Just hire a reputable independent insurance agency to take care of everything, and further advise you on additional cost saving tricks. Get in touch with us today to learn more.

What To Do When Your Car Is Totaled

By | Auto Insurance | 2 Comments

You just got off from work and can’t wait to get home after a long day at the office. You desperately need to rest. And nothing will stop you. Not even the heavy snow and ice falling in Michigan.

Confident about your car’s ability to cope with the weather, you switch on the ignition and start cruising down the highway. Apart from the reduced visibility, everything else seems fine. You’re even enjoying the drive as you gradually wind down after a tiresome day.

There’s very limited traffic today, and the drive begins getting boring. The time is now seemingly moving slow. You start yawning, feeling woozy because of the immense amount of sleep creeping into your head.

Suddenly, you hear loud successive honks, and you bolt from sleep. You’re a bit surprised that you had dozed off behind the wheel.

But there’s no time to think about all that because a truck is quickly coming at you. You hadn’t even realized that you had drifted to the oncoming lane.

In panic, you try to turn the steering wheel to correct the situation. The oncoming truck, on the other hand, is visibly trying to apply brakes.

But the road is proving to be too slippery, and it starts veering across the highway. Your car is also letting you down because it’s doing very little to avoid impending danger.

You brace for impact, knowing too well that you might be taking your last breath. Then deafening noise before you black out.

You later gain consciousness just in time to pull yourself out of the wreckage. The seatbelt seemingly came in handy and saved your life. You’ve only suffered minor injuries.

Still shaken, you suddenly realize that you now have one huge problem. The car is totaled. Or so it seems.

As you stand back to analyze the damage, you notice a tree succumbing to the extreme weather and falling on another parked vehicle. Great. A second totaled vehicle.
It sure looks like a day for wreckages, thanks to the snowfall. Maybe another vehicle is probably losing control and hitting a wall in a different part of Michigan.
Whatever the cause, you are all facing a similar problem now. Your cars are totaled, and an insurance claim might be the only way to save yourself.

But, are they actually technically totaled? You’ve heard about other drivers successfully resuscitating their cars after major accidents.

So, is that possible in this case? Or will you be getting a new car? What are the requirements in the first place?

When Is A Car Considered Totaled?

“Totaled” simply means that the car is extensively damaged and largely irreparable. But even when it has been completely flatted by a building, you’re not the one who’ll make this conclusion.
Instead, your insurance company will decide whether your car is a total loss or not. This determines the subsequent type of claim.
A car only becomes totaled if:

● It’s impossible to repair it safely.

● Repair costs surpass the vehicle’s current value. In the insurance circles, a car’s price is assessed as the actual cash value (ACV).

The evaluation process takes into consideration several relevant factors. Two of the principal ones include overall depreciation and any improvements that may affect value.

But don’t get worked up about this right now, because we’ll be comprehensively reviewing it shortly.

Now, of course, it doesn’t make any economic sense doing repairs that exceed the vehicle value. Unless the car has an undeniable sentimental value. That’s why your insurance agent is not likely to contest total loss if the damages are actually extensive.

● The amount of damage exceeds limits stipulated by state laws.

Many states analyze this through a system known as Total Loss Formula or TLF. Essentially, the car’s scrap value plus repair costs need to be equal to or surpass the vehicle’s pre-accident value. This automatically qualifies it as a totaled car.

In Michigan, the allowable damage threshold percentage is 75%. Totaled vehicles are expected to equal or exceed this.

Source: Car Insurance

Steps To Take When Car Is Totaled

So far, 12 to 14 percent of all vehicles reviewed by insurance agents post-accident are ultimately declared totaled. This applies not only to Michigan but also the rest of the other American states.

Technically, this translates to a 1 out of 7 chance of total vehicle loss in case of a traffic accident. Additionally, the older a car is, the higher its chances of being declared irreparable. The trend is consistent up until vehicles aged 10 to 15 years old.

Source: CCIS

With odds that high, it’s critically important for auto insurance Michigan customers to understand the following post-accident procedure:
Establish Insurance Providers That You Might Be Filing a Claim With

As a Michigan-based driver, you’re protected by auto insurance coverage from one of the many providers in the state. But this doesn’t necessarily make your company the primary compensator in case of an accident.

It all depends on the precise circumstances surrounding the accident.

If another driver is at fault, for instance, their insurance company is the one that should be covering consequent costs.

However, and rather unfortunately, a fifth of drivers in Michigan are uninsured. Of course, that’s illegal, but it doesn’t make them immune to accidents.

In case you’re unlucky enough to have your car totaled by one, you’ll have no choice but to turn to your provider. An underinsured/uninsured motorist coverage should sufficiently protect you here.

The collision coverage, on the other hand, is applicable when you are at fault. Your insurance company will be forced to extend compensation to affected third-parties

Tow Vehicle To Relevant Auto Shop
Even when it’s visibly irreparable, you should tow the car to the auto body shop nominated by the insurance provider. If you’re lucky, you might deal with a flexible insurance agent who’s willing to accommodate your preferred shop.

This is where the bulk of assessments and damage appraisals will be conducted.

Determine the ACV Attached To The Car

A comprehensive appraisal will outline all damages to the car. Insurance providers subsequently use this report to determine corresponding estimated repair costs.

They’ll also do a comprehensive assessment of your car’s actual cash value. The findings are then compared with the former to establish the actual state of damages.

Eventually, the vehicle will be considered totaled if the estimated repair costs are equal to or exceed 75% of the ACV.

Decide Whether You Want To Repair or Replace The Car

Not all drivers are quick to replace their totaled cars. If it perhaps has sentimental value, you may choose to proceed with repairs as opposed to replacement.

But this may not necessarily go down well with the insurance company. That’s why it’s always advisable to provide additional records of past vehicle improvements.

This alone might increase the overall value, consequently persuading the insurance provider to opt for repairs over replacement.

Receive Initial Offer From The Insurance Company

At this point, insurance agents will get in touch with you with a settlement offer to cover replacement or repair.

In most cases, initial offers are usually lower than the expected settlement. So, instead of rushing to accept, you should seek to further engagement.

Negotiate The Settlement Offer Through An Independent Insurance Agency

Engaging the provider should give you the chance to negotiate the settlement offer.

Although understanding your rights might be helpful, you’ll be dealing with extensively experienced agents. So don’t expect them to simply agree to your counter offers.

They’ll attempt beating you at the negotiating table by capitalizing on any rights or clauses you may not be aware of.

Thankfully, there’s a way around this. Instead of getting too worked up trying to beat professionals at their own game, simply consult a reputable independent insurance agency. They should have the requisite knowledge and experience to conduct a more fruitful negotiation process.

Adobe Stock #62104449

In the end, the settlement is closed when you deposit the final insurance check. This takes away your legal right to seek additional compensation.

Calculating the Value of a Totaled Car

All things considered, the settlement should ideally match the actual pre-accident value of the car. Knowing how to calculate it, therefore, is fundamental to the whole claim process. Otherwise, you might end up with a settlement that is barely a fraction of the ACV.

The first step is establishing the precise conditions of the car before the accident. Insurance company adjusters often review elements like mileage, age, and previous damages.

Such findings are subsequently fed to third-party software for comprehensive market research. The system will crawl through numerous online databases to compare prices of similar vehicle models.

Finally, the insurance company might settle on the average price, then make a lower initial offer.

But fortunately, you don’t need similar software to conduct comparative assessments. You can alternatively use sites like Edmunds.com, NADA.com and KBB.com to get your car’s average market rates.

This should place you in a better position to negotiate a settlement with the company.

Possible Options After Car Is Totaled

We’ve largely focused on settlements since it’s the most preferred option. But handling totaled vehicles is not a one-way street. There are several choices for drivers based in Michigan:

Take The Money: Drivers overwhelmingly love this option because of the money attached. The insurance company issues a check on the negotiated car value minus your deductible.

And the best thing about it you’ll be free to spend the funds as you please. You might as well supplement it and purchase a better vehicle.

Keep The Car and Fix It: For several reasons, you might want to retain the car and use your own resources to repair. It may seem unwise at first, but it totally makes sense if the damage is largely cosmetic.

It’s also worth considering if the car has substantial sentimental value. Or in case the settlement amount is insufficient for a new vehicle.

The insurance company basically deducts the vehicle’s salvage value plus the deductible and hands you the rest of the cash.

Keep The Car and Don’t Fix It: This is similar to the option above. But, instead of fixing the car, you leave it as it is. Possibly for sentimental reasons.

Keep The Car and Sell It: Totaled cars have always been good sources for original car parts. The final proceeds, combined with the salvage payment by the insurance company might even surpass the would-be settlement.

Conclusion

To recap:

● “Totaled” simply means that the car is extensively damaged and largely irreparable.

● A car only becomes totaled if: It’s impossible to repair it safely; repair costs surpass the vehicle’s current value; the amount of damage exceeds limits stipulated by state laws.

● So far, 12 to 14 percent of all vehicles reviewed by insurance agents post-accident are ultimately declared totaled.

● Establish insurance providers that you might be filing a claim with.

● Even when it’s visibly irreparable, you should tow the car to the auto body shop nominated by the insurance provider.

● A comprehensive appraisal will outline all damages to the car. Insurance providers subsequently use this report to determine corresponding estimated repair costs.

● Eventually, the vehicle will be considered totaled if the estimated repair costs are equal to or exceed 75% of the ACV.

● In most cases, initial offers are usually lower than the expected settlement. So, instead of rushing to accept, you should seek to further engagement.

● Instead of getting too worked up trying to beat professionals at their own game, simply consult a reputable independent insurance agency. They should have the requisite knowledge and experience to conduct a more fruitful negotiation process.

● All things considered, the settlement should ideally match the actual pre-accident value of the car.

What else do you consider important when handling totaled cars?

With all these elements to consider and evaluate, this procedure is evidently cumbersome and quite demanding. So feel free to contact us. We’ll not only do the heavy lifting for you, but also help secure a bigger settlement check.

Ultimate Progressive Insurance Review

By | Auto Insurance, Homeowners Insurance | 2 Comments

To beat the rising auto and homeowners insurance rates in Michigan, some of your friends might be switching to smaller insurance providers. Others are advising you to stick with the big players to enjoy optimal protection.

But how good are the leading companies? Are their rates proportionally fair to Michigan residents? How satisfied are their customers?

To help you out, let’s start by looking at Progressive Insurance. Having been around for a couple of decades now, it sure is one company that many consider when it comes to homeowners and auto insurance in Michigan.

So, what is it all about? Does it offer products that would suit your needs?

Overview

Headquartered in a Cleveland suburb called Mayfield Village, Progressive Insurance has grown through the years to become a major industry player.

It may currently seem like a relatively young corporation in auto and homeowners insurance spaces. Its journey started as early as 1937 as a privately-held company. Then remained so for a couple of decades.

It was not until 1971 that the Ohio-based insurance provider finally went public, consequently opening doors for new opportunities.

What followed for the next couple of decades were remarkable changes that revolutionized the entire insurance industry. Progressive Insurance’s innovative genius started introducing new customer service approaches throughout the 90s and into the 2000s.

And people loved them. Customer engagement strategies like availing quotations both online and over the phone were first practiced by the company.

While competitors struggled to catch up, Progressive Insurance further made it easier for consumers to compare rates across the board.

They had begun delivering their insurance quotations alongside their competitors’ rates.

Of course, nothing is as effective as this in assuring the fairest rates. So the provider’s accelerated growth came as no surprise, as its popularity peaked among consumers.

It has since managed to maintain a secure foothold in United States’ insurance market, including Michigan. As of 2015, the corporation boasted a significant market share of 8.8%.

With just three companies enjoying larger shares, Progressive Insurance is currently the fourth largest auto insurance company in the U.S.

Source: InsuranceJournal

While this survey only covers auto insurance, Progressive is a dynamic corporation that has ventured into other multiple types of insurance coverage.

Types of Coverage Provided By Progressive Insurance

Other types of insurance coverage you can get at Progressive are:

Classic car insurance

● Umbrella insurance

● Business insurance

● Segway insurance

● Travel trailer insurance

● Snowmobile insurance

Motorcycle insurance

● Personal watercraft insurance

● Recreation vehicle insurance

● Golf cart insurance

● All-terrain vehicle insurance

● Boat insurance

● Commercial auto insurance

● Health insurance

● Life insurance

● RV insurance

● Renters insurance

● Homeowners insurance

Quite a solid list of offers. Progressive Insurance has essentially focused on four wide fields- auto, health, life and homes.

Thankfully, they are all available to Michigan residents, including auto and homeowners insurance.

So, where exactly is the company stationed?

Progressive Insurance Locations

Progressive Insurance is yet to place concierge service centers in every state. Only 25 states, including Florida, Arizona, California, and New York, host them.
Michigan has two- in Sterling Heights and Livonia.

These centers serve as the principal points for a variety of consumer services including auto drop-off and pickup, claim adjusting, and more.

That said, don’t be quick to dismiss the company if you don’t live in any of these locations. Fortunately, the insurance provider also considers customers beyond the precincts of the 60 concierge service centers.

Through a map on the main site, you can find a local repair facility that has been adequately certified by the provider to offer concierge services. There are several spread over Michigan.

Customers can also file their claim paperwork, and subsequently track them through these local agents.

Alternatively, you can engage an independent insurance agency in Michigan to help you with each of these processes.

Progressive Insurance Features

To maintain a competitive edge against other insurance companies, Progressive Insurance offers a wide range of unique features.

While many of them are open to all types of coverage, some are specifically tailored to their corresponding policies.

Some of the main ones include:

● Google Assistant Capability: If you have a Google Home device, you don’t have to always call the company to seek clarifications on their policies. Progressive Insurance has integrated a digital voice assistant into the device to help you with this.

Simply ask a relevant insurance question and it will revert.

● Snapshot Mobile App: Although not yet available in every state, Snapshot is changing how drivers manage risks. Signing up for the app allows it to monitor your driving habits, and provide detailed information.

You’ll be able to assess how you’ve been driving, nature of all your trips, plus generate additional custom data.

● Progressive Mobile App: The company has also developed its own mobile app to help its customers conveniently track service centers, and report claims.

● Comparison Feature: As we’ve mentioned, the company created a huge impact in the industry by providing comparative rates. So it only makes sense to refine this concept and provide the feature through the main site.

You can compare your quotes with corresponding rates charged competitor providers.

● Name Your Price Tool: This feature reverses roles in the quoting process. Instead of crunching numbers and calculating discounts, you simply enter what you’d like to pay for your coverage.

After answering a couple of queries, you’ll get a range of coverage options in line with your needs.

Sounds interesting. But, does this come at an extra cost? What should you expect to pay when you proceed with Progressive Insurance?

Are they generous enough to offer attractive discounts?

Progressive Insurance Pricing and Discounts

For a company which controls a market share of 8.8%, Progressive Insurance has to have competitive pricing for its covers.

There is a wide range of covers priced differently according to your specific condition and any corresponding discounts. While some may turn out to be slightly costlier than the closest competitors, most of the premiums are predominantly cheaper.

Take, for instance, average premiums for different driver profiles.

Source: ValuePenguin

Even when your estimated quote is the lowest around, your premium might still drop further. Because of the sheer number of discounts on offer, you’re bound to qualify for one. Or several if you’re a low-risk customer.

Some of the main ones include:

● Bundle Auto and Property Discount: For customers who buy both auto and homeowners insurance policies from Progressive Insurance.

● Teen Driver Discount: For customers who add their teenage kids as drivers to their policies.

● Good Student Discount: You qualify for this if you have a student on your policy who maintains at least a grade “B” in school.

● Automatic Bill Payment Discount: Applicable to individuals who set up recurring automatic remittances to repeatedly renew their policies.

● Pay in Full Discount: For customers who proceed to pay for their annual policies in full, instead of remitting cash on a monthly basis.

● Sign Documents Online Discount: For customers who choose to sign their insurance papers online, as opposed to doing it physically.

● Continuous Insurance Discount: For customers who maintain continuous insurance covers without any breaks. It also extends to individuals who were previously insured by other companies.

● Homeowner Discount: For customers who own homes, even when they are insured by other companies.

● Multicar Discount: For vehicle owners who insure several cars with the company.

● Safe Driver Discount: For drivers who’ve gone for three years without traffic accidents or tickets.

● Start Your Quote Online Discount: For customers who handle the whole quotation process online, and proceed to purchase covers through their phones.

Progressive Insurance Claims

Claims are, without doubt, the most critical part of the provider-customer relationship. A company’s ability to speedily process and make settlements is an indication of its commitment to its customers.

Progressive Insurance makes a good attempt at providing protection from the word go. Customers can conveniently initiate the whole process by reporting a claim through one of the following methods:

● Calling toll-free 1-800-274-4499

● Logging into their customer portal through a username and password.

● Submitting a report through the Progressive Mobile App.

The mobile app method is seemingly the most convenient of them all. It comes with an added photo feature, which allows you to take and upload relevant images.

After reporting, you should wait for a call from the company. Progressive Insurance promises to do so in the same business day. And further neatly outlines the process of filing a claim on the website to ease the process.

Of course, you could argue that many insurance companies provide pretty much the same options. But Progressive goes a step further and offers a concierge service for auto insurance customers.

All customers are required to do is simply drop their vehicles off at any of the service centers. The provider will then take care of everything, including repairs and estimates. Ultimately, they get in touch with their customers when they are satisfied that the vehicles are ready.

But there are few isolated cases where a customer may not be within the proximity of a concierge center. That’s why the company found it necessary to link up with selected repair shops that can provide the service.

Thankfully, this is a not a strict requirement. The process is flexible enough to accommodate customers who prefer having their cars handled by repair shops of their choice.

That said, it’s worth noting that working with an independent insurance agency makes the process a whole lot smoother. They know the right buttons to push to make providers handle your request efficiently.

So, what are the experiences of people who’ve tried filing claims with Progressive Insurance? Are customers pleased or not?

Progressive Insurance Customer Experience

For quite some time now, J.D. Power has been ranking insurance companies based on:

● Settlement

● Rental Experience

● Repair Process

● Estimation Process

● Claim Servicing

● First Notice of Loss

● Overall Satisfaction

According to the latest rankings, Progressive insurance is placed at number 13 with an overall rating of three out of five stars.

Source: J.DPower

From customer experiences, it manages to score three on just about everything, apart from “Rental Experience”. That translates to an “About Average”, going by the site’s scoring legend.

Now let’s switch to Better Business Bureau, another popular review platform.

Unfortunately, Progressive Insurance is not accredited by BBB. But it still manages a score of 3.75 out of 5, from 190 customer reviews. That, according to the site, is considered a grade A+.

Bottom Line

Progressive Insurance may not be the cheapest insurer for some people. But it shines by its willingness to try out new technologies to improve service delivery.

Although it has faced harsh criticism from some consumers, the overall number of complaints are expected for a company of its magnitude.

Your personal experience, however, is largely dependent on how you approach it, and interaction with its agents. That’s why it’s always a good idea to capitalize on independent insurance agencies.

Such an agency will not only advise you on the best possible rates but also help you with the claim filing process.

Overall, Progressive Insurance is a corporation worth checking out if you’re seeking auto or homeowner’s insurance coverage.

Conclusion

To recap:

● Progressive Insurance has grown through the years to become a major industry player.

● It was not until 1971 that the Ohio-based insurance provider finally went public

● Customer engagement strategies like availing quotations both online and over the phone were first practised by the company.

● As of 2015, the corporation boasted a significant market share of 8.8%. With just three companies enjoying larger shares, Progressive Insurance is currently the fourth largest auto insurance company in the U.S.

● Progressive is a dynamic corporation that has ventured into other multiple types of insurance coverage.

● Progressive Insurance is yet to place concierge service centers in every state. Only 25 states, including Florida, Arizona, California, and New York, host them.

● The insurance provider also considers customers beyond the precincts of the 60 concierge service centers.

● To maintain a competitive edge against other insurance companies, Progressive offers a wide range of unique features.

● There is a wide range of covers priced differently according to your specific condition and any corresponding discounts.

● Because of the sheer number of discounts on offer, you’re bound to qualify for one. Or several if you’re a low-risk customer.

● Customers can conveniently initiate the whole process by reporting a claim through one of the three methods.

● Progressive goes a step further and offers a concierge service for auto insurance customers.

● According to the latest J.D. Power rankings, Progressive insurance is placed at number 13 with an overall rating of three out of five stars.

● On BBB, Progressive manages a score of 3.75 out of 5, from 190 customer reviews. That, according to the site, is considered a grade A+.

● Overall, Progressive Insurance is a corporation worth checking out if you’re seeking auto or homeowner’s insurance coverage.

All things considered, do you think this company would be the best fit for you? Get in touch, and we’ll help you determine this, plus other additional options ideal for you.

Don’t Make These 9 Mistakes With Auto Insurance

By | Auto Insurance | No Comments

You’ve been a good and responsible driver for as long as you can remember. Extremely cautious and conscientious, plus adequately defensive when the need arises.

You’ve also faithfully paid for your auto insurance as required by law, never once letting the policy period lapse.

As far as you’re concerned, you’re fully protected. Driving around cannot possibly be any safer than this, right?

But since accidents are called so because they are mostly never intended, your car is ultimately involved in one.

The vehicle directly ahead of you suddenly stops as you approach an intersection. Then despite your best efforts to hit the brakes, you end up rear-ending it pretty badly.

The damage looks pretty extensive and costly. But since you devotedly cater for the insurance bill, you’re not worried at all. Your insurer will take care of it all.

Then your dominoes start falling immediately you initiate the claim process. First, your insurer proves to be quite slow in responding. But you’re still patient and very optimistic.

Ultimately, the insurer is kind enough to reach a verdict on your application. But unfortunately, it’s all bad news.

Your claim is rejected on a minor technicality that you had previously overlooked. Like a model recall over an accelerator problem that you had adhered to, but failed to update your insurer.

And just when you think it can’t get any worse, you realize that your premiums will be revised upwards.

Essentially, you’ve pretty much paid thousands of dollars’ worth of insurance, but all for nothing. Funds that would otherwise buy you a spanking new car.
The only consolation would be the fact that there are many other car owners in a similar situation.

A study by J.D Power surveyed 11,857 auto insurance customers who recently filed claims across different states. The subsequent customer satisfaction rate ranged between 78.7% and 89.1% among leading companies.

That leaves out a substantial amount of customers who feel that they’d have been better off with other insurance providers.

Auto insurance claimant satisfaction rates. Source: JDPower

Now, of course, we recognize that some claims are rejected due to evidence of fraud. The rest?

Well, the bulk of them are attributed to avoidable mistakes drivers may have committed during the course of their auto insurance coverage.

And that’s just a fraction of affected individuals. As a matter of fact, these errors are even commonamong drivers whose claims successfully sail through.

For instance, many continue to overpay for insurance they don’t even need in the first place.

As an expense that is ranked third highest of owning a car, there is simply no room to make errors with your auto insurance. To help you avoid them, here are some of the most common ones:

1. Selecting Auto Insurance Company by Cost Alone

Most of the ads ran by auto insurance companies focus only on price. And of course, it all makes sense. Auto premiums are already too costly in the U.S, running into hundreds of dollars every year. So who would want to overpay for insurance?

To make matters worse, the rates are still appreciating. All factors considered, isn’t cheap insurance the best thing for car owners?

Average car insurance appreciation rates. Source: WallStreetJournal

It’s critically important to review insurance costs when selecting a company and its corresponding coverage. But that’s just a single element.

The most important thing should be the insurance coverage itself.

What does the cheap insurance come with? Does cost correspond to the coverage? Or is the insurance company attempting to dupe you by offering reduced rates for an extremely limited coverage?

2. Sticking To Legal Minimum

Auto insurance is a compulsory requirement according to state and federal laws. But, there’s still a substantial group of drivers moving around with uninsured vehicles. Michigan ranks number 4 with an average rate of 20.3%.

Uninsured drivers. Source: CarInsurance

Then there’s another increasingly larger group that only purchases insurance to be on the right side of the law. So they only stick to the legal minimum as stipulated by state legislation.

The thing with the legal minimum is that it’s just that. Nothing more than a coverage that you can get away with when cops flag you down.

In Michigan, for example, the minimum coverage is $20,000 per individual, and $40,000 per incident for injuries. Since property damage is costlier, the minimum coverage every driver is required to carry is $1000,000.

Let’s look at it from a different perspective. In case of a severe accident, the legal minimum would do little to bail you out of consequent liabilities.

So, while it might cost you more, it’s advisable to purchase insurance in line with your precise risk factors.

3. Not Fully Comprehending The Insurance Coverage

Some expressions like “comprehensive coverage” are thrown around quite a bit in the auto insurance industry. Even when they are not applicable.

Additionally, marketing teams are consistently capitalizing on attractive terms, which may be misleading when compared to their corresponding policies. Then just when you get the chance to set records straight during application, you end up ignoring the fine print in the policy document.

Interestingly, 81% of consumers are fairly confident that they know their auto insurance basics. However, and rather surprisingly, 99% of them couldn’t accurately define 10 terms commonly used by insurance companies.

Okay, we know that watching paint dry could possibly be more interesting than reading a policy document word for word. Plus insurance can be complicated even for drivers who directly work in the industry.

But, fully comprehending insurance coverage could save you a lot of problems and money. So seek additional information from your insurer on unclear issues. Alternatively, talk to your independent insurance agent to clarify and advise on all the critical aspects.

4. Not Keeping Up To Date With Discounts

It’s common knowledge that the auto insurance world is laden with numerous discounts and offers for consumers. Thanks to the progressively intense competition between insurance companies.

By now, there are discounts for almost anything. From the number of cars to your kids’ genders. Pretty exciting. But, strangely, many drivers are still yet to capitalize on this competitive environment.

Staying up to date with news on recent price cuts is at the bottom of their priority list.

Even when an overwhelming majority of the discounts don’t apply to your case, you’re bound to find some that you perfectly qualify for.

And that alone could save you hundreds, if not thousands of dollars every year.

So stay on the lookout for any attractive offers not only from your insurer, but also other companies.

5. Shopping For Insurance Without Adequate Self-Assessment

I know. We’ve previously mentioned how important it is to align insurance coverage with your precise risk factors.

But what does that mean in the first place?

Determining all the risks might seem like a pretty cumbersome process. Because, who has time to calculate the number of average miles travelled per year?

Or the number of accidents linked to a specific vehicle make?

As a result, many consumers skip this stage and proceed to purchase insurance blindly.

Self-assessment, however, is not that complicated. It only involves keenly evaluating specific factors that are relevant to insurance companies.

The number of drivers, for example, would be a good place to start. Along with age and type of vehicle.

This should help you identify insurance companies and subsequent coverage tailored to your specific needs.

The Wall Street Journal advises drives to comprehensively calculate the value of their assets, compare possible deductibles, understand state regulations applicable to them, plus consider possible insurance covers that go hand-in-hand with respective policies.

6. Failing To Notify Insurer Immediately After Accident

A car accident can be pretty frightening and disorienting even for seasoned drivers. It might take time to come to terms with the situation, and recollect your thoughts.

That’s why getting in touch with relevant insurance companies could be the last thing on your mind.

And just like many other drivers, you may choose to postpone the whole process to a “more convenient” time.

While accidents can be traumatizing, another sure fact is that insurance companies are in business. If they had a choice, they would rather hold on to their cash and reject all claims.

And with 30% of insurers claiming that they are not adequately prepared against fraud, companies are now alert more than ever before.

Only 7.4% of auto insurance claims are flagged as potential frauds within the first 125 days. Then the percentage keeps rising steadily with every new day.

It would be in your best interests to contact your insurance company immediately after an accident. The earlier the report, the easier it is to investigate and prove circumstances surrounding the accident.

Some companies even have strict guidelines on acceptable time frames for reporting an accident. Late reports, therefore, could mean automatic claim rejection even when they are genuine.

7. Prematurely Cancelling Previous Coverage When Switching Insurers

If you’re conscious about offers by different insurers, you’ll ultimately land a much favorable deal. Better than what your current insurer can offer.

Now that’s a good position for any policyholder. Unfortunately, it introduces a dilemma. Should you go ahead and cancel your current cover before switching providers?

It’s normal to be excited about switching insurance providers. But don’t let this cloud your judgment, then end up cancelling your current insurance coverage.

This mistake alone can cost you quite a lot of money, and disqualify you for discounts. Without an existing cover, the insurance provider you’re shifting to will consider you as a high-risk consumer.

Even a day after cancelling your previous coverage could result in substantially spiked premiums. Consequently beating the whole purpose of shifting camp.

The best way to manage this is maintaining a continuous coverage. Hold your horses until you successfully obtain a new policy before you finally cancel the old one.

8. Automatically Renewing Current Policy

On the flip side, if you’re not that keen on new offers, you may end up sticking with your current insurer for quite some time.

This is quite prevalent among individuals who are too busy to shop for alternative covers. And that, of course, translates to cycles of automatic policy renewal.

At first, it may not seem like such a bad idea. After all, aren’t loyal customers rewarded with cheaper rates?

A study by J.D Powers, however, suggests otherwise. Staying in your coverage comfort zone can cost you up to $300 with each renewal.

It’s rather interesting that old policies continue to attract the biggest premium increases.

Basically, the longer you stay with your insurance company, the more you stand to lose. And the vice versa is true.

Therefore, prepare to pack up your bags and leave before the next scheduled renewal period.

9. Not Engaging an Independent Insurance Agency

We’ve covered quite a number of common mistakes. But one pretty much sums them up- failing to engage an independent insurance agency.

Independent agents, unlike their captive counterparts, work for you. They don’t look out for insurers’ interests.

So their core job is to help you avoid all these mistakes.

In addition to providing critical advice on auto insurance, they interpret insurance policies, engage multiple providers to secure the best possible rates, facilitate application and shifting, plus offer much needed professional guidance when filing for claims.

If you’re engaging a reputable firm like Signature Insurance, you can rest assured that you’re not a victim of any of these mistakes.

Conclusion
To recap:
● The customer satisfaction rate ranges between 78.7% and 89.1% among leading insurance companies.

● As an expense that is ranked third highest of owning a car, there is simply no room to make errors with your auto insurance.

● It’s critically important to review insurance costs when selecting a company and its corresponding coverage. But the most important thing should be the insurance coverage itself.

● 81% of consumers are fairly confident that they know their auto insurance basics. However, and rather surprisingly, 99% of them couldn’t accurately define 10 terms commonly used by insurance companies.

● Even when an overwhelming majority of the discounts don’t apply to your case, you’re bound to find some that you perfectly qualify for.

● Self-assessment only involves keenly evaluating specific factors that are relevant to insurance companies.

● It would be in your best interests to contact your insurance company immediately after an accident. The earlier the report, the easier it is to investigate and prove circumstances surrounding the accident.

● Without an existing cover, the insurance provider you’re shifting to will consider you as a high-risk consumer.

● Basically, the longer you stay with your insurance company, the more you stand to lose. And the vice versa is true.

● Independent insurance agents’ principal job is to help you avoid all these mistakes. In addition to providing critical advice on auto insurance, they interpret insurance policies, engage multiple providers to secure the best possible rates, facilitate application and shifting, plus offer much needed professional guidance when filing for claims.

Which other mistakes do you think are quite prevalent among auto insurance policyholders? Feel free to share with us.

12 Factors That Can Increase Your Auto Insurance Rates

By | Auto Insurance | 2 Comments

12 Factors That Can Increase Your Auto Insurance Rates

You are paying one amount for your car insurance policy. Your spouse, on the other hand, is remitting a completely different amount to the same provider.

Well, this may not be an uncommon scenario. As a matter of fact, it’s quite prevalent especially among couples using different car makes.

But here’s the problem. You have different rates yet you both use the same vehicle model.

And just when you thought the situation couldn’t be stranger, you learn that your neighbor’s premiums are half yours.

You’re pretty much within the same age group, and your vehicles are similar. You’ve even confused their vehicle for yours on several occasions.

Last time you checked, there was no state boundary between you and the neighbor. You both live in the same locality, under the same federal and state insurance legislation.

So, what could be the problem? Why are your car insurance rates significantly higher?

To get to the bottom of this, let’s first establish where it all begins. With actuaries.

How Car Insurance Rates Are Determined

Actuaries are at the center of the insurance industry. Insurance providers even need them way more than sales agents and customer service agents.

All because of one simple fact. They are literally the principal determinants of profits their employers stand to make.

As you drive your car around, actuaries are busy seeking all the statistical nuances that predict the likelihood of you filing a claim in future.

To be fair, you may not have any plans to file a claim. But actuaries have a rough idea of when you’ll probably do it.

This data is subsequently extrapolated and used to determine your overall car insurance rates. The greater your chances of filing a claim, the higher your car insurance premiums will be.

Additionally, the more the money the insurance company stands to lose when compensating you, the greater their efforts of protecting themselves with high rates.

Some of the criteria used for this assessment may be quite obvious and widely acceptable. Others, unfortunately, are rather surprising and quite controversial.

Many industry experts argue that they may not directly reflect risk levels on individual car owners.

At the moment, these pricing variables are pretty standard across the industry. However, each insurance provider is using a unique formula to calculate their customer’s risk levels.

As a result, rates may differ by hundreds or even thousands of dollars.
Take a look at the average rates in selected Texas companies, for example. While you could pay $2,330 in one company, you stand to save almost half of that by simply switching to a different provider.

Average Rates across selected insurers in Texas. Source: ValuePenguin

Unfortunately, most car owners don’t bother comparing the numbers, even when their rates keep rising.

According to consumer research firm J.D Power, the rate of reviewing pricing across different insurers is in fact dropping.

In 2015 for instance, there were 39 shops per 100 car insurance policies. Compare that to 2016, when only 33 per 100 car owners shopped for alternative cheaper policies.

Well, of course, 33% may seem like a solid number to most people. Sadly, most of these shoppers don’t follow through the entire process. They only check out offers by different companies, then leave it at that.

Only 30% of car owners who engage in shopping eventually switch to cheaper insurers.

That leaves out a significant majority who don’t know why they are paying dearly for something as simple as car insurance.

To help you comprehensively compare variables and rates by different insurance companies, we’ll explore critical factors that can increase your auto insurance rates. This will consequently help you minimize your premiums, and make informed decisions when shopping for cheaper providers.

1. Low Credit Score

Credit score is by far one of the most controversial risk assessment factors. A poor score could potentially increase your car insurance premiums.

Maintaining a good one, on the other hand, could cumulatively save you thousands of dollars.

Some drivers and industry experts argue that an individual’s past financial decisions and driving habits are not correlational.

Insurance companies, on the contrary, feel that drivers with poor credit scores tend to file more claims than their counterparts.

And in most instances, they demand more compensation compared to claimants with good credit scores.

According to a survey by Conning & Co, only 92% of insurers are using this to assess their clients’ premiums.

You are particularly lucky if you’re insured in Massachusetts, Hawaii or California since the practice is prohibited in these states.

Average rate of premium increase due to poor credit score. Source: International Autosource

2. Male Gender

If you’re a man, expect to be slapped with substantially higher premiums than your wife.

Going by a CBS News post, women pay $15,000 less for their auto insurance in their lifetimes compared to men.

No, it’s not because women are exceptionally good drivers.

The debate on the connection between driving skills and gender aside, accident statistics show that men are more likely to crash.

Since motoring begun in the U.S, the bulk majority of accident victims are always male. That’s because men, especially young drivers, engage in riskier behaviors.

If you need proof, take a look at individuals arrested for failing to wear seatbelts, driving while intoxicated, and speeding.

Most of them are male. And that’s why consequent crashes are usually more severe than cases involving female drivers.

Car accident victims by gender and age. Source: Child Trends

On the bright side, this criterion is not applied in all states. Male drivers in Pennsylvania, North Carolina, Montana, Michigan, Massachusetts, and Hawaii are exempted from gender-specific rates.

3. Car Accidents

The risk of a potential accident is the fundamental reason why drivers insure their vehicles. Insurance companies are meant to protect individuals from possible resultant liabilities.

Ironically, a car accident is the last thing you need when you have an auto insurance cover.

Of course, you’ll gladly file a claim, and even enjoy the subsequent payout.

But tables ultimately turn in favor of the insurance provider once the dust settles.

The company will combine findings from independent and police investigations to establish new premium rates.

Sadly, your rates could be bumped up even if the accident was caused by a third party.

Average premium increase after accident. Source: ValuePengiun

4. Professions That Require Significant Time on The Road

It’s no secret that the biggest chunk of an individual’s adult life is spent at their workplace.

Insurance providers know this all too well. So they also consider profession and corresponding work activities in the overall risk assessment process.

If you’re a pilot, for instance, you stand to benefit from comparatively low premiums.

Other careers that involve extensive movements- like journalists and delivery driving- translate to higher insurance premiums.

While vehicular traffic is not often experienced pilots, it’s an integral part of the regular operations handled by journalists and delivery drivers.

So the resultant vehicle mileage translates to a considerably high risk of accidents. And that, to insurance companies, is interpreted as increased premiums.

5. Young Driver

Driving is exceptionally exciting and fulfilling to young drivers who are starting out. But insurance companies don’t share these sentiments.

Essentially, the younger the drivers who are handling your vehicle, the higher your premiums will be.

According to the Insurance Institute for Highway Safety, young novice drivers are the riskiest people to insure.

They frequently make wrong decisions on the road, are easily distracted, and often immature.

Going by this, the highest rates are applicable to teenagers. They can potentially drop by 20% at age 25, then progressively decline through 30 all the way to 60 years old.

Thanks to statistics that have proven reduced crash risk, drivers between 30 and 60 continue to enjoy the lowest rates.

Average premiums according to age. Source: ValuePenguin

6. Single Marital Status

Marriage, according to some sociologists, is not just a status change. It also affects your overall perception of life.

Married couples have been found to be more considerate and calculative than their single counterparts.

Married people, including young couples, often consider their children’s interests.

They are subsequently less likely to engage in risky driving than their single counterparts.

The National Institute of Health conducted an analysis on this and established that single drivers are twice as likely to be involved in motor accidents.

Consequently, a bachelor or spinster status could land you 2-25% higher premiums than married couples.

Essentially, the younger you are, the bigger the difference gap.

Insurance rates according to age. Source: Insurance Quotes

On the bright side, it’s not all bad news, at least for single people in Massachusetts. It’s the only state with legislation against this criterion.

7. High Insurance Limits

Your insurance limit refers to the maximum amount your insurer will fork out in the event of a claim.

Well, all car owners wish to secure the highest amounts possible. But, on the flipside, any limit increase is proportionally reflected in the corresponding premiums.

That’s the nature of the insurance business. Your insurer cannot afford to bump up your potential payouts without revising your insurance rate upwards.

8. More Car Horsepower

Technically, a base model Porsche Carrera should attract higher insurance rates than a four-cylinder base model Toyota Camry.

It’s more expensive and would, therefore, cost an insurance company quite a tidy sum to replace.

Pretty much what you’d expect. But things take a rather interesting turn when you switch to the six-cylinder Camry.

Compared to the Carrera, that specific Camry may be cheaper to acquire at the beginning. But subsequent insurance rates would ultimately be costlier..

Essentially, the bigger your engine, the more the horsepower your car will generate. And that, even to a motoring beginner, means increased speeds.

Hence correspondingly high premiums due to amplified crash risk.

9. Poor Driving Record

This is one area that insurers are progressively benefiting from police work on the roads.

Records of all drivers and their traffic violations are readily available in the Central Violations Bureau and the National Driver Register.

Even the slightest offenses are picked up by your insurance company and could trigger a revision of the rates.

Most of the minor violations are often inconsequential because most providers usually work with lenient frequency rates.

Major offenses on the other hand, like DUI, reflect poorly on your driving record.

If you’re lucky enough to retain your license, expect major changes to your overall premiums.

picture of signature insurance team from Warren Michigan

What Independent Insurance Agencies Really Do & How You’re Wasting Time

By | Auto Insurance | No Comments

Purchasing insurance can be a very complicated engagement. As of 2016, there were 5,977 insurance companies in the U.S, with a driving force of 2.6 million workers.

The Insurance Industry in the U.S. Source: Statista

Such a huge number of possible options should make choosing easy, right? Sadly, we can only wish it was that simple and straightforward.

Insurance is not like your typical milk and bread, which you can easily shift between brands without any repercussions. A cover is pretty much a promise of protection. It could make or break your physical and economic well-being, in case of a possible disaster.

Every company is distinctively unique, like the customers they serve. Of course, you might be tempted to go for the cheapest- because who doesn’t want to save a couple of bucks every year? After all, don’t they say the best insurance companies have the cheapest covers?

Well, cheap is good. But cheap could as well be just that when you file a claim- cheap. Therefore, considerations when purchasing insurance should extend past cost. You should be equally concerned about how the companies operate, and how you expect to be treated depending on their type.

There are two principal types of insurance companies- direct and independent.
A direct agency is run by captive agents. A captive agent is an agent who only works with one insurance company.

while an independent agency, as the name suggests, operates independently- as we’ll be looking into shortly.

The Number of people engaged in Direct and Independent Insurance Agencies. Source: Insurance Information Institute

These two are as different as summer and winter. The process of sourcing for possible insurance policies is completely different. And so is coverage management and claims.

Essentially, an independent insurance agency will handle you differently compared to a direct insurance provider.

That said, let’s get down to the nitty-gritty. What is an independent insurance agency? How does it operate? What should you expect as a customer?

What Is An Independent Insurance Agency?

Traditionally, insurance providers did not sell their policies directly to consumers. Instead, they offered them through third-party agents, who had to be professionally licensed. And the agencies, in turn, earned commissions for every insurance cover sold.

Then came the proposal to cut out the “middleman”. Consumers can now directly engage insurance companies, and conveniently purchase various coverage through the internet. As a matter of fact, 71% of consumers are now using the internet to search for insurance covers.

Purchasing Insurance Directly. Source: Jago Investor

To some, cutting out the “middleman” was a long time coming. It was expected that it would ease buying and make insurance cheaper.

On the flip side, directly engaging insurance companies is not so simple anymore. Their numbers are growing and comparing policies is getting harder.

Additionally, insurance legislation is getting more complicated at both the national and state levels. 2010, for example, saw the enactment of a rather drastic Dodd-Frank Wall Street Reform and Consumer Protection Act.

Evidently, keeping up with the dynamic insurance environment is becoming harder. So, how are you expected to have the knowledge to assess insurance companies?How will you even negotiate with seasoned sales representatives from these companies?

And that’s precisely where an independent insurance agency comes in. Instead of selling insurance from one provider, such agencies deal with a multitude of policies from different providers. Unlike captive agents, independent insurance agents are not tied to specific insurance companies.

Is there anything more valuable than an insurance expert who’s not loyal to any particular provider? That’s why it’s easy to score genuine insurance advice from independent insurance agencies. They act as intermediaries and do the hard work for you.

How an Independent Insurance Agency Operates

Think about it. One agency, multiple insurance companies, countless policy options. Seems like a lot of work. But that’s why they are not considered salesmen. They are more like advisers.

One interesting fact about an independent insurance agency is that it doesn’t actually work for the insurance company. The chief boss is you- the client.

Without the technical expertise, it would take you months to comprehensively evaluate the whole insurance industry. And that’s only if you’re doing it persistently. Compare that to simply getting in touch with an independent agent for quick advice on any type of insurance.

An independent insurance agency doesn’t just compare the costs of policies offered by various providers. Agents delve into the nitty-gritty, and advice their customers on the pros and cons of individual policies. Their familiarity with the providers’ histories and customer service is particularly handy when it comes to this.

Consider a highly ranked insurance provider, for instance. On paper, it may seem like a safe bet for all types of insurance covers. And you might commit yourself without additional research.

Even if you’re keen enough to seek more information, details could be scanty and inconclusive. An independent agent- on the other hand- would be able to identify such a company’s strong points. Plus its correspondingly weak policies right off the bat.

Sadly, working for you as opposed to the insurance company has a caveat. Independent insurance agencies cannot adjust your policy premiums. They can secure a good deal for you, but their role only ends at the negotiating table. Only insurance providers have direct control over various premium prices.

Having no direct control, however, doesn’t render them completely powerless. They engage providers to seek legitimate reasons for any premium increase.

Although some insurance premiums have appreciated exponentially over the past couple of years, the average annual growth rate in the U.S. is 3-5%. This usually caters to inflation costs and management costs.

Any increase past this standard growth curve attracts an extensive review by independent agents. Ultimately, they may advise you to switch to a cheaper, alternative plan.

Average changes in auto insurance premiums 2004-2014. Source: Quora

What To Expect From an Independent Insurance Agency

And now the big question. What should you expect from your independent insurance agency?

Countless Insurance Options

With 58% of commercial lines, 35% of personal lines, and 58% of all lines, independent insurance agencies represent the biggest chunk of the insurance industry.

Insurance Available Through independent Agents vs Captive Agents. Source: The Independent Agents & Brokers of America

Thanks to this, they always have a wide range of insurance options to consider.

Well, of course, you might argue that the internet is also a great tool to research and compare rates by different companies. It should be as easy as seeking different quotes, right?

This approach may indeed give you several quotes. But, isn’t crawling through the web, filling multiple applications extremely cumbersome? Plus, insurance quotes generated online tend to be erroneous more often than not. The providers will stereotype you as the average American consumer.

Independent agents, on the other hand, will keenly review your status and conditions before offering possible covers. Your needs eventually determine the options you settle for.

So let your agents do the shopping. You worry about the saving.

Professional Advice

Insurance is a business. Every provider is trying to make an extra dollar for every possible situation. So it’s literally impossible to get unbiased professional advice from one. Try seeking and you’ll end up talking to a captive agent eager to close a deal.

Compare that to licensed experts who are not attached to any specific insurance provider. They follow recent trends and completely understand the industry inside out. Even more importantly, they know exactly what to look out for within the fine print of policy T & Cs.

After analyzing your needs and interests, they offer professional advice to help you minimize your risk levels and premium prices. And the best thing about this relationship is that it’s permanent. You can always reach out with more questions to clarify grey areas.

Assistance With Claims

Filing an insurance claim can be difficult and challenging. It could be a nightmare if it’s your first time. Insurance providers do everything within their legal capabilities to save up on claims.

In the automotive world, for instance, the average auto insurance claim is $3,160.

Average Cost Per Auto Insurance Claim. Source: Guiding Metrics

Going by average industry estimates, you’ll be filing a collision claim every 17.9 years. That translates to about 2-4 times per person in a lifetime.

Unfortunately, most insurance policies are in a complicated legal language. So it might take you some time to break it all down and file a solid claim. Overlooking the fine print could lead to an unfair compensation. To make matters worse, your premiums might also be bumped up significantly after the payout.

But working with an independent insurance agency gives you a strong advantage. They know the paperwork and all the dirty, little tricks providers use to finesse their way out of possible payouts.

Their experience in these processes is, in fact, way more critical during the initial application process. The agents will help you avoid companies that could prove to be difficult in case of a claim.

Updates on Discounts

Insurance companies are particularly fond of marketing themselves through discounts. They promise multiple deductions, only to decline applications based on “technicalities”.

Fortunately, this doesn’t apply to all providers. Genuine discounts exist. And most times, you have to meet specific criteria to qualify. That’s where independent insurance agencies come in.

Your agency understands your life and insurance variables. So they’ll update on possible discounts you could qualify for. Then guide you through the whole application process.

For example, if you have several covers from one provider, your agency could help with applying for a multiline discount. This could save you more money than cheap covers from different providers.

Conclusion

To recap:

● As of 2016, there were 5,977 insurance companies in the U.S, with a driving force of 2.6 million workers.

● There are two principal types of insurance companies- direct and independent.

● A direct agency is run by captive agents, while an independent agency, as the name suggests, operates independently.

● 71% of consumers are now using the internet to search for insurance covers.

● Instead of selling insurance from one provider, independent insurance agencies deal with a multitude of policies from different providers. Unlike captive agents, they are not tied to specific insurance companies.

● An independent insurance doesn’t actually work for the insurance company. The chief boss is you- the client.

● Independent insurance agencies cannot adjust your policy premiums. Only insurance providers have direct control over various premium prices.

● Independent agents engage providers to seek legitimate reasons for any premium increase.

● With 58% of commercial lines, 35% of personal lines, and 58% of all lines, independent insurance agencies represent the biggest chunk of the insurance industry.

● Independent agents review your status and conditions before offering possible covers. Your needs determine the options you settle for.

● Independent insurance agencies follow recent trends and completely understand the industry inside out. They know exactly what to look out for within the fine print of policy T & Cs.

● After analyzing your needs and interests, independent agents offer professional advice to help you minimize your risk levels and premium prices.

● Independent agencies know the insurance claim paperwork and all the dirty, little tricks providers use to finesse their way out of possible payouts.

● Your agency understands your life and insurance variables. So they’ll update on possible discounts you could qualify for. Then guide you through the whole application process.

Feel free to your expectations and experience with independent insurance agencies.