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

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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 | No 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 | No 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 | One Comment

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.

Commercial Insurance Explained in 2018

By | Business Insurance | No Comments

Business insurance is going up and we are here to explain why and potentially how much.

“Wait till legislation lands on insurance companies and the market will turn”

“Improved auto technology and infrastructure will reduce accidents and corresponding insurance rates”

“Increased availability of medical services and cheaper commercial cars will make insurance cheaper”

These have been sentiments on one side of the spectrum for quite some time now.

We all know commercial auto insurance policies have been steadily climbing for a couple of years. And sadly, the trend doesn’t seem to be slowing down.

Since consumers have been complaining, insurance providers must be having a ball, right? Indications show that they are possibly laughing all the way to the bank.

After all, we haven’t seen many claims lately, right?
Interestingly, sentiments have been the same for commercial insurance providers. They are also complaining about current premium rates.

According to a report released by Fitch Ratings Inc, the commercial auto sector has been recording losses since 2010.

2016 was particularly poor, with the worst underwriting performance since 2001. Evidently, insurance companies are not doing as well as we thought

Commercial Auto Insurance Providers’ Losses. Source: Trucks

While we acknowledge that the bulk of providers have recorded losses, we can’t deny one simple fact. Commercial vehicles are progressively becoming safer.

That is the bottom line. Elemental improvements like lap belts, padded dashboards, and breakaway steering wheels paved the way for advanced safety features.

Modern trucks are now coming with auto-braking systems, stability control, head-protecting airbags, three-point harnesses, and anti-locking brakes.

As a matter of fact, according to recent crash tests, one fleet was able to use collision-mitigation technology to reduce rear-end crashes by about 70%.

Additionally, they established that the tech further minimized the severity of the remaining 30% of crashes.

Safety Ratings of Selected Trucks. Source: TFLTruck

Well, of course, these commercial vehicles may still not be accident-proof, but crash tests have proven that they are indeed safer.

And since insurance providers have always kept a close eye to such developments, consumers continue to expect substantially lower pricing.

All things considered, there seems to be a disconnect. Commercial vehicles are now safer than ever before. But insurance pricing is still rising owing to increased losses by providers.

So, will this continue in 2018? Or will developing trends, coupled with evolving legislations make commercial insurance cheaper?
To demystify this whole issue, let’s look at the current position of the industry. Then subsequently establish factors that will be affecting pricing in 2018.

The Commercial Insurance Industry Today

The 20th Century saw increased development of road networks and overall infrastructure in the U.S.

The last quarter was particularly interesting, as it started a transportation trend that persisted for a couple of years.

Americans were making good money and buying vehicles, plus gas prices were relatively low.

Consequently, the number of miles traveled kept rising every year until 2008.
Then the great recession came with a wide range of consequences, among them reduced travel.

With funds not readily available in the economy, commercial trucks were not moving around as they previously did.

And this outlasted the recession until 2012 when mileage started rising again.
The growth has been exponential since then, and it’s seemingly not slowing down anytime soon.

Total Miles Driven in the USA. Source: Verisk

In 2016 alone, Americans drove a total of 3.1 trillion miles thanks to gas prices decrease and improved economy.

Commercial vehicles continue to contribute substantially to these figures.
Under normal circumstances, an average commercial driver moves around way more than his private counterpart.

Now review that from a provider’s perspective. More mileage translates to increased risk of accidents and mechanical failure.

Eventually, they end up offsetting this by periodically revising and increasing standard commercial premiums.

Speaking of auto accidents, it’s indeed true that manufacturers continue to produce safer commercial vehicles.

But, look at the bottom line again – With mileage still rising, it’s expected that the number of accidents will record a similar trend.

Additionally, even with current traffic legislation, Americans have never been known to be the most careful drivers.

True to this, accident frequency is currently at its highest in the U.S. In 2015 alone, there were 4,311 large trucks and bus accidents across the country.

Compared to previous years, that translates to 26% increase since 2009.

Accident Frequency. Source Verisk

According to National Safety Council estimates released in 2017, the year 2016 was the deadliest yet in a decade. As many as 40,000 people lost their lives, marking a 6% rise from 2015.

Now let’s analyze that against miles traveled. From 2014 to 2015, the number of accident fatalities per 100 million miles traveled by buses and large trucks increased by 1.7%.

It’s evident that an increase in mileage translates to a corresponding growth in the number of accidents and deaths.

All things considered- administrative expenses, property damage, medical expenses, and losses in productivity and corresponding wages- the cost of auto accidents in 2016 was $432 million.

While fatalities rose by 6% compared to the previous year, financial losses marked a double increase of 12%.

Of course, such a trend never goes down well with insurance companies. And that’s one more reason why 2017 saw an increase in auto insurance premiums across the board.

But despite that, commercial auto insurance providers have hit depths the industry hasn’t experienced in 15 years.

By the end of 2016, the commercial auto combined ratio stood at 110.4, recording a 1.6% rise from 2015.

When the industry thought things couldn’t get worse, 2016 was marked by an even lower underwriting performance.

So, considering how recent years have gone down, can we expect a bright spot for both commercial insurance providers and consumers in 2018?

Commercial Insurance Pricing Outlook in 2018

If you feel commercial insurance rates have been unfair in 2015, through 2016 and 2017, there still isn’t much good news for you in 2018.
Yeah, of course, insurance providers like to market themselves as “protectors” of liabilities.

They always seem like they are willing to sacrifice their resources for your benefit.

But, at the end of the day, they are all businesses, not charities. And the principle mantra for any business is profits.

So, unless commercial vehicles drastically reduce their travel distances and maniac drivers suddenly reform, expect to pay a little more for your commercial auto insurance over the next 12 months.

The rates all through 2018 will be determined the recent proportions of expense to revenue, commonly referred to a “combined loss ratio”. Usually, it’s all good for a company until the ratio hits 100%.

At that stage, the insurance provider is breaking even. Anything above that, therefore, signifies losses.

The company is essentially losing way more than it’s making from the premiums paid.

Let’s look at recent ratios across the top 10 auto insurance companies.

Top Insurance Companies Compressed Loss Ratios. Source: ValuePenguin

Now, please note that these are supposed to be the crème de la crème of insurance businesses.

It’s where you’d most probably place your money if you thought about investing in auto insurance.

Going by past trends, they are the most profitable in this sector.

But, surprisingly, only two of them made a profit in 2016- and just barely. Cumulatively, they all add up to an average compressed loss ratio of 107.1%.

Makes you wonder where other smaller companies lie. That’s really bad not just for auto insurance providers, but also consumers- including commercial clients.

Some people have argued that they should recover by only penalizing commercial drivers who’ve been in accidents in the past.

Unfortunately, it’s not that simple. The situation is so dire that your rates will still go up even if you’ve never actually been a mile away from an accident.

That’s the only way they’ll be able to progressively bring their ratio back below 100%.

If the current situation was anything like how it was back in 2010, we’d be dealing with different projections. 2010 was the exact opposite.
8 of the leading auto insurance companies were operating within comfortable profit margins.

Only 2 of them recorded combined loss ratios of over 100%, consequently marking an average of 99.7%.

Recent Underwriting Profit Margins. Source: ValuePengiun

Auto-insurance companies, including commercial providers, have been recording losses for the past six years. Even more surprisingly, they’ve lost more money every time they review their rates against losses.

That said, 2018 will see commercial insurance providers not just bump their premiums up.

They’ll possibly do so with the highest margin yet. Only the long-term future could be holding promising prospects for commercial auto insurance clients.

Long-Term Commercial Insurance Outlook

It’s difficult to accurately predict the future of commercial auto insurance.

Expert projections on patterns are still a bit sketchy.

The price of oil could continue falling as more people switch to electronic commercial vehicles. The latter is especially expected to be significantly cheaper to acquire and maintain.

Over time, that translates to more commercial drivers and higher chances of accidents. As we’ve seen in the past, this could negatively affect commercial insurance pricing.

On the bright side, however, there is little doubt that the adoption of autonomous vehicles will gradually reduce the average premiums.

According to research by Stevens Institute of Technology in collaboration with Accenture, almost 10% of U.S registered vehicles will be fully autonomous by 2035.

The rest, of course, will mostly be semi-autonomous, with advanced safety features. Even the heaviest commercial vehicles will have short braking distances, and crash-avoidance artificial intelligence.

Since as many as 95% of traffic accidents are attributed to human error, such trends could trigger a major shift in the entire auto industry.

The severity of accidents will also drop, and competition between insurance providers will peak as numbers of specialized companies rise.

Ultimately, we may see a significant drop in commercial premiums, as companies begin adjusting them according to actual risks.

As a matter of fact, this may start happening as soon as 2026. That’s when large numbers of autonomous cars will begin hitting the streets.

Conclusion

To recap:
● According to a report released by Fitch Ratings Inc, the commercial auto sector has been recording losses since 2010. 2016 was particularly poor, with the worst underwriting performance since 2001.

● Commercial vehicles are progressively becoming safer. But insurance pricing is still rising owing to increased losses by providers.

● According to recent crash tests, one fleet was able to use collision-mitigation technology to reduce rear-end crashes by about 70%. They established that the tech further minimized the severity of the remaining 30% of crashes.

● The number of miles traveled kept rising every year until 2008.

● This outlasted recession until 2012 when mileage started rising again. The growth has been exponential since then.

● In 2016 alone, Americans drove a total of 3.1 trillion miles.

● With mileage still rising, it’s expected that the number of accidents will record a similar trend.

● In 2015 alone, there were 4,311 large trucks and bus accidents across the country. Compared to previous years, that translates to 26% increase since 2009.

● As many as 40,000 people lost their lives in 2016, marking a 6% rise from 2015.

● From 2014 to 2015, the number of accident fatalities per 100 million miles traveled by buses and large trucks increased by 1.7%.

● The cost of auto accidents in 2016 was $432 million.

● By the end of 2016, the commercial auto combined ratio stood at 110.4.

● Top 10 auto insurance providers added up to an average compressed loss ratio of 107.1% in 2016.

● The situation is so dire that your rates will still go up even if you’ve never actually been in an accident.

● There is little doubt that the adoption of autonomous vehicles will gradually reduce the average premiums.

● Almost 10% of U.S registered vehicles will be fully autonomous by 2035.

● Since as many as 95% of traffic accidents are attributed to human error, such trends could trigger a major shift in the entire auto industry.

● We may see a significant drop in commercial premiums, as companies begin adjusting them according to actual risks.

Going by these facts, what do you assume you’ll pay your commercial auto insurance provider over the next 12 months?

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.

How Your Auto Insurance Policy is Ripping You Off – And What to Do About It Right Now.

By | Auto Insurance | No Comments

Insurance has always been one of the most controversial subjects in the auto world. Of course, we appreciate the fact that it’s compulsory in all the 50 states. Because otherwise, imagine paying your medical bills, and probably even compensating other victims after an accident.

On the flipside, it seems like players in the insurance industry are having a ball, now that it’s impossible to avoid car insurance. Even with over 4.5 million vehicle accidents resulting in property damage, 1.7 million injuries, and 32,000 annual fatalities, insurance companies are still raking in huge profits.

Number of vehicle crashes per year. Source: Statista

Between the year 2011 and 2015, companies in the auto-insurance space lost more than $145 billion, mostly due to insurance fraud. But, it barely made an impact in the industry. Insurance firms are still pouring billions of dollars every year in television ads and digital media. Everyone is loving the status quo- except you, the consumer.

Annual Costs of Insurance Fraud. Source: Ohio Insurance Institute

If you’ve had that feeling in the pit of your stomach that auto insurance companies are probably taking advantage of you, you’re right. You’re only slightly wrong on the part about auto insurance companies. Because it’s not just them. It spreads across the board.

Everyone is ripping you off- from insurance companies, to vehicle repair shops, property agents, and even medical providers. While some blatantly defraud you, most of them are ripping you off legally. They capitalize on some interesting loopholes in the current legislation.

Take Michigan Auto Insurance Policy laws, for instance. Vehicle owners in this state pay the highest premiums in the country, so medical providers can pretty much charge exorbitantly for their services.

Whichever way you look at it, that has been how the bulk of their claims have been ending up.

Because of such cases, a third of millennials and 28% of vehicle owners in the U.S. believe that they are paying way too much for their auto insurance. The insurance companies are particularly fond of leaching off high-income earners since they are not frequent complainers.

Only 24% of vehicle owners earning more than $75,000 per year are not happy with their rates. Compare that to 37% of modest income drivers with income ranging between $50,000 and $75,000 per annum.

There are many interesting facts behind the smoke and mirrors. That’s why we’ve prepared the following guide, to help you finesse your way out of possible rip offs.

How Insurance Companies Are Ripping You Off

Failing To Factor In Car Depreciation

Unless you’re rocking an exceptional classic car, the value of your vehicle is consistently losing value with time, and every mile driven.

But some insurance companies don’t see it that way. You still continue paying the same premiums, even after your car has lost half its value.

Vehicle Depreciation Rates in The U.S. Source: Automotive Fleet

Insurance agents who support this concept argue that aging and increased mileage translates to more frequent repairs, and increase the risk of accident due to mechanical failure.

Well, of course, that’s laughable because, in actual sense, repair costs decrease with increase in a car’s age. Parts become readily available and mechanics continue to familiarize themselves with engine intricacies.
The best and most efficient way to beat this system is switching to ask your insurance agent to revisit your policy. Don’t waste your time, allow an independent agent to shop for your insurance.

Your independent agent will have multiple insurance companies assess your vehicle and charge you cheaper premiums according to its age. sticking to one insurance provider could have you losing way too much in 12 months, let alone 5 or 10 years.

Dramatically Increasing Rates After Accidents

If you assumed insurance providers hate car accidents, think again. Of course, they lose money by paying out claims.

But they immediately start recovering their losses by increasing your rates. And sometimes they even make more off you after an accident.
It’s a continuous, unending cycle. Insurance firms make a lot of money off your premium payments.

Then you’d be mistaken to assume that you’ve won the battle, when you receive compensation from cumulative payments. But when that is over, they increase rates as soon as you get behind the wheel again.

All things considered, this may be fair, since it covers an insurance company’s risk of insuring accident-prone drivers. But, in some cases, rates do not climb over time.

They shoot through the roof, punishing you for the accident. It may apply even to incidents which may not even have been your fault in the first place.

Average Insurance Penalty For Not-At-Fault Accidents. Source: Consumer Federation of America

This game is especially common among insurance providers who offer very cheap rates at the beginning. And you since you’ll assume that they are still the cheapest around, you’ll stick with them despite the high rates.

The only way around this is comparing rates offered by different insurance providers. Some companies may be lenient enough to provide coverage at way cheaper rates.

While this may seem like a pretty obvious thing to do, 38% of vehicle owners have not bothered to compare their auto insurance premiums within the last 3 or more years.

That’s according to NerdWallet, a personal finance website that sampled motorists across the country. Even more surprising is the fact that 17% of these drivers have never checked at all.

As a result, they are missing out on an average of $417 of savings per year. This is silly considering an insurance agent could do the legwork for effortless savings.

Evaluating Rates According To Credit Worthiness Rather Than Driving Habits
If there’s one outrageously ridiculous thing about insurance pricing evaluation, it’s the fact that it’s partly based on credit score. This is one area that you may end up mistaking an insurance company for a bank. They act like insurance claims are loans and financial grants.

Even a good and careful driver may end up paying high rates for a poor credit score. It’s even more amusing when you discover that poor, careless drivers with good credit scores pay lower insurances rates.

And no, this doesn’t just bump the rate up by a few bucks. Going by figures published by Consumer Reports, penalties for poor credit scores are staggering.
Crunching the numbers across the top five national insurers, they established that motorists with excellent credit scores were paying an average of $1409 annually, while good credit score drivers were shelling out $1712. Individuals with the poorest credit scores were paying an astonishing $3826 every year.

Unfortunately, apart from improving your credit score, there’s no other way of finessing your way out of this. It’s almost like the United States is hell-bent on basing everything on credit score. Soon they may even start issuing driving licenses according to creditworthiness.

Rejecting Claims On Incidences Affecting Pre-Existing Injuries

The subject of pre-existing conditions and injuries is not limited to auto insurance policies. All insurance providers, across all industries, always have a clause on pre-existing conditions. No company wants to be held liable for past injuries.

In layman terms, they don’t see themselves making a profit. And that’s understandable. Because whichever way you look at it, insurance is still a business.

But, there is a rather interesting grey area in this. Imagine an accident that aggravates a past injury or condition.

Consider a person paralyzed from the waist down for instance. A car accident may snap his spine further, causing paralysis from the chest down.

Now, of course, most auto insurance firms would counter the resultant claim, citing the clause on past injuries. If he’s not keen in following up, the victim may end up with zero compensation.

Fortunately, insurance legislation addresses this, through the “Glass Plaintiff” rule. The frailty of a victim is not a defense in a claim case.

That means you are entitled to full compensation if a vehicle accident aggravates a pre-existing injury.For fair compensation in future, have your doctor comprehensively document current injuries that your insurance company is aware of. In case of an accident, your insurance provider will have a hard time rejecting a claim on grounds that pre-existing injuries were not affected.

Offering Unnecessary Coverage On Rental Cars

If you’ve rented a car before, chances are salespeople pressured you to cough up extra cash for insurance. At first, it may seem like they are trying to protect their vehicles, or they care about your safety.

Sadly, it can never be further from the truth. Rental car salespeople get commissions from insurance companies for every cover sold.

That’s why they’ll never reveal that you won’t actually benefit much from most their insurance covers.

As a matter of fact, most salespeople continue pressing, and persistently offer alternative insurance plans if you reject their propositions. In the end, you’re forced to cave in and say yes because extra cover would hurt, now would it?

Reviewing and researching on such insurance covers would ultimately reveal that you probably didn’t even need them. You would have bought useless insurance, at rates higher than standard market premiums.

If you own a car with its own insurance plan, don’t even entertain the thought of insurance for rented vehicles. You’re already adequately covered.
That’s because rental car salespeople focus on two types of insurance covers:

  • Liability Insurance at $5 to $15 a day. It should cover damages to third party vehicles and people caused by the rental car.
  • Loss Damage Waiver (LDW) at $10 to $20 a day. It should cover the damages you might cause to the rented car.

Of course, these are very much essential to rented cars. We are not suggesting that you proceed to get a rental without both. However, your car insurance plan extends to cover these two.

They come with most auto insurance plans and adequately apply to rentals.
So, to avoid paying for unnecessary coverage, check with your current policy and confirm its boundaries and exceptions before approaching a rental car company. That way, you’ll be able to discern factual information from sales jargon by the attendants.

Conclusion

We’ve discussed many critical pointers. To help you remember, here’s a breakdown of the most important ones:

  • Even with over 4.5 million vehicle accidents resulting in property damage, 1.7 million injuries, and 32,000 annual fatalities, insurance companies are still raking in huge profits.
  • Between the year 2011 and 2015, companies in the auto-insurance space lost more than $145 billion, due to insurance fraud.
  • Everyone is ripping you off- from insurance companies to vehicle repair shops, property agents, and even medical providers.
  • A third of millennials and 28% of vehicle owners in the U.S. believe that they are paying way too much for their auto insurance.
  • Only 24% of vehicle owners earning more than $75,000 per year are not happy with their rates.
  • 37% of modest income drivers making between $50,000 and $75,000 per annum complain about their insurance rates.
  • Get quotes every 6 months to a year from multiple insurance companies. Contact our independent insurance agents if you don’t have time to do it yourself.
  • Insurance companies start recovering their losses by increasing your rates immediately after compensation. And sometimes they even make more off you after an accident. Shop for a new policy or have an agent do this for you to minimize the increase in your premium.
  • 38% of vehicle owners have not bothered to compare or have an agent compare their auto insurance premiums within the last 3 or more years. As a result, they are missing out on an average of $417 of savings per year.
  • Even a good and careful driver may end up paying high rates for a poor credit score.
  • If you have bad credit, you are paying 2.7 times more than a driver with excellent credit.
  • Through the “Glass Plaintiff” rule, the frailty of a victim is not a defense in a claim case. That means you are entitled to full compensation if a vehicle accident aggravates a pre-existing injury.
  • If you own or lease a car, your insurance covers your rental.

Although we’ve covered the major rip-offs, the auto insurance industry is extensive. And so are the laws regulating it. Different stakeholders continue developing new tactics to capitalize on the loopholes. So please feel free to share the ones we’ve not mentioned.

License plate that says "home" with the outline of the state of michigan as the "O"

Michigan Auto Insurance Bill: What to Expect it to Do to Your Auto Insurance

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Michigan Auto Insurance Bill: What to Expect it to Do to Your Auto Insurance

Michigan has graced the news many times recently. Yeah, of course, the state is still considered the car capital of the world. But this time around, it continues to enjoy the limelight because of “No-fault Insurance”.

But why should it concern you?

According to Crain’s Detroit Business and Bridge Magazine analysis, the average cost of treating vehicle accident injuries has tripled between the year 2000 and 2013. Compared to the next highest state, the average cost in Michigan is now more than five times higher.

Let that sink in for a minute. That only covers the next highest state, New Jersey. Now imagine what you stand to incur in case of auto accident injuries in Michigan. Compare that to the lowest ranked states- like Utah for instance.

This cost has been increasing 90% faster than the nation’s health care inflation. If you thought that’s as bad as it gets, here’s something even more surprising. This has occurred over a period that has seen a reducing number of car accidents.

In actual figures, the average medical cost is now north of $75,000. Medical providers can pretty much charge anything they think they can get away with. And it’s all because of the current no-fault insurance law, plus a 2010 Michigan Supreme Court ruling.

That’s unfair not only to drivers, but also insurance companies.

Even when the state forces you to pay for injury protection, insurance providers are not raking in the dough. Only medical providers have been making a killing.

As a matter of fact, the average profits for auto insurance providers over the same period has been -2.09%.

Current Michigan No-Fault Auto Insurance Legislation

The state of Michigan takes auto insurance very seriously. To qualify for license plates, you need to have certain essential coverages. Among them is No-fault insurance. And that’s where the problem lies.

But, what does it entail? What are its limits?

The best thing about this type of insurance is that it takes care of several expenses. Besides to third party property damage, replacement and wage loss, it settles medical bills.

You’ll pretty much not be liable to victim compensation even when you take the blame for the accident. Your insurance provider will handle it all.

Sadly, that’s where it all ends. Despite an average annual premium of $2,484 per vehicle, Michigan drivers do not qualify for vehicle repairs. That’s a separate coverage altogether.

So, what exactly do you get as a driver?

The basic No-fault policy only addresses three elements:
● Residual Liability Insurance- Injury and Property Damage

The legislation protects you from legal action for causing a car accident. Unfortunately, it does not apply to all situations. There are specific unique circumstances that leave you vulnerable to litigation.

If the accident, for instance, results in someone being permanently disfigured, severely injured, or killed, you may be in for some legal trouble.

It will also not apply if other parties involved are non-residents of Michigan, or were driving a car not registered in the state. And this, unfortunately, also extends accidents that occur past the state’s borders.

You can also be sued for up to $1000 if an accident results in damages to an uninsured third party vehicle, in a situation where you are at least 50% at fault.

● Property Protection (PPI)

Your insurance provider is expected to pay up to $1 million for damages your car causes to other appropriately parked vehicles, and property like fences and buildings.

● Personal Injury Protection (PIP)

Although the insurance company will not repair your vehicle, it should take care of all your medical expenses. You also deserve compensation of up to 85% of your standard income for three years. And that’s only if the consequent injury affects your ability to work.

As with all insurance policies, there’s a caveat. Effective 1st January 2017, the largest amount an insurance company can pay you on a monthly basis is $5,541. That’s the precise amount your family is also entitled to on a monthly basis if you’re killed in a road accident.

To cater for regular household services like yard work and housekeeping, you would also be eligible for a stipend of up to $20, subject to severity of the injury.

Proposed Changes To Michigan No-Fault Auto Insurance Legislation

Of course you’d expect the proposed bill to improve current legislation. The reality, unfortunately, is that it’s rather a cocktail of both positives and negatives.

One of the most outstanding unfavorable clauses applies to Personal Injury Protection. House Bill No. 4488 seeks to do away with insurance companies paying full medical expenses.

PIP is the most critical element of the current law. It benefits Michigan drivers through life benefits, and uncapped medical payouts. But the new bill’s proponents thought they should give insurance providers a break. So they suggested limiting payment of medical expenses at $250,000, 500,000, and 1,000,000.

Another prominent change is the introduction of a limit of 56 hours per week on the time family members and friends of injured victims are entitled to payment for attendant care. Currently, there is no limitation on this. And that makes sense, because some injuries may need full time care.

Insurance companies like the fact that these two changes complement each other. The medial expense cap would force you to turn to friends and family for nursing. And that’s right where insurance providers would want you to be. The 56-hour attendant care limitation, in the end, would further reduce their payouts.

As if that’s not enough, the bill further proposes the creation of a “Fraud and Theft Prevention Authority”. It’s supposed to have 15 members. 9 of whom should be insurance company representatives, 2 law enforcement agents, 1 prosecuting attorney representative, and 1 general public representative. Pretty much a recipe for a committee controlled by insurance companies.

The authority would fight insurance fraud committed by policyholders and other stakeholders. Well, that’s arguably noble, since the biggest auto insurances fraud cases involve No-fault insurance- at least according to the Coalition Against Insurance Fraud.

In 2012 for instance, federal law enforcement agents took in more than three dozen fraudsters suspected of making away with more than $280 million from fake claims.

So on paper, the authority looks like a much needed body. Well, at least until you review the fine print.

That committee would be multi-faceted. It would not only reign down on fraudsters, but also enact new rules and regulations. One can only imagine the ultimate result- more restrictions on filed claims.

On the flip side, you’d expect the Fraud Authority proposal to cut both ways. But, it’s skewed against policyholders. Claimants will not have a right to sue insurance providers for fraud against them.

That, and the fact that we already have the National Insurance Crime Bureau, plus federal law enforcement agencies, beats the whole purpose of forming such a committee. It doesn’t make any logical sense.

Looking at these proposed changes, you’d expect a clause on reduced insurance premiums. It would possibly mitigate potential outcomes of all the other provisions favorable to insurance companies.

Strangely, and rather surprisingly, the bill contains nothing that guarantees reduced insurance premiums for Michigan drivers.

It’s pretty much a bill by insurance companies, and for insurance companies, triggered by the ever rising claim payouts. According to data obtained from the Michigan Insurance Coalition, No-Fault claim payouts more than tripled between the year 2000 and 2012.

Status of The Michigan Auto Insurance Bill

After years of attempting to change Michigan auto insurance legislation, the latest efforts crashed and burned. The House voted down the No-fault bill on Thursday, the 2nd of November 2017.

It fell short of the required support to pass the floor. It could not survive, even after 41 republicans and 4 democrats voted for it,

According to a disappointed Michigan representative Tom Barrett, there was persistent pressure on democrats to reject the proposed bill. Singh, the minority leader, had reportedly issued a myriad of threats to sway the vote.

Barrett felt that pressure was coming from institutions that enjoy status quo. He insisted that hospitals were chief lobbyists. Proposed changes would only hurt their bottom lines.

Michigan Health and Hospital Association’s Chris Mitchell, on the other hand, stated that the bill collapsed because it is entirely flawed. It has loopholes that insurers would capitalize on to avoid providing rate relief.

Another party that opposed the amendments is the Coalition to Protect Auto No-fault (CPAN). According to Steve Sinas, a member, insurance companies would win court cases. They would then deny individuals their benefits, and sue them for refund of attorney fees.

All things considered, the bill collapsed, but the debate is far from over. Legislators are still getting opinions from Michigan residents and other industry stakeholders.

The bill could come up for another vote soon. We can only hope that it’ll be multi-dynamic, and inclusive of all the concerns raised by medics, insurance providers, and policyholders.

Conclusion
To recap:
● The average cost of treating injuries caused by vehicle accidents has tripled between the year 2000 and 2013

● Compared to the next highest state, the average cost in Michigan is now more than five times higher.

● Medical providers can pretty much charge anything they think they can get away with. And it’s all because of current no-fault insurance, plus a 2010 Michigan Supreme Court ruling.

● In a bid to resolve all this mess, a republican legislator introduced House Bill No. 4488 in April 19, 2017, aimed at changing the current No-fault policy.

● Despite an average annual premium of $2,484 per vehicle, Michigan drivers do not qualify for vehicle repairs. That’s a separate coverage altogether.

● Residual Liability legislation protects you from legal action for causing a car accident. But there are specific unique circumstances that leave you vulnerable to litigation.

● Under Property Protection (PPI), your insurance provider is expected to pay up to $1 million for damages your car causes to other appropriately parked vehicles, and property like fences and buildings.

● Personal Injury Protection (PIP) should take care of all your medical expenses. You also deserve compensation of up to 85% of your standard income for three years. And that’s only if the consequent injury affects your ability to work.

● One of the most outstanding unfavorable clauses applies to Personal Injury Protection. House Bill No. 4488 seeks to do away with insurance companies paying full medical expenses.

● Another prominent change is the introduction of a 56-hour-per-week limit on attendant care.

● The bill further proposes the creation of a “Fraud and Theft Prevention Authority”. It’s supposed to have 15 members.

● The bill contains nothing that guarantees reduced insurance premiums for Michigan drivers.

● No-fault bill rejected on Thursday, the 2nd of November 2017.

Taking all these into consideration, the Michigan Auto Insurance bill has undoubtedly attracted mixed feelings from all stakeholders. But one thing remains constant- the current legislation is extensively flawed, and desperately needs an overhaul.

So what do you think? And what amendments would you propose for the next debate

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3 Myths About Auto Insurance BUSTED

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3 Myths About Auto Insurance BUSTED

You probably rarely ever think of auto insurance. Of course, that is until you see those flashing red and blue lights in your rearview mirror. Or some idiot sideswipes you on the interstate.

Suddenly, your car insurance dominates your mind. That’s when the questions start circling.

Did I renew my auto insurance?
Am I adequately covered?
What is my auto insurance deductible?
How quick will they process my claim?
Will my car insurance premiums go up?

Fact is, most people don’t have a clear picture when it comes to their auto insurance. They are fuzzy about what their insurance covers. They don’t know their deductible. And they certainly have little knowledge about how they can save on their auto insurance.

That’s why we’re happy to present this blog post. In it, we will separate FACT from FICTION when it comes to your car insurance questions. Plus, you may even discover a few ways you can save when it comes to your automobile insurance premiums.

Let’s start here:

MYTH # 1: Men and Women Have the Same Auto Insurance Rates

In an age where men and women are considered equal, you would think our premiums should be equal as well. Well, that’s often not the case.

Now, the age old debate of “Which sex is the better driver?” has been answered by the insurance industry. And the winner is…

The Ladies!

Here’s a little behind-the-scenes glance at how insurance companies operate. They have a bunch of PhD’s that examine every possible factor that might result in paying out a claim.

One major factor is gender, especially when you’re a young driver. They examine everything top to bottom, including:

· Types of cars driven by men and women — Men tend to drive sportier and faster cars while women often drive safer vehicles.
· Statistics about risky driving behavior — That’s another ding for you men. More women drive more conservatively than men. Men are 3x more likely to get ticketed for reckless driving compared to women!
· Frequency of accidents — Men, guess what… yes, you’re simply losing this battle. When comparing the accidents the ratio is 12 to 5 in favor of the fairer sex.
· Average number of miles driven per year — Yes, men simply drive more often and more miles. Although the number of drivers is about equal (up from 40% females), men still account for 59% of miles driven on the road.

Let’s dig even deeper at the men drivers vs. women drivers debate and look at some statistics.

Let’s dig even deeper at the men drivers vs. women drivers debate and look at some statistics.

· In 2012, 71% of all car accident-related deaths were men according to Insurance Institute for Highway Safety.
· In 2008, the number of drivers who died in a fatal car crash was 50% higher for men than women.
· Men are more likely to be under the influence of alcohol than women — 38% for males compared to just 20% for females.

Theories and stereotypes can’t compare to hard cold facts. And the facts all point to the fact that men are a greater risk behind the wheel then women.

As a result, it stands to reason that under many auto insurance policies, women get more of a break than men. Find out for yourself. Get a quick auto insurance quote today, and see how much you can save.

MYTH # 2: What You Do for a Living Has Nothing to Do With How Much You Pay for Car Insurance.

While it may seem like “big brother” is watching over you, the auto insurance industry makes an effort to know its client base so it can better assess its risks.

Therefore, they want to know quite a bit about you, including:
· Your driving history
· Your age
· Your gender
· Your driving habits

Plus, many car insurance providers are even taking a close look at your occupation and education. Yes, your education level as well as what you do for a living are factors that could determine just how much you pay for car insurance.

There are certain occupations that put you at a greater risk to drive a car, truck or SUV. As a result, you may be more likely to get into an accident and file a claim.

There are certain occupations that put you at a greater risk to drive a car, truck or SUV. As a result, you may be more likely to get into an accident and file a claim.

Some of those risks include:
· Greater stress levels
· Likelihood of overtime
· Lack of sleep
· Amount of time behind the wheel

So, what are these high-risk occupations? Well, the list varies from one insurance provider to another, but here are among the most common:
· Doctors
· Salespeople
· Lawyers
· Real estate agents
· Business owners and executives
· Architects

I bet you’re wanting to know the other side of the coin: The safest occupations. Jobs that tend to show statistically low risk of accidents among drivers in those professions are the following:
· Scientists
· Nurses and first responders
· Pilots
· Teachers
· Accountants
· Artists

You might be wondering WHY?

Well, these professions typically require someone who is detail-oriented and very stable. Therefore, they’re less likely to be involved in an accident.

If you’re not on the high-risk list, rest assured that your occupation should have little to no effect on your insurance risks and auto insurance premiums.

If so, feel free to check with us today to see if you are subject to a slightly lower premium based on your job field.

MYTH # 3: It Makes No Difference Where I Live. It’s All About How I Drive.

When we think of auto insurance, we typically ONLY think of accidents, tickets and our driving history. After all, if you’ve never been in an accident, had only had a couple of minor traffic citations and have a spotless driving history, you should be good… RIGHT?

If that describes you, then yes, your auto insurance premium should be among the lowest in an average field.

However, you can’t simply ignore the possibility of car theft. Yes, in the insurance world, car theft is even worse than an accident because the insurance company is on the hook for the ENTIRE vehicle replacement.

So, let’s take a closer look at some of today’s sobering car theft statistics.

First, where you live DOES matter. There are many cities where car theft is on the rise. Here are the top 10 cities for vehicle theft:
· #10 – Seattle, Washington
· #9 – San Jose, CA
· #8 – Spokane, Washington
· #7 – Fresno, CA
· #6 – Milwaukee, Wisconsin – This is the only metro area that’s NOT in the western half of the US
· #5 – Stockton, CA – Are you sensing a trend? Don’t move to California.
· #4 – Bakersfield, CA
· #3 – San Francisco, CA
· #2 – Modesto, California – Yes, this list features a bunch of cities from Cali.
· #1 – Albuquerque, New Mexico – Car thieves tend to take the stolen vehicles across the border to sell them

Of course, if you think you’re in the clear by living in Michigan, think again. Car theft has always been a problem throughout Michigan, especially in metro areas. In 2016 Detroit reported 8,500 auto thefts, which is 23 cars day.

Not only does it matter where you live… where you park is also a big concern. Think about it. Many vehicle thefts don’t occur in your driveway. They occur in parking lots, in parking garages and at your workplace.

If you tend to park your car in a zip code that’s known for auto theft, you might just find that your auto insurance quote goes up a bit.

But if you live in a suburban area with few car thefts… if you work in an office park with lots of security cameras and few (if any) vehicle break-ins… if you are always cautious of where you park your car, you may just enjoy a little break on your auto insurance.

Plus, if you have a car alarm, let your insurance provider know. Some providers offer a discount simply for deterring theft.

Most people think that only a few factors matter with their auto insurance policy. Their accident history, their vehicle, the number of citations they’ve accumulated and how well they tend to drive.

Conclusion

Now you know the FACTS. You know there are a few factors outside of your control:

– Your sex
– What you do for a living
– Where you live

These factors can either help or hurt you when getting a price quote for your car insurance.

Regardless of all the factors that go into car insurance quotes, we always strive to present the greatest possible coverage at the least possible price.

Find out for yourself: Get a free, no-obligation quote in just minutes — Yes, right now! You’ll be surprised just how fast we respond.