Entries from July 2010 ↓

Sometimes life just is not fair. You think you have done everything absolutely right and then circumstances show you everything is turning out wrong. So it is that you get to see the end of hope played out in court cases. You know it should never come to this but, when it comes to people’s lives, there are few real choices if you feel you want justice. You do your best to be reasonable. You offer to settle. But the other side just fights on. It all comes down to willpower. Whoever is strongest will be left standing. Continue reading →

There are many people out there who still don’t know how insurance providers calculate their rates for insuring their autos. It comes to the point when people ask their insurance agents why their neighbors have lower rates while driving the same car and getting insurance form the same provider? Unfortunately, it’s quite common for insurance industry workers to deal with cases like this, because lack of necessary knowledge makes the customers very suspicious and unfriendly.

To go straight with the question, there are different factors that will impact the rates you will be charged for insuring your auto. One of the most important factors is the age of the policyholder. They say that age doesn’t matter. Well, probably for many other things it really doesn’t matter, however when it comes to insuring your vehicle, age plays a very important role in the overall equation. Below you will find some explanations on why the policyholder’s age plays such an important role and in what way does it influence the final rates.

Fresh drivers behind the wheel

Insurance company statistics tell that younger drivers tend to take risk far more often when behind the wheel than those who have are older and have more experience in driving. The direct consequence of such tendencies is that teen drivers tend to get involved in serious accidents far more often than drivers from other age groups. That is why insurance companies charge young inexperienced drivers with higher rates. However, if the young driver maintains a good record and doesn’t file any claims for a specific period of time, the rates can be reduced significantly. Continue reading →

Tough times for the Commissioner

One of the most important lessons of the last two years is that having regulators in place does not mean having consumer safety. Wherever you look from the failure of the SEC to police the banking industry, to the failure of the FDA to keep food and drugs safe, to the failure of the Minerals Management Service to prevent the oil disaster in the Gulf of Mexico, it’s clear the regulators have been asleep at the wheel of a Toyota car speeding out of control thanks to the National Highway Traffic Safety Administration. It does not matter who you want to blame: the politicians who take the money of business and industry to pay for their expensive election campaigns, the leaders of business and industry who want the maximum profit with no accountability, or the regulators who sit in the middle and hope no one will notice they do nothing. The result has been a catastrophic series of failures. And who gets to pick up the bill? Why taxpayers and consumers, of course. Tax revenues are used to bail out the companies too big to be allowed to fail, and everyone who buys goods and services gets to pay a little more every year in prices to keep the wheels well greased.

Why are we thinking about this right now? Well, every US state has a department or office of insurance run by a Commissioner who is supposed to protect our interests. In some states where the political wind blows more to the left, the Commissioners can be crusaders who protect our interests. But in states where the political wind blows to the right, the lawmakers pass weak regulations and fail to back-up the regulators who might want to “do something”. A classic example of the problem can be seen in Texas where the Commissioner has been fighting a losing battle with the insurance industry in general and State Farm in particular. Continue reading →

Q: Should I carry insurance with my car?

A: Almost all states make it mandatory for the car owner to carry insurance with his vehicle as a proof of financial liability in case there’s damage or injury delivered to third parties while being on the road. Not having sufficient insurance coverage (lower than the state minimum) is illegal and may result in a substantial fine, license suspension and even time in custody. This only applies to the liability portion of your insurance policy, as other types of coverage are strictly optional.

Q: Should I purchase insurance prior buying a new car?

A: In case you’re purchasing your first car, you should definitely buy insurance first, otherwise you won’t be able to drive it from the dealer’s shop. Moreover, if you’re using a car loan to finance the purchase, your loan provider will make it a strict condition to purchase specific insurance in order to get the money you need.

In case you already have a car and want to replace it with a new one, you should inform your insurance provider about that and get new rates for the car make and model you want to purchase. You usually have between 2 to 4 weeks to contact your provider regarding the purchase, depending on the company.

In case you’re purchasing an additional vehicle and want to include it in your current policy, the regulations vary from company to company. Usually, companies require notification within a period of 30 days, after which they will inform you about approval (or non approval). Continue reading →