How to Switching Car Insurance

Logic Insurance, How to Switching Car Insurance - Could you save hundreds of dollars by switching car insurance? It is a question worth asking yourself at least once a year. By doing a little research now, you may be able to find a comparable insurance plan at a better rate with another company, and save money.

But you have to make sure you take the appropriate steps to switch, because you don't want to have a lapse in coverage. Jeanne Salvatore, senior vice president at the Insurance Information Institute in New York, suggests asking yourself if you're happy with the cost, coverage and service of your current policy each time it comes up for renewal.

"If the answer is 'yes, yes and yes,' then stay with them. But if you're not sure, it's a good opportunity to shop around," she says.

How to Switching Car Insurance

Review your current driving situation.
Take note of your driving circumstances as well as the needs of other drivers in your household. Do you have a newer model car? Do you commute several miles each week to work? Do you have recent traffic tickets?

According to the National Association of Insurance Commissioners (NAIC), your potential new insurance company may ask you all of these questions as part of the underwriting process. You'll also likely be asked about the number of drivers on the policy, your driver license information, and the insurance coverage and limits you'd like to purchase.

Take a look at your existing auto insurance policy. Knowing what you currently have will make it easier to create apples-to-apples comparisons with the rates you receive from different insurers. An easy way to do this is to study your current policy's declarations page, says Vaughn Graham, president of Rich and Cartmill insurance company in Tulsa, Oklahoma.

"The declarations page describes the insurance you have, including the amount of coverage as well as coverage limits, and the amount of your deductible," he says. When you're more informed about your current coverage, it can help you become a smarter shopper.

Shop around
Once you're familiar with your current policy, it's time to look for alternatives. A good first call is to your current insurance agent or the insurance company itself (some insurers, such as Geico and Progressive don't work with agents). Even if you're not happy with your existing policy (if you think the premiums are too expensive, for example), ask if there are ways to lower your rate for the same amount of coverage, says Salvatore. You may be eligible to receive discounts you're not getting.

Here's a list of common insurance company discounts, according to the NAIC:

• Having safety devices in the car, such as anti-theft features
• Having a good driving record
• Driving a low number of miles a year
• Having multiple cars on the same policy
• Being a student who gets good grades
• Insuring both your home and car with the same provider

While you're reviewing discounts, be aware that switching to a new provider could affect discounts you already have with other types of insurance. For example, if you're already getting a homeowner's and car-policy rate reduction from your current provider, and you then move your car insurance to a different company, you may lose the discount you receive for homeowner's insurance. It may make more financial sense to stay where you are, or switch both policies to a new provider that will give you a rate reduction for both.

In addition to speaking to your current agent or insurance company about your options, you can look online to research potential companies and obtain quotes. It is also a good idea to get referrals from family members, colleagues and other people whom you trust, Salvatore says. If they have had to file a claim with the insurer, they could tell you in person about their customer service experience.

If you're currently buying through an independent agent who represents multiple insurance companies, you have a few more options. "You can go to them and say 'I'm happy working with you, but I'm not so happy with this carrier' and explain why," Salvatore says. "Ask if they can suggest another carrier."

A good agent should be able to offer you customized choices to fit your needs, adds Graham. "There is no one-size-fits-all solution. We're all a little different."

Don't skimp on coverage.
As you receive quotes, make sure the insurance coverage and deductibles mentioned are satisfactory. Just because a rate quote may be lower than what you're currently paying, it doesn't mean it's a better deal if the coverage is lacking, Graham says. If you're not sure how much coverage you need, discuss your needs with insurance company representatives, and ask for guidance.

For example, if you have significant assets, you may need more than just the state minimum for bodily injury liability insurance. The same is true for property damage coverage. The retail price for an average new vehicle could easily top $30,000, but in many states, the minimum property damage coverage required is only $25,000. If you were responsible for a loss and did not have enough insurance coverage, you'd likely be on the hook for the difference. "Many of those limits are often inadequate and not near enough to meet today's exposures to price of vehicles," Graham says.

Though it's important to have ample liability coverage, if you drive an older model vehicle that is paid for, you may choose to opt out of some optional types of coverage, such as collision and comprehensive insurance, in order to keep premiums low.

Collision insurance pays for the physical damage your vehicle receives if it collides with another object, such as a tree or another car. Comprehensive insurance pays for damage to your car from causes other than a collision. This could include vandalism, broken glass, fire and theft. If this coverage is more than your vehicle is worth, you could skip it to lower your rates.

Just understand that you would then be paying for these losses out of your own funds if such damage did occur. People who live in areas prone to such natural disasters as floods, high winds and earthquakes might want to think about retaining their comprehensive coverage, experts say.

Another way to get a lower premium is to ask for a higher deductible. If you are willing to pay $1,000 out of pocket for a claim instead of $250, you could lower your rates. But make sure you can afford the higher deductible in the event that you suffer an insurable loss.

Notify your old and new providers.
After conducting all your research (and with a bit of luck), you may well find a company that offers good coverage at a lower rate. You may be willing to switch, but before you sign a new agreement, call your state's department of insurance to learn if the company is permitted to do business in your state. You can also check out business-rating companies A.M. Best and Standard & Poor's to check out the company's financial stability. (Standard & Poor's requires free registration before you can see company ratings.) It's worth the extra time to spend before you agree to pay hundreds of dollars on a new policy.

Once you've verified that the new provider can do business in your state and appears financially stable, it's time to make the switch. "When you are ready to cancel your current policy, let all parties know in writing, so that there is no gap in coverage," Salvatore says.

If you end your existing auto insurance policy before it expires, you may receive a partial premium refund, depending on the terms of your agreement. However, you should continue paying for your old policy until the new coverage is confirmed in writing. Otherwise, the old policy could be dropped for non-payment before the new policy starts. And in most states, driving without proper car insurance coverage is against the law. "It may be easier to wait and have your new policy start when the old one expires," Salvatore says.

Make it a priority to review your insurance policies on a regular basis. Household driving situations change often, and so do state laws that could affect the price of your premiums. By taking some time each year to do some car insurance research, you can make better decisions and pay the best possible prices for the best amounts of car insurance coverage. (Logic insurance article source and author: Margarette Burnette)

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Importants Steps to Buying a New Car

Logic Insurance, Importants Steps to Buying a New Car  -The following steps will show you how to locate, price and negotiate to buy the new car you want. Using this information could save you thousands of dollars on a new car and make the process quicker and enjoyable. It also puts you in charge of the deal-making process — and that feeling of empowerment is a good one.

But first things first: You need to decide what car you want to buy. If you haven't done that yet, please check out our "10 Steps to Finding the Right Car for You." Then head back here once you have chosen the right car.

Importants Steps to Buying a New Car

And if you have any questions along the way, please reach out to the Edmunds.com Live Help team for free assistance. The team will work hard to make your car shopping experience the best one yet.

Get Approved for a Car Loan
A powerful first step in the car buying process is to get approved for a loan. (If you have decided to lease your new car, things proceed a little differently, so please read "10 Steps to Leasing a New Car.") Getting approved for a loan from a bank, credit union or online lender will show you what interest rate you qualify for. If the interest rate offered is unexpectedly high, you will know that there are problems with your credit history that need to be resolved before you move forward. Getting approved in advance will also mean you can negotiate at the dealership as a cash buyer, which is much easier. You can still accept dealership financing, but getting approved before you even walk into the dealership will be the bargaining chip to get you the best interest rate.

Price Your Car and Your Trade-in
Everyone knows that the price of a new car is usually negotiable. But how much of a discount can you expect? Edmunds.com's True Market Value (TMV®) pricing uses actual sales figures to reveal the average price buyers are paying for cars in your area. Edmunds TMV adjusts the price for other factors including incentives, options and color.

Using Edmunds TMV, you can see the price of the car you want to buy, and also the price of your trade-in, if you have one. Choose the make, model and year of the car you want to appraise and follow the prompts. TMV adjusts the new car price for the available incentives. TMV for your used car shows the current market value if you sell it to a private party or trade it in at the dealership.

While TMV already factors in incentives, it is also possible to separately review the latest incentives and rebates available for all new cars. Perhaps you'll find an even better bargain on a new car you had not considered.

Locate Your New Car
As you search for your car, keep in mind that the more flexible you can be about options and color, the wider the range of the vehicles you'll find for sale. Being flexible will also give you more leverage to negotiate a better price, since you are not emotionally connected to one specific car.

On the Edmunds.com home page, select the make, model and year of the car you want. You'll then get a page that displays several actual cars for sale in your area, along with Edmunds.com Price Promise® offers. (More about Price Promise in the next step). Click on the link "Find Cars for Sale Near You" in the upper half of the screen. You then will make selections about options and color to get a more complete list of matching cars available for sale. Once you find the exact car you want, the next step will be to contact the dealership.

Use Price Promise and Dealership Internet Departments
Now that you are approaching the deal-making phase of the process, here's more about a good pathway for buying a new car: the Edmunds.com Price Promise program. It assures car shoppers a guaranteed, up-front price on a specific car.

Look for Price Promise offers on the car of your choice, print out the certificate on the page and you are ready to go to the dealership to conclude the deal. It's a good idea to call ahead and make sure the car is still available. Here are other tips on how to use Price Promise to buy your next car.

If there's no Price Promise offer on a car you want, shopping through a dealership's Internet department will save you time and money. You can easily communicate with the Internet manager by phone or e-mail.

We know that many people are drawn to the traditional way of car buying: visiting showrooms right off the bat. If you go this route, you should assess the car salesperson who is working with you before moving forward. Ask yourself if you feel comfortable and sense that you can trust this person. If you do feel comfortable, set up a time to test-drive the car if you haven't already done so. (It's a key step in finding the car that's right for you.) Before you head to the dealership, review all your notes and bring them with you.

Try Negotiating a Lower Price
Price Promise offers are usually below Edmunds TMV. But if you think you can negotiate an even better deal, you have another option: Request Internet price quotes from at least three local dealers. Take the lowest price, call the other dealerships and say, "If you beat this price, I'll buy it from you." The dealer almost certainly will give you a better price.

Some shoppers find this time-consuming and stressful, so consider whether the potential savings are worth the time and effort. It's good to remember that a good deal isn't just the lowest selling price. It's a combination of the most streamlined, enjoyable shopping experience and the lowest total out-the-door cost.

Review New Car Fees and Check Dealer Financing
Besides the cost of the car, you have to pay sales tax, registry fees and a documentation, or "doc" fee. You can estimate these extras using Edmunds' Monthly Loan Payment Calculator. Now ask the Internet sales manager or the dealership's Price Promise contact to supply a breakdown of all the fees, or a "worksheet," which lists the purchase price, the vehicle's invoice and all related fees. Review the figures carefully before signing the sales contract.

Back in Step One, you were pre-approved for financing. But who knows? Maybe you can get an even better interest rate at the dealership. To see if that's possible, you can let the dealership run a credit report and assess what interest rate you qualify for. If it is lower than your pre-approved loan, go for it. If not, you already have a good loan locked in.

If the price, financing and fees look right, it's nearly time to say yes to the deal. But before you do, consider making the sale contingent on having your new car delivered to your home or office. This is a great time saver and allows you to close the deal in a relaxed environment.

Sign the Paperwork
This step will take place at your home if you have the dealership deliver the car, or at the dealership if you prefer to pick it up there. Either way, make sure there are no dents or scratches on the body or the wheels. Check that all the equipment is included, such as floor mats, owner's manuals and rear-seat DVD headphones. Your new car should also come with a full tank of gas. If anything is missing or needs repair, ask for a "Due Bill" that puts this in writing.

In cases of home delivery, the salesperson arrives with all the necessary paperwork. If you opt to pick up your car at the dealership, you will sign paperwork in the finance and insurance office, where the finance manager may try to sell you additional items. These typically include extended warranties, fabric protection or additional alarm systems. These extras can often be purchased elsewhere for less. One product that can have real value is an extended auto warranty, which provides peace of mind to many buyers and could save you money in the long run. Remember, though, that its price also is negotiable and you can always buy it later. You can learn more about the products offered by the finance manager in "Negotiating a Dealer's New-Car Add-Ons."

Importants Steps to Buying a New Car

Review the contract carefully and make sure the numbers match the worksheet and that there are no additional charges or fees. A good finance manager will explain each form and what it means. Don't hurry. Buying a car is a serious commitment. And remember, there is no cooling-off period. Once you sign the contract, the car is yours.

Take Delivery of Your New Car
You are probably eager to begin driving your new car. But this is an important step: Let the salesperson give you a tour of your new car. This could include showing you how to connect your smartphone to the car's Bluetooth system and learning how to use other important features and safety devices. Yes, you can review all this in the manual later, but it's quite helpful to get a hands-on demonstration. If you don't have time for a complete demonstration when you sign the contract, ask to visit the dealership a week later for this important step. As you drive away, there is only one more thing to do: Enjoy your new car. (Logic insurance articles source and writer: Philip Reed)

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Teenager Drivers, Marijuana,Teenager Drivers,

Teenager Drivers, Marijuana and Car Insurance, Logic Insurance - Marijuana, young drivers and serious car accidents are on a collision course. Fatal crashes involving drivers whose systems showed evidence of THC, the active ingredient in marijuana, nearly tripled in 10 years, rising from 4.2 percent in 1999 to 12.2 percent in 2010, according to a study released earlier this year by Columbia University's Mailman School of Public Health. In another four-year study, 43 percent of fatally injured drivers under 24 tested positive for cannabinoids. The percentage was lower for older age groups.

Now that marijuana is legal in Colorado and Washington and widely tolerated elsewhere in the U.S., parents may be on their own collision course with pot: They face steep car insurance hikes and even cancellation if young drivers on their policies are convicted of a DUI stemming from marijuana use. Here's what parents need to know about drugged driving and the effect it can have on insurance coverage.

Teenager Drivers, Marijuana and Car Insurance

Pot use behind the wheel is a subset of a category that law enforcement and the traffic safety community call drugged driving. Every state has laws addressing it. In many, the laws say if a driver is stopped and authorities can prove the individual drove under the influence of any substance that impairs driving ability, he or she could be convicted of a DUI. Nearly one-third of states feature "per se" laws. These more strict laws say that any amount of a controlled substance found in the driver's body is evidence of impaired driving.

The hazards of drunken driving are well known. A growing concern among researchers, law enforcement and those in the traffic safety community is the destruction wreaked by individuals driving under the influence of drugs including marijuana, cocaine and prescription and over-the-counter drugs. Conservative estimates put the cost of these accidents at 6,700 deaths and nearly $60 billion in costs each year.

The effects of marijuana use on driving vary from one person to the next. In the words of the National Highway Traffic Safety Administration (NHTSA), "It is difficult to establish a relationship between a person's THC blood or plasma concentration and performance impairing effects." Concentrations of the drug are "very dependent on patterns of use as well as dose."

Driving while stoned is a serious matter for teen and twenty-something drivers, who risk death, injury, criminal prosecution and civil lawsuits. In addition to those outcomes, drugged driving also can have financial impacts on parents, who often own and insure the cars their adult children drive.

"Insurance follows the car, not the driver," says Loretta Worters, vice president of communications for the Insurance Information Institute, a national insurance trade association. A young person's drugged-driving conviction is likely to be treated like a drunk driving conviction, whether the recreational use of pot is legal in that state, says Bob Passmore, personal lines policy senior director with the Property Casualty Insurers Association of America.

"As with any DUI conviction, your insurance company could cancel your policy, ask you to take the individual off the policy, or keep him or her on at a much higher rate, depending on the rules in the state," Passmore says. "The individual with the conviction might need to get their own policy." That would come at a much higher rate than if the driver is on his parents' policy, he says.

Worters agrees. If a young person is convicted of driving under the influence, "insurance rates will jump astronomically, because driving under the influence is illegal," she says. "DUI convictions can result in multi-year jail terms. You're also putting the parents' assets at risk" if there are civil lawsuits in connection with the accident, she warns.

Not every teen uses pot, of course. In 2012, less than 8 percent of youths ages 12-17 had used marijuana in the past month, according to the 2012 National Survey on Drug Use & Health. And about 80 percent of teens say they disapprove of their friends using pot. Pot use increases markedly for young adults, however. In 2012, 18.7 percent of 18-to-25-year-olds had used marijuana in the past month.

If your child does use pot, you may need to take a tough stance when it comes to his or her use of your cars.

"Parents may want to consider either taking the car privileges away until they've cleaned up their act, or taking them off your insurance policy," Worters says. An insurance company may not be comfortable with a young driver continuing to be on the policy if they're "living in the same house, having possible access to the keys, even if they aren't driving," she says, "because that risk is always there."

Teenager Drivers, Marijuana and Car Insurance

Parents should consider contacting their insurance agent to assess their coverage, preferably before a teen drives under their car insurance policy, experts says. Parents also might want to review their liability limits and consider an umbrella liability policy. This will provide protection in case their child causes a serious injury and is sued. (Logic Insurance article source and author: Neil Bartlett)

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How to Cut Teen Insurance Rates

How to Cut Teen Insurance Rates, Logic Insurance - Teens ages 16-19 are three times more likely than drivers older than 20 to be involved in a fatal crash (or any crash, for that matter) according to the Insurance Institute for Highway Safety.

It's not too surprising, then, that teen drivers tend to have high insurance premiums. For parents, this can mean a big jump in insurance premiums once you add your teen driver to your policy.

How to Cut Teen Insurance Rates

However, there are ways to reduce your costs right out of the gate, even for very inexperienced drivers. Here are some ways to keep policy costs at a minimum.

Choose the Right Car
It's simply a matter of economics. There are some cars that cost more to repair and replace than others. There are also some cars that are more likely to be stolen and others that protect passengers better in a crash. Combined, these three characteristics have a lot to do with how much you'll pay for the collision and theft portions of your policy, says David Goldstein, the author of Insure Your Car for Less: A Practical Guide to Saving Money on Automobile Insurance.

There are several ways to choose the least expensive car to drive. First, check the Insurance Institute for Highway Safety's Top Safety Pick awards and the National Highway Traffic Safety Administration's 5-Star Safety Ratings to see which cars scored the best in crashworthiness. You'll also want to check the National Insurance Crime Bureau's list of Hot Wheels: cars that are most commonly stolen.

Your insurance broker or company can also help you find the best rate for the cars you're considering, says Goldstein, who has worked as an insurance and claims adjuster. "If you're considering several cars, call and ask for a rate quote on each," he suggests.

Midsize family cars are generally the cheapest to insure, says Jeanne Salvatore, senior vice president and chief communications officer at the Insurance Information Institute, a nonprofit information service. "You want a car that's easy to drive and highly protective. Those are the cars that are going to keep your teen safe and cost the least to insure," she says.

You may also want to consider a car that doesn't need collision insurance, which will cut your rates considerably, says Salvatore, and either way, the age of your car may lead to more discounts.

"Some companies offer a utility discount for cars older than a 2002 model year," she says. That said, make sure any older car you purchase has a solid crash rating and all of the safety features that a newer car might have including airbags, an antilock braking system (ABS), daytime running lights and (for SUVs) electronic stability control.

Adjust Driver Assignments
When you call the insurance company to add your child to a policy, the representative will ask you to designate which car will be driven by each member of your family most often.

You can save money by designating and having your child drive the car that's the least expensive to insure. The trick is finding out which car that is, says Goldstein. "Driver assignment can really affect your rates," he agrees.

If you get someone on the phone who is willing to work with you, he or she can take you through all the different scenarios. "Occasionally, I'd quote rates for four people and four different cars: two parents and two kids. If we played around with it, we could often save money," Goldstein says.

Look for Alumni Discounts or Resident-Student Discounts
One of the perks of going to college is that many schools ink alumni deals with large organizations, such as insurance companies. While the discount is usually around 5 or 10 percent, it's still worth looking into. Geico, for instance, offers an 8 percent discount for DePaul University students and alumni. Liberty Mutual offers special rates to those who attend Arizona State University.

If your child goes away to college and doesn't take a car along, you can save a lot on your premium. Allstate, for example, offers a 35 percent discount off premiums for students who live at a school that is more than 100 miles from where their car is garaged. "There's an assumption that they are only going to be driving on weekends and school vacations," says Salvatore.

Finally, all full-time high school and college students who get good grades can benefit from their diligence. Most companies offer up to 25 percent discounts for good report cards. You'll also see rates drop as your child advances in school. Seniors in college have better rates than freshman, so if your child takes college credits over the summer or in high school, let your insurance company know when he or she reaches the next college milestone, says Goldstein.

Wait an Extra Year Before Licensing
Some teens may not like this idea, but you can save a lot of money simply by having your son or daughter wait an extra year to get a driving permit.

"Wait until they are as old as possible before they get their permit," says Goldstein. "For instance, in some states you can get your learner's permit as early as 16 but you're probably not going to be driving [without restrictions] until you're 18. Why pay for insurance those two years unless you have to?"

Delaying the process is more common than you may think, according to several recent studies. The AAA Foundation for Traffic Safety reports that just 44 percent of teens get their licenses within 12 months of the minimum age and only 54 percent get their licenses before they turn 18.

However, if you go this route, make sure teens know that they'll still need the practice and supervision that a graduated driver licensing program affords.

Tracking for Discounts and Better Driving Habits
In recent years new devices that connect to a car's computer and use GPS technology to track driving habits and routes have flooded the market. While they can be very useful for parents who want to make sure that their teen isn't speeding or driving outside an approved area, they're also being used by insurance companies to help set rates for drivers of all ages in an approach called use-based insurance.

Snapshot, a program by Progressive Insurance, is one such option that uses a pocket-size telematics device that transmits car data using cell-phone technology. The device plugs into a car's onboard diagnostic port and measures driving habits such as how and when someone drives, tracking behaviors like mileage, time of day and if the person performs hard braking maneuvers.

"Our Snapshot program gives all consumers, including teens, more control over their car insurance costs by offering personalized discounts based on their actual driving behavior," explains Jeff Sibel, a spokesman for Progressive Insurance. "People who drive less, in safer ways and during safer times of day are most likely to receive a discount."

Some companies are offering the device for parental tracking, but without an immediate insurance discount. Its use could result in lower rates going forward, says Rebecca Hirsch, a spokeswoman for insurer USAA. "We're offering the device for free and parents get the monitoring for a year free," she says. "Parents can get text messages if their teens are doing things like hard braking. It enables the parent and the teen to have a conversation around safe driving habits. The first few years are so critical. Anecdotally, we've seen that the devices help build better driving behaviors."

Take a Class
Adults and teens alike can save money by taking a six-hour driving safety course either online or in person. Some insurance companies are offering teen-specific courses that can help reduce the number of crashes that involve teens by providing realistic driving simulations.

Liberty Mutual, for example, offers something it calls teenSMART, a program that focuses on the six factors that most commonly cause teen car accidents. The company says teens who complete the program may get "special savings" on their auto policies, but doesn't offer any examples of what those savings might be.

State Farm offers a program called Steer Clear for drivers under the age of 25 or new drivers with less than three years of driving experience. It requires drivers to watch a video, sign a safe driving parent/driver agreement and complete a certain number of supervised trips of 15-30 minutes over the course of a month, filling out a log after each trip. By completing the program, drivers can get a discount of up to 15 percent on their coverage, says State Farm spokeswoman Rachael Risinger.

Finally, driver-training classes — so-called driver's ed — can also help lower your premiums by up to 10 percent, depending on your insurer.

Make Smart Choices
Even if they apply every discount imaginable, most people will find there's no getting around the fact that rates will go up with a teen driver on the policy — at least for a little while. And while it might be tempting to simply "forget" to inform your insurance company that Junior has his license, take note: Doing so can have serious consequences if your child is in an accident.

How to Cut Teen Insurance Rates

You'll also want to make sure you have enough insurance coverage. "Don't go for the minimum limits," suggests Burl Daniel, a former insurance agent and corporate risk manager who testifies as an expert witness in insurance cases. "You're exposing yourself to potential problems, if your kid does have a wreck and seriously injures someone. Don't take the bait now just to save a few hundred dollars when it could end up costing you a lot down the road." (Logic Insurance source and author: Karen J. Bannan)

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How to Shop for Use-Based Car Insurance

How to Shop for Use-Based Car Insurance, Logic Insurance - In recent years, nine of 10 top U.S. auto insurance companies have started selling policies based on how motorists drive. At least a handful of pay-as-you-drive policies are offered in every state, covering as many as 3 million U.S. vehicles, according to industry estimates.

Switching to use-based insurance (UBI) could help you save a little or a lot over what car owners spend on premiums associated with a more traditional policy. If you're considering changing to a UBI plan, it pays to understand what you're getting.

How to Shop for Use-Based Car Insurance

Carriers set UBI rates by collecting mileage or other information directly from your car, but similarities among policies end there. Some insurers use a small, meterlike electronic device that plugs into a car's onboard diagnostics port to store or transmit information. Newer versions gather driving data through an app and a smartphone connected to a car's infotainment or telematics system.

Drivers may happily trade access to their driving habits for lower insurance rates. But privacy advocates worry that insurance companies aren't always 100 percent transparent about what data they collect, what they do with it and with whom they share it.

"Privacy is a real question," says J. Robert Hunter, insurance director for the Consumer Federation of America. "What do insurance companies do with that information? If I park at the corner of Main and 14th and on one corner is a bar and another is a gym, will you raise or lower my rate?"

Here are steps to take if you're shopping for car insurance and considering a use-based policy:

Find out what's available
Look on the Web site of your state insurance commission or consumer advocacy agency to see which insurance carriers are licensed to operate in your area. Here's a list of all 50 state insurance departments. Alternatively, visit auto insurers' Web sites and type in your ZIP code to see if they sell UBI plans where you live.

Understand what types of data insurers collect
Some states restrict the information insurers can collect, which limits the types of UBI policies they offer. In California, for example, insurance companies can track mileage but are barred from monitoring where or when you drive.

They also can't track such behaviors as how fast you drive or how often you slam on the brakes, the activity known in insurance lingo as "hard-braking events." Visit state insurance regulators' Web sites for their explanations of the UBI plans they authorize, such as this pay-as-you-go auto insurance pamphlet from the Oregon Department of Consumer and Business Services.

You can also read the fine print on UBI policies on insurers' Web sites to determine what driving data an insurer collects, and how it is gathered.

Try before you buy
Certain insurers give potential customers a chance to take a UBI policy for a test-drive before committing to a policy. In such cases, you may be asked to plug an electronic monitor into your car's diagnostics port for a month or so, which allows the insurer to collect enough data to set a rate. Other insurers offer UBI policies only to existing customers.

Understand how insurers determine discounts: Insurers may offer an introductory discount of 5 or 10 percent during a try-out period, and adjust the rate as needed after monitoring mileage or driving behaviors for a set time period.

Progressive Insurance bases rates for its Snapshot policy on six months of driving data. State Farm customers with Drive Safe & Save policies keep electronic monitors plugged into their cars all the time, so, theoretically, their rates could change at renewal time, if they've driven substantially more or less than in the previous period.

Use-Based Car Insurance

Consider a UBI bundle: Some insurers offer UBI as part of a bundle of services tied to a car's built-in entertainment, safety or maintenance systems. State Farm's Drive Safe & Save with In-Drive Connect policy, a joint venture with Verizon Wireless, offers mileage-based insurance along with stolen vehicle assistance and hands-free mobile phone service. After a one-year free trial, charges for In-Drive Connect jump to $6.99 a month or more based on what other features a customer chooses.

See how you're doing
If you sign up, use the Web portal associated with your UBI policy to monitor your driving. Some insurers' dashboards give customers a grade based on their driving habits. For example, customers of Allstate's Drivewise UBI policies can download an iPhone or Android app to look up mileage, speed, hard stops and what times of day they drive. (Logic Insurance article source and author: Edmun.com and Michelle V. Rafter)

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Car Insurance Companies Use Facebook for Claims Investigations

Car Insurance Companies Use Facebook for Claims Investigations, Logic Insurance - In the hours after a car accident, filing a claim with your auto insurance company is one of the first steps you should take. But auto insurance industry insiders say a smart second step is giving social media accounts the once-over to prevent all or part of that claim from being denied.

In the past five years, the use of social media has exploded within the insurance industry, says Frank Darras, an insurance attorney in Ontario, California, who represents plaintiffs in suits against insurance companies.

Car Insurance Companies Use Facebook for Claims Investigations

Because social media Web sites provide a real-time examination of users' lifestyles, insurance companies, claims adjusters and attorneys have begun to monitor and mine them as a valuable source of claims-investigation evidence. Insurers are reviewing information found on such social media sites as Facebook, LinkedIn, Instagram, Twitter, Foursquare, Google Plus and Pinterest, and applying it to auto claims, says Chicago personal injury lawyer Michael Helfand.

Facebook is used in almost every claim now, especially when there is an injury. "Checking social media accounts has become one of the first things an insurance company or adjuster will do when you file a claim," adds Darras. Especially when any injuries stem from the accident.

Claims Investigation by Social Media

Part of the new claims-investigation process is for an adjuster, agent or insurance company to look for the Facebook, Twitter or other social media account of a person claiming bodily injury stemming from an accident, Helfand says. They're looking for proof that the person is filing a fraudulent claim, he says.

If the part of your accident claim is for a back injury and you share post-accident pictures of you golfing, surfing or playing ball with the kids, your claim could be denied.

"Over the years, social media has killed a bunch of claims," says Helfand.

"Almost every insurance company has a special investigation unit (SIU), and policyholders should work on the assumption that SIUs will look into questionable or fraudulent claims," says Michael Barry, vice president of media relations for the Insurance Information Institute.

"Mining social media for clues is one of the fastest-growing areas of insurance-fraud investigation," says James Quiggle of the Coalition Against Insurance Fraud in a report published in 2012.

While insurance adjusters or agents may not look into the social media accounts of every person who files a claim, they will definitely dig into social media if they have any reason to suspect a fraudulent claim.

"It's simply part of the due diligence in investigating a case, because so many people are brazen or dumb enough to say one thing to an insurance adjuster while at the same time telling the world something else," Helfand says. "It's not unusual for a person to tell the adjuster and doctor how much their back hurts and then post photos from their softball league.

"Facebook and other social media sites have become a great tool for fighting claims because the 'look at me' nature of social media causes people to shoot themselves in the foot," he says.

A claims adjuster will also stick directly to the language you use in the claim. If you report that you're unable to lift more than 20 pounds, but a picture on social media shows you doing otherwise, Darras says you can expect the claim will be denied.

The same goes for tweets and status updates detailing your mood or mental state related to the accident. A stream of tweets about your road rage or noting that you're driving against doctors' orders because you're under the influence of medicine will raise red flags on any auto-accident-related injury claim.

Switch Your Privacy Settings

Using Facebook or Twitter activity in the claims process is completely legal — as long as the information is part of a "public" profile, Darras says.

"It is generally understood that if the adjuster or insurance company has to 'friend' or have a third party 'friend' the claimant on Facebook to obtain the information, then it becomes unethical and an invasion of privacy. Unfortunately, that doesn't necessarily make it illegal," Darras says

You can reduce your exposure by adjusting the privacy settings for Facebook accounts so that only people you select as friends can read your status updates or view photos on your account. And make sure privacy settings on Twitter are set to "Protect my Tweets" to limit who can read your timeline.

But beware: Your friends' social media accounts could also complicate an insurance claim. A photo or post on Facebook that's visible on a friend's public page might also be spotted, and used, by a car insurance company or claims adjuster, Darras says.

To be safe, Darras suggests removing the Facebook photos and tags or tweets of anything incriminating. For instance, delete a post in which your friends say that you're a terrible driver — even if they're joking. Helfand says an insurance company could use this evidence against you during the claims-investigation process.

"The responsibility to be constantly vigilant with Facebook profiles and Twitter streams is ultimately on consumers," says Helfand.

Keep Quiet

Don't rely solely on privacy settings to protect a claim. Helfand says the best advice is zipping your virtual lip.

"No matter how rattled, irritated you are, it's never wise to tweet or post on Facebook that you were involved in an accident," he says. "There's nothing to benefit from doing that."

In fact, getting social about an accident or car insurance claim is possibly the worst thing you can do.

"Doing this is just asking the insurance company to use the information against you, even if what you said was harmless in your eyes," Darras says. "Remember that jokes and sarcasm aren't conveyed well on social media and the insurance company will use everything they can."

Often insurance companies ask a person injured in a car wreck to provide information about their activities for a two-week period, says Darras. If any public Facebook activity doesn't match the log, the insurance company can think you're lying and treat the auto insurance claim as fraud.

Disputing the Social Scoop

If the Internet interferes with your claim, all is not lost. It may be possible to dispute anything an adjuster turns up on your social profiles.

"One of the biggest arguments consumers can use against insurance companies is their failure to investigate the information further and receive third-party support of the information they found on social media," says Darras.

And because social media should be a starting point, not the only evidence used in approving or denying a claim, you can press the insurance company to consider statements from other sources, such as doctors or witnesses, or allow you to explain the circumstances around the information found on your social networking profiles.

There is a time and place for social media, and it's not necessary to shut down your accounts after an accident. But it is important to watch what you post and be cautious about your participation in conversations, says Darras. And remember, regardless of your privacy settings, social media is never really private. (Logic Insurance article author and source: Gina Roberts-Gray)

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How Car Insurance Companies Handle Car Accident Claims

How Car Insurance Companies Handle Car Accident Claims, Logic Insurance - When Apple programmer Kit Cutler's 2012 Ford Focus was slammed from behind by a silver Lexus, the hit was so hard that it shoved his car into the Honda Accord in front of him.

Although no one was hurt in the accident, the driver of the silver Lexus drove off without providing insurance information to anyone. Cutler and the Accord's driver exchanged insurance information, filed reports with the police and went home. The accident was only slightly more confusing to Cutler than the insurance claims process that came after.

How Car Insurance Companies Handle Car Accident Claims

That car insurance claims process baffles nearly everyone. "Most people only file a claim every eight to 10 years," says Jeanne Salvatore, vice president for public affairs and consumer spokesperson for the Insurance Information Institute, an industry-supported, non-lobbying group dedicated to improving public understanding of insurance.

Cutler filed his claim by phone. "In that initial interview, the agent told me very quickly that I wasn't at fault," he says. Then she asked him questions about the accident and typed his answers into an online form. Cutler checked and verified the information.

"They go through it all very quickly, so you have to pay attention," he says. "I hadn't been in an accident before, and I didn't know what was going on."

This article explains what insurance companies are doing behind the scenes in the wake of an automotive mishap or collision. It also discusses what happens if you're hit by an uninsured or underinsured driver.

Immediately After the Accident

If you're involved in an accident, "The first thing to do is let your insurance company know you were in an accident and provide all the specifics of it," Salvatore says. "From the second of the accident, keep good records."

Use your smartphone (or keep a notebook in your glovebox) and write down the time, date, plate number, make and model of their car, their registration information, license number, name, insurance company and contact information.

If the police are on the scene, Salvatore says, take their names and badge numbers. Get the names of any witnesses and note whether emergency medical personnel were called. "Photos are helpful. Take pictures of the car and the license plate," she says. "If the claim is straightforward, you may not need any of it, but if a problem occurs, you need all the information possible." Again, with the prevalence of smartphones these days, this is all quite easy to do.

From filing the claim to resolving it, every insurance company's methods are different. However, the essentials of the process are fairly standard. You'll only see part of the process, though. All negotiations between insurance companies about payments and reimbursements will be carried on behind the scenes.

Filing Your Claim

As with Cutler's case, it's standard for your insurance carrier to call soon after you report an accident. During that call, "We'll match the person to their policy, determine what happened in the accident, find out about any injuries, the extent of damage to both vehicles and get some demographic information," says Mike Flato, a process business leader for Progressive Insurance. "We'll make sure everyone is OK; if not, what happened and then who'll handle the medical claims."

After a claim is filed, your insurance company assigns you a claims adjustor, who is your contact from then on. Adjustors coordinate teams that look at medical reports, investigate the accident, speak with witnesses, view the scene, examine the vehicle damage, manage all the repairs and any medical treatments, check all coverages (how much your policy pays for medical injuries and property damages) and ultimately determine fault.

"The claims process is the business of the insurance company," says Salvatore. "Every situation is different, and the better organized you are, the easier the claims process is."

While adjustors work, medical treatment and auto repairs start immediately, with each insurance company covering its own driver's injuries and property damages. This process of "making you whole" is known as indemnification. Your insurance company indemnifies you, not the other way around. Later, after the insurance companies assess fault, they will negotiate to determine which one will reimburse the other for claims paid.

Who's at Fault?

Fault assessment is not necessarily a simple matter. "Liability laws don't govern how you assess fault," says John Murphy, service center business leader for Progressive Insurance. "They dictate how much you can collect and who is eligible." Therefore, fault determination is up to the insurance companies.

"There may be an allocation of fault, such as 60/40," says Scott Spriggs, a member of the Insurance Council of Texas. "In that case, payments may be apportioned by percent of fault." That is, the insurance company of the driver who is 60 percent at fault pays for 60 percent of the claims and the other company pays for the rest.

"Sometimes, if one party is allocated more than 50 percent of fault, that driver's insurance company pays for everything," Spriggs says. "In no-fault states, each driver's insurance company pays for its own customer's claims."

If one driver is wholly at fault, it's much simpler. "In at-fault states, at-fault drivers try to collect from their own insurance, whereas the person who is not at fault collects from the at-fault driver's insurance company," Salvatore says.

When an Uninsured or Underinsured Driver Hits You

It may come as a surprise, but the process doesn't change much when uninsured or underinsured drivers are involved.

"Each state has its own rules about what qualifies as uninsured and underinsured," says Murphy. If an uninsured driver hits you, and you suffer injuries, "your insurance company will pay you," he says. However, you must have collision insurance or coverage for uninsured or underinsured drivers in order for your carrier to pay for your car's damages. After any payments to you, your carrier "will try to find the uninsured driver and get reimbursement for its payments," he says.

Fortunately, Cutler got a photo of the Lexus' license from the Accord's driver. The photo meant Cutler's insurance company could find the hit-and-run driver and demand reimbursement for the $11,000 it paid to repair Cutler's car. Because of the photo, Cutler says, his insurance company waived his deductible.

Every state but New Hampshire and Virginia requires auto liability insurance. New Hampshire requires that drivers set aside funds for accidents, but Virginia doesn't, according to the Insurance Information Institute. Despite this, the institute says your chances of encountering an uninsured driver in the United States are about one in seven.

When a driver is underinsured, "your insurance company will work with the other driver's company to cover your claim," Spriggs says. For example, suppose the underinsured driver's policy covers up to $5,000 of property damage, but your vehicle sustained $10,000 in damage. In that case, the underinsured driver's insurance company will pay $5,000 and your insurance company will pay the other $5,000. Your insurance company will then go directly to the underinsured driver and seek reimbursement for its payment to you.

Although claims adjustors determine fault, "subrogation units" use those determinations to decide which insurance company pays and how much it pays.

"Subrogation is the substitution of one creditor for another," Spriggs says. "If I am hit by someone else, my insurance company will cover that damage." In other words, you substitute one creditor — your insurance company — for another creditor (the other driver's insurance company). That is subrogation. Then, of course, your insurance company seeks reimbursement from the other insurance company or the driver.

In Cutler's case, neither he nor the Accord driver were at fault. Therefore, each driver's insurance company paid its own customer's claim. No subrogation was involved.

How Carriers Resolve Payment Disputes

When each driver's carrier completes its claim investigations, "one insurance company will send a demand [for payment] to the other," Murphy says. "That will be countered. The carriers will then work out liability and who pays what. Most of the time, we make the appropriate payments. The faster we can do that, the faster we can pay out."

If companies can't agree on payment, they can request judgment from Arbitration Forums, an industry-funded nonprofit set up to handle insurance carrier disputes.

How Car Insurance Companies Handle Car Accident Claims

"For arbitration, the two companies apply and present all their information," Murphy says. "The arbitration panel makes a decision." Those decisions are final and binding, and there is no appeal.

What You Need To Know

Even the most minor car accident can shake you up. But it's important to know the steps to take so that everything will go smoothly in the claims process.

If you need to file an auto insurance claim, know what kind of coverage you have, be prepared with as much information about the accident as possible, stay in touch with your claims adjustor and know your state's laws regarding liability.

"Every state has an insurance commissioner," Salvatore says. "You can go to that Web site to learn about your state's laws." (Logic Insurance article author and source: Bridget Mintz Testa)

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How to Navigate Parents Car Insurance

Logic Insurance, How to Navigate Parents Car Insurance - I am a lucky girl. Throughout high school and college, my parents kept me on their car insurance policy. I was an expensive item to add! I kept the cost as low as possible by earning the good student discount, driving a 14-year-old Subaru, never having a speeding ticket and being born a girl.

However, when my fiancé James and I were preparing to get married, one of the financial conversations we had was about the car insurance policy. My parents gave me the title to the car (they owned it) and it became my responsibility, my car -- and my turn to get insurance.

I set out to find a policy and did all of my research online. I soon found out, however, that some of my preconceptions turned out to be misconceptions.Here's what I learned along the way.

How to Navigate Parents Car Insurance

I looked online and compared premiums from three difference companies, which I will refer to as Insurance Company A, which my parents have, as well as Insurance Company B and Insurance Company. C. My preference was to stick with the familiar -- my parents' insurance company – but it turns out it was far beyond my budget. Here is the quote I was offered:

It was like the story of the Three Little Bears. Insurance Company A cost too much. My parents have the advantage of bundling their policies (homeowners, etc.) and saving that way, in which case I recommend it. However, I'm not at that place in life where I need anything other than car insurance.

The rates offered by Insurance Company B were affordable but I needed to investigate exactly what I was paying for or missing out on.

I plugged in my price to see what coverage options were available. Company B's most highly recommended package cost less than Company A's basic option. I didn't feel comfortable enlisting in the most basic option because I don't yet have a fully stocked emergency fund in case of a serious accident. So I compared the mid-range option at Company B with what I could get from Company C.

I was impressed. The premium Company C package offered more and cost less than the equivalent from Company B. The same was true of the mid-range package. Continuing my research, I called upon several important sources: my mom, Google (GOOG), and the insurance company agent (in that order). I needed to clear up some confusing lingo I was experiencing and get an opinion. I'm generally skeptical, and believe that if a deal sounds too good to be true, it probably is.

What Does a Comprehensive Deductible Cover?

I asked my mom (and Google) about the comprehensive coverage. Basically, that means the non-accident damage that will be covered. Hail and flood damage are some examples.

The collision deductible is what you're willing to pay as cash out of pocket after an accident for repairs.

Bodily injury and property damages are the amount insurance will pay if you cause harm to another person or property with your vehicle.

I learned that a totaled car means the total loss of a vehicle. A vehicle is considered a total loss when the repairs needed exceed 50 percent to 70 percent of the value of the car, depending on the insurance policy. 

The insurance company will give you the market value of the car before the crash. So a $600-800 repair would be a total loss for the Subaru because it had a market value of $1,200 (optimistically). In my case, if that happened, I would receive about $1,000 from my insurer to then find a new car.

Can I Get Additional Discounts?It never hurts to ask for a discount. You might be surprised at what you're offered.

All things considered, I chose the Company C "similar" (mid-range) policy, but was able to bring my cost down to $79.96 each month. After going into the office, my agent asked me about my qualifications for other discounts, which brought it down even further. For example, I have a diploma, which still qualifies me for a good student discount. It's not paying off my debt, but hey, I'll take a discount when I can get one.

Also, in most states, insurers may check your credit -- essentially a credit-based insurance score -- when determining your monthly premium. That's when working toward, or maintaining, good credit over time can help you out. By looking at your credit reports regularly, you can spot errors or other problems that are dragging down your credit, and resolve them. 

Checking your credit scores regularly can also give you an idea of where you stand, too. You can get your credit reports for free once a year from AnnualCreditReport.com, and you can get your credit scores for free, updated monthly, on Credit.com. (Logic Insurance article source: Daily Finance)

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How to Get the Best Deal on Car Insurance

Logic Insurance, How to Get the Best Car Insurance in the US -You've probably had this experience: you're frustrated because the driver in front of you is going too slow for your liking. You can see the driver's gray hair and think that this person should not be driving any longer. 

Just the opposite is true: 60-something drivers gets the last laugh. Not only are they more likely to arrive safely at their destination, they are rewarded for it with lower auto insurance rates.

"Older drivers by and large are far safer in terms of the number of accidents they have and the number of claims they turn in than the typical driver," said Marty Agather, senior vice president of the consumer resource site TrustedChoice.com. 

He says insurance companies collect incredible amounts of data to set prices. "The sweet spot in the auto marketplace is someone who is recently retired but still vital," according to Agather. "They're not driving to work every day, still with it, and their reaction time has not slowed down too much. You still have a very safe operating behavior."

According to 21st Century Insurance, "senior citizens are some of the safest, most responsible and defensive drivers on the road." As a result, many insurance companies offer special rates and discounts for these mature drivers. In general, rates for drivers who are 50 and 74 years old are 5 percent to 15 percent below those for people 30 to 50. 

And of course, drivers younger than 25 can pay more than double what the seniors pay. "For young males, the numbers are astronomical," said Agather. "They are 200 times more likely to get into an accident."

As Your Life Changes, So Does Your Premium
DMV.org says car insurance rates gradually decline from the time you turn 25 until you turn 70 -- as long as you maintain a good driving record. By the time you're in your 40s, you are likely to have a family, which encourages safer driving, and you are less likely to be at a bar at 2 a.m., which does not. But once you hit 70, rates start to go up again because you are more likely to have impaired vision, slower reactions and poorer cognitive functions.

For those in the 50-to-70 sweet spot, some discounts are applied automatically; some require you to inform your agent or insurance company of changes in your lifestyle; and others come from being pro-active. For example:

• Low-mileage discount. If you're retired, you have probably cut down on the miles you put on each day. Inform your agent and your insurer. They don't know about changes in your life unless you tell them. 
• Defensive driving classes. AARP, AAA and others offer classes for drivers of all ages. They cost about $50, usually earning a discount of up to 5 percent a year, for three years. AARP says automatic discounts follow a course for drivers in Alabama, Alaska, Arkansas, California, Colorado, Connecticut, the District of Columbia, Delaware, Florida, Georgia, Idaho, Illinois, Kansas, Kentucky, Louisiana, Maine, Minnesota, Mississippi, Montana, Nevada, New Jersey, New Mexico, New York, North Dakota, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, Tennessee, Utah, Virginia, Washington, West Virginia and Wyoming. Residents of other states should ask their insurance agent about discounts. 

Policy changes. Older people with more assets may want to take the risk of going with a higher deductible -- and they might also want to boost liability coverage. Agather said you need to make sure that your liability limits equate to the assets you have at risk. "Just because you have an insurance policy, that doesn't limit how much you are liable for in damaging someone else," he warned. 

"Your assets are at risk if you hurt a brain surgeon or hit a Ferrari." To protect those assets, he recommends an umbrella policy that protects your assets if you are sued for more than the liability limit on your auto policy covers. "It also may make sense to drop comprehensive and collision coverage, which may be costing you $400 to $500 a year," said Agather. "Don't pay a lot of money to insure something you can afford to pay out of pocket," especially if you're driving an older car. (Logic Insurance article source and author: Drew Trachtenberg - Daily Finance)

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The Principle Auto Insurance (Part 2)

Logic Insurance, The Principle Auto Insurance  - In contrast, similar principles are routinely violated in health insurance. To demonstrate this, let's return to the same suburban mother from the opening paragraph. 

She's busy working, driving to and from work, and driving her kids to school and activities. She ends each day exhausted, sitting on the couch with fast food. She's obese, has a sedentary life, a bad diet, and hasn't taken the time to go to the doctor in years. 

After a simple injury doesn't heal for weeks, she turns up at the emergency room and learns she has type II diabetes. Although type II diabetes is controllable, changing diet and exercise habits and properly tracking her condition takes time and effort and she's never quite successful in implementing the necessary lifestyle changes.

The Principle Auto Insurance (Part 2)

So the initial emergency room visit is only the first of a long list of health care related to non-controlled diabetes and other problems associated with obesity. Whether she has individual or group insurance, her insurance pays for each episode of care, without singling her out for a premium increase, and without charging her any more cost sharing than is charged to the healthiest and most medically diligent insureds. 

Her coverage continues until she voluntarily changes insurance companies and/or employers or becomes eligible for Medicare. If she's covered under group insurance she may not even pay any premium. Her insurance continues unabated, even though the disease was caused by neglecting her body and she maintains her poor lifestyle even after the disease becomes known.

This just wouldn't happen in auto insurance. This scenario is the auto insurance equivalent of guaranteed access to low-priced auto insurance that takes care of every possible repair, including damage already done, until the day the car falls apart so completely it's unsalvageable (death) or reaches 200,000 miles (Medicare), regardless of whether she even changes the oil (takes care of herself) in the interim.

As a society, we don't expect this in private-market auto insurance, but we expect it in private-market health insurance. Furthermore, there's a chorus of national and state interests, which continuously pushes us further away from the auto insurance principles.

The current private health insurance market isn't sustainable. Prices have been consistently increasing faster than inflation for decades. Each year, insureds use more health care than ever before and more people have no insurance at all. Most actuaries and other people in the private health insurance market don't want national health insurance with its bureaucracy and one-size-fits-all benefits. Yet, we're trying to sustain a private insurance system, which violates the very principles we know are necessary for private insurance markets.

Yes, health insurance involves the sacredness of human life and is therefore different from auto insurance. But if we're to sustain a private-market solution to health insurance, actuaries need to explain to the larger society, in terms that society understands, the rationale for the following principles:

• As sacred as health care is, it's still an economic transaction that has to be balanced by individuals and societies, against other economic choices. It can't be unlimited. Sometimes it will be secondary to other choices. On a given day, for example, the mother in our scenario may value her car more than her health.
• Insurance premiums should be paid by the individual and tied to controllable risk factors. This will provide the best incentive for the control of risk factors.
• Although it's hard to draw the line between abuse, neglect and ignorance, self-abuse shouldn't be insured and we need to draw that line somewhere.
• The private market can't provide unlimited, self-directed health insurance.
• Routine care and ongoing treatments of chronic conditions can be pre-funded, can even be subsidized, but they don't constitute "insurable events."
• Insurance can't be expected to keep every human body in pristine condition. No amount of health care will prevent everyone's ultimate death.
• Comprehensive, unlimited, non-subsidized private-market coverage isn't possible for people with severely impaired health.
• The private health market can provide limited non-subsidized health insurance, such as protection from accidents, to even health-impaired individuals.
• Individuals who can afford to do so and who take good care of themselves should be able to "buy up" to better coverage. People have the option of buying up for everything else in life.

Discussion of these principles is lacking from most of the current health insurance debate. If society can intuitively understand how similar principles apply to health insurance, then they should be able understand the principles in the health insurance context. We need to initiate the debate. (Patt Carpenter)

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The Principles of Auto Insurance (Part 1)

Logic Insurance, The Principles of Auto Insurance -Many Americans rely on their automobiles to get to work. No automobile means no job, no rent or mortgage money, no food. A single parent, struggling to make ends meet in the suburbs with 100,000 miles on the odometer, would presumably welcome the guaranteed opportunity for low-priced insurance that would take care of every possible repair on her auto until the day that it reaches 200,000 miles or falls apart, whichever comes first. Especially if the insurance is valid regardless of whether she even changes the oil in the interim.

So why aren't the auto insurance companies writing such coverage, either directly or through used auto dealers? And given the importance of reliable transportation, why isn't the public demanding such coverage? 

The Principles of Auto Insurance

The answer is that both auto insurers and the public know that such insurance can't be written for a premium the insured can afford, while still allowing the insurers to stay solvent and make a profit. As a society, we intuitively understand that the costs associated with taking care of every mechanical need of an old automobile, particularly in the absence of regular maintenance, aren't insurable. Yet we don't seem to have these same intuitions with respect to health insurance.

If we pull the emotions out of health insurance, which is admittedly hard to do even for this author, and look at health insurance from the economic perspective, there are several insights from auto insurance that can illuminate the design, risk selection, and rating of health insurance.

Auto insurance comes in two forms: the traditional insurance you buy from your agent or direct from an insurance company, and warranties that are purchased from auto manufacturers and dealers. Both are risk transfer and sharing devices and I'll generically refer to both as insurance. 

Because auto third-party liability insurance has no equivalent in health insurance, for traditional auto insurance, I'll examine only collision and comprehensive insurance -- insurance covering the vehicle -- and not third-party liability insurance.

The following are some commonly accepted principles from auto insurance:

• Bad maintenance voids certain insurance. If an automobile owner never changes the oil, the auto's power train warranty is void. In fact, not only does the oil need to be changed, the change needs to be performed by a certified mechanic and documented. Collision insurance doesn't cover cars purposefully driven over a cliff.
• The best insurance is offered for new models. Bumper-to-bumper warranties are offered only on new cars. As they roll off the assembly line, automobiles have a low and relatively consistent risk profile, satisfying the actuarial test for insurance pricing. Furthermore, auto manufacturers usually wrap at least some coverage into the price of the new auto in order to encourage an ongoing relationship with the owner.
• Limited insurance is offered for old model autos. Increasingly limited insurance is offered for old model autos. The bumper-to-bumper warranty expires, the power train warranty eventually expires, and the amount of collision and comprehensive insurance steadily decreases based on the market value of the auto.
• Certain older autos qualify for additional insurance. Certain older autos can qualify for additional coverage, either in terms of warranties for used autos or increased collision and comprehensive insurance for vintage autos. But such insurance is offered only after a careful inspection of the automobile itself.
• No insurance is offered for normal wear and tear. Wiper blades need replacement, brake pads wear out, and bumpers get dings. These aren't insurable events. To the extent that a new car dealer will sometimes cover some of these costs, we intuitively understand that we're "paying for it" in the cost of the automobile and that it's "not really" insurance.
• Accidents are the only insurable event for the oldest automobiles. Accidents are generally insurable events even for the oldest autos; with few exceptions service work isn't.
• Insurance doesn't restore all vehicles to pre-accident condition. Auto insurance is limited. If the damage to the auto at any age exceeds the value of the auto, the insurer then pays only the value of the auto. With the exception of vintage autos, the value assigned to the auto goes down over time. So whereas accidents are insurable at any vehicle age, the amount of the accident insurance is increasingly limited.
• Insurance is priced to the risk. Insurance is priced based on the risk profile of both the automobile and the driver. The auto insurer carefully examines both when setting rates.
• We pay for our own insurance. And with few exceptions, automobile insurance isn't tax deductible. As a result, the fear of increasing insurance rates due to traffic violations and/or accidents changes our driving behavior and we sometimes select our automobiles based on their insurability.

Each of the above principles is supported by solid actuarial theory. Although most Americans can't describe the underlying actuarial theories, most everyone understands the above principles of auto insurance at the intuitive level. For sure, as indispensable automobiles are to our lifestyles, there is no loud national movement, accompanied by moral outrage, to change these principles. Please continue to The Principles of Auto Insurance (Part 2)

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How to Purchase Auto Insurance for Mexico

Logic Insurance, How to Purchase Auto Insurance for Mexico - Congratulations - you are embarking on an exciting road trip adventure to Mexico. You have your vehicle tuned and all of your gear packed, and now it is time to purchase your Mexican tourist auto insurance. Your Mexican auto insurance coverage decision could be the most important decision you make, but unfortunately it is often one of the most rushed and least researched decisions that many Mexico travelers make. 

Do not make the mistake of assuming that all Mexican insurance is the same, because the differences in insurance coverages and benefits can vary tremendously between Mexico insurance companies. Even though researching insurance coverage is not very exciting for most people, this article will show you how 5 to 10 minutes of research on the internet could save you thousands of dollars and many frustrating hours if you were to actually need to use your Mexico insurance to pay for a loss.

Purchase Mexican Tourist Auto Insurance

The vast majority of Mexican auto insurance is now purchased directly from the internet. There are a number of websites that sell Mexico insurance, and buying your insurance from the internet makes a lot of sense for the customer. 

Would you rather wait till the last minute to buy your insurance at the border, or would you prefer to buy your insurance from the convenience of your own computer before you leave on your trip to Mexico? Most customers prefer to get their insurance taken care of ahead of time.

The best websites to buy your Mexico insurance from are ones that offer multiple Mexico insurance companies. This allows you to do comparison shopping through one website instead of filling out multiple quotation forms on multiple websites. One good Mexican insurance website with a comparison insurance rater will save you a lot of time and confusion.

Which websites can be trusted?

Before getting your insurance quote, make sure to look for a valid insurance license and contact information. Also, you may want to look for a 'Surplus Lines Broker' license number. A surplus lines broker is an insurance broker who has a direct contract with the Mexican insurance companies and is licensed to sell foreign insurance coverage within the United States. 

A surplus lines broker license is a good sign that the website is run by a company who specializes in Mexico insurance. If the insurance license is not a surplus lines broker license, this means the website is most likely run by an insurance agent who is selling through a surplus lines broker. 

This does not mean the products on the website are not valid, but you may not receive the same level of customer service as you would from a surplus lines broker who specializes entirely in Mexican insurance. You may also want to look for a Better Business Bureau listing and some sort of internet security approval such as Hacker Safe or McAfee Secure to ensure that your information will be secure during your internet transaction.

Mexico insurance coverage to look for

Once you have selected a website that sells Mexico tourist auto insurance, you will fill out the quick insurance quote form. Within a minute, you should be able to get a firm quote and begin researching the benefits of the insurance products offered. Remember, this will be a much quicker and streamlined process if you use a website that offers multiple competing insurance companies all under one quoting system (a comparative quote rater).

Look for a chart below or above the insurance prices that clearly explains exactly what the Mexico insurance limits are and what is actually covered. In this chart, you will want to look at the following categories:

Deductibles: The best Mexican insurance policies will offer fixed deductibles, meaning the deductibles will be locked at a set amount regardless of what the value of your vehicle is. Some of the less expensive policies will base deductibles on a percentage of the vehicle value. If the vehicle's value is less than $20,000, percentage based deductibles may be fine, but when vehicle values get up in the $30,000 range or higher, the percentage based deductibles can get very high. If the website does not specifically list the deductibles, you should not use that website!

US Hourly Labor Rates for Repairs Made in the US or Canada: In the old days, most Mexican auto insurance companies tried to make customers repair their vehicles in Mexico. Repairs made in Mexico instead of the US were often much less expensive for the Mexican insurance companies, and many customers were unwilling to leave their car in Mexico, so the company got out of paying these claims. 

Today, many of the better Mexico insurance programs allow you to fix your vehicle in the US or Canada if you wish. The catch is that some of the less expensive Mexican insurance programs will only pay a limited hourly labor rate for repairs made in the US (some as low a $20 per hour). 

This means the customer would have to pay the difference in hourly labor rates out of their pocket. The best Mexican insurance programs will pay very high US labor rates such as $70 per hour or state that they will pay whatever the current US hourly labor rate is. These policies could significantly minimize your out of pocket expenses in the event of a claim. If the Mexico insurance website does not specify if repairs in the US are allowed or what the hourly labor rate is, do not use that website to purchase your Mexican insurance!

Vandalism and Partial Theft Coverage: Vandalism and partial theft (meaning only part of the car is stolen such as the tires, door panels, etc) is typically not covered by standard Mexican auto insurance. In the past few years the higher quality Mexican insurance programs have started to offer this coverage in their enhanced coverage programs. If you want to protect yourself against as many types of losses as possible, you should look for this coverage.

Liability Limits: This is the portion of the Mexican insurance policy that pays for damages you cause to third parties. This coverage is essential when traveling in Mexico. Most people in the industry feel that $50,000 worth of liability insurance is probably the minimum you should consider. Some of the best Mexican insurance programs will go up to $300,000 combined single limit (a lump sum for property damage or bodily injury damages), but it will also increase the insurance premium. Some customers wish to carry these higher limits to work in tandem with their US umbrella liability policies. You may want to ask your US insurance provider if your umbrella insurance will recognize your Mexico auto insurance as a primary coverage.

Medical Payments: This is the portion of the Mexico insurance policy that pays for medical costs for you and your passengers (people inside your vehicle). $2,000 per person with a total of $10,000 per accident is the lowest limit you should consider, but many policies will offer much higher limits. Some of the better policies will also increase this amount if you are hit by an uninsured motorist who is at fault. 

You may want to check with your US or Canadian health insurance provider to make sure they will cover you for medical costs incurred while traveling in Mexico. If not, you may also want to research an international health insurance plan - but that is a different subject.

Legal Service: Make sure your Mexico insurance includes legal service or legal assistance. This coverage will pay for any court costs, attorney fees, or bail payments that are a result of a traffic accident in Mexico. 

The service will also dispatch a legal representative to hold your hand through any legal procedures. This coverage is absolutely essential, so do not purchase any Mexico auto insurance that does not include this coverage!

Road Assistance: Most of the better Mexico insurance companies will include some level of road assistance that will cover towing expenses, flat tires, locksmith, and other services. This is a great coverage to have, so make sure this is included with your Mexico insurance policy.

Medical Evacuation: As the market for Mexican insurance becomes more competitive, many Mexico carriers are now bundling in extra special coverages to make their products stand out. When medical evacuation is automatically included with your Mexico auto insurance, it is an incredible value and convenience. 

This coverage will coordinate and pay for air or land ambulance services in the event of 'grave illness or injury'. This means life threatening or very serious illnesses or injuries. Purchasing a medical evacuation program on your own will often cost hundreds of dollars per year, and can often have many limitations. 

The quality Mexico auto insurance programs that bundle in the medical evacuation coverage will usually cover multiple people in your travel group automatically up to four or more people. Make sure to look for how many people are covered by the medical evacuation. 

If the amount of people covered is not listed in the insurance quote details, you can assume that the medical evacuation may only cover the driver. Other websites do exist that specifically cover 4 or more people in your travel group, so it is highly recommended that you look for websites that offer this broader medical evacuation coverage.

Plane Tickets Home: Another great benefit that many of the better Mexico insurance websites are offering is plane tickets home in the event that your car is stolen or not drivable. This can save you thousands of dollars, and alleviate the nightmare of needing to coordinate your transportation back to your home from Mexico. 

If this benefit is offered, make sure to see for how many people the policy will provide plane tickets home. If plane tickets home is not listed, or the website does not specify how many people are covered, you should check a different website. A few websites do offer coverage for four people or more in your travel group.

When in doubt, call the website customer service phone line for help

The reputable Mexico insurance websites will encourage you to call their customer service departments if you have questions about the Mexico insurance. If nobody answers the phone, or does not call you back within a few minutes (during normal business hours), you may not want to purchase your insurance from that website! Most Mexico insurance websites are like ATM machines. 

The website is there for your convenience if you want to write the policy yourself, but you are also welcome to call the website customer service insurance agents and have the agents write the policy for you over the phone.

If you check for each of these insurance coverages and website features while shopping for Mexican auto insurance on the internet, you are guaranteed to purchase the best insurance for your situation. 

Five to ten minutes of research could save you thousands of dollars and hours, if not weeks, of headaches in the event that you need to file a Mexican insurance claim. Be safe, and have fun in Mexico! (Jeff Nordahl)

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