Auto insurance and pay-as-you-drive insurance

One of the more interesting features of insurance is the degree of trust the insurer shows in what you say. Unless you are asking cover for something expensive and unusual, no insurer is going to ask to see whatever it is. You are allowed to add the vehicle or top-of-the-range electronic gizmo to the policy without question. But, if it later turns out you were less than honest, the insurer is allowed to cancel the policy and leave you without any cover. So the insurer is always protected and you pay the price of facing any claims without a policy to pay. Yet, while this has been standard in the insurance industry as a whole, there's been a reluctance to trust drivers to report their mileage honestly. Younger people claiming unusually low annual mileage have been greeted with skepticism. To qualify for a discount, people have been forced to drive to the local office of the insurer to have someone verify the odometer reading once a month. This has been inconvenient and not so many people have taken up the discount offer.
With new technology, all this is changing and insurers are now moving into the pay-as-you-drive market with more enthusiasm. In part, there are also environmental reasons for this change. No matter what you think of the climate change debate, there's no doubt more cities are being affected by smog. So whether this is big picture or the number of people lining up with asthma attacks at the local emergency rooms, there's a move to encourage people to drive less. Accompanied by improvements in the mile-per-gallon performance of new cars and better emission controls, there's now hope the air will stay breathable for longer. The pay-as-you-drive option gives people a direct incentive to drive less. Fewer miles driven means fewer accidents. If the full technological capabilities are introduced, it will also be possible to monitor whether drivers keep to the speed limits. Any vehicle reported stolen can automatically be tracked and recovered.
The first real signs of activity are coming in California. State Farm Mutual and the Auto Club of Southern California are introducing new policies in February 2011. Drivers will be given the choice of independent verification of their odometer readings or fitting a data transmission device. State Farm is estimating that people driving less than 2,000 a year will see their premiums fall by 45%. Using this as a base, State Farm is aiming to sign up at least a quarter of their current policy holders. Everyone who drives modest distances will save with rates set in 500 mile steps. Auto Club has four steps of 2,500 up to 10,000 miles and then the premium rises in 5,000 mile steps. At present, the Californian Insurance Commissioner is protecting drivers' privacy, so no general data will be collected by insurers.
So, if you live in California, your auto insurance quotes should include this option come February 2011. While this is not a revolution, it's certainly a change for the good, protecting the environment and encouraging better driving. Auto insurance is going green.

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Should there be federal regulation?

The Tea Party seems to be kicking up the dust, readying for a real fight over the notion of big government. This means we should talk about what government should be for. The Right seems to think there's no need for any central government except to run the defense of the country and manage the economy. The Left says there's always a need for government to protect the interests of the people, whether through education, healthcare, a transport system, and so on. It comes down to money. One side sees no need for central taxation, arguing everything can be done by individual states. The other says there should be national standards to ensure no one is penalized because of the accident of where they live. In a sense, this is an academic argument that can be allowed to pass us by when the economy is doing well. But with unemployment high and the deficit mounting, the questions have more relevance.
To explain the point with an example, let's go down to Texas where the race for the governorship is hotting up. One of the issues that's really firing up the local voters is the premiums charged for insuring their homes. It seems the average rates are about $625 a year higher in Texas than in any other state in the nation. Who would have thought it costs so much more to have a home in Texas. The Republicans admit the Texan rates are among the highest in the country (it's more statistics and damned statistics in play here), but say there's no need for any regulations to protect consumers. The current GOP governor is a free market capitalist. He believes in self-regulation and the power of the consumer. If you do not like a product, you do not have to buy it. There's always someone with a better deal and, if consumers act rationally, they will all move their business and put the bad companies out of business.
In fairness, there's a rule which requires insurers to notify the local Commissioner for Insurance if they are going to increase premiums and he can intervene if there's any evidence the rates are out of line. So, the Commissioner has no power to prevent a company from increasing its rates. And, since State Farm has been locked in litigation over the last time the Commissioner did intervene, the last eight years has seen no activity from the Commissioner to protect consumers. By coincidence, rates have risen by an average of about 50% during this period.
So, to sum up, if you live in Texas you pay more than anyone else for your home insurance and the premium rates can be increased without limit whenever the insurers decide they want more money from you. And the Republican governor thinks the system is working well? You can tell he's rich and can pay his home insurance without flinching. It's rare to find such a clear-cut issue so high on the electoral agenda. It will be interesting to see how the vote turns out and, if the incumbent wins, will this actually be a vote in favor of paying the maximum to insure your home?

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Car insurance and important life events

Changing your marital status, going on retirement or giving birth to kids - such events are important milestones in any person's lives that can change a lot of things. But rarely do people thing about the impact such events can deliver over certain financial aspects like auto insurance. Nevertheless, important decisions that change your live will lead to changes in the rates you pay for insuring your auto as well. And here are three most influential events that can seriously affect your insurance needs and expenditures:

Getting married

No doubt, marriage is one of the most important events in a person's life that changes a lot of things. From the financial point of view it means that your and your spouse's assets are merged together, and this of course leads to change in responsibilities and insurance needs. However, it might go as a surprise but marriage can actually help you save money on car insurance. The change of marital status itself already puts you in a certain group of drivers who tend to take fewer risks while behind the wheel (at least insurance providers think so). Besides, in a typical family with two or more cars you can save on car insurance by getting a single policy for multiple cars. Most insurance providers offer generous discounts for doing so, why not taking the advantage of it?

Widowed or divorced

Divorce or widowhood is a very tough situation for any person. Moreover, it can seriously affect your car insurance needs and costs. Being the sole car user in the household will certainly raise your premiums, sometimes much higher than you had prior to marriage. Still, there are some ways to cope with the situation. Of course, you should shop around for car insurance as soon as you realize that the rates went up. There is always competition on the market and you should use it to get the best insurance rates possible. Besides, you will have to renew your insurance needs, because some types of coverage that you needed in the past as a married person will now only push up your premiums without use. In case your budget has become really tight, consider raising the deductible up to the point you can afford. This will lower your premium. But make sure that the amount you've chosen is a sum of money you can really afford to pay upfront in case of an accident.

Going on retirement

Going on retirement is the perfect opportunity to review your insurance needs. First of all, you will spend less time in traffic because you won't have to visit the office every day. Besides, your driving experience will work in your favor and your rates will certainly drop. In many cases, retirement means that you don't need multiple cars in your household and your coverage options will also get downsized. So it's a perfect opportunity to get cheaper car insurance and enjoy traveling without having to worry about costly coverage. Still, it also pays to shop around since you can find even better rates after you retire.

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Why considering collision coverage?

When thinking about car insurance, most people tend to evaluate it as an unwanted expense and will take any chance to cut down its price. The most direct and obvious way to do so is to cut down all additional types of coverage, leaving only those required by the law. And one of the coverage types, which is usually sacrificed for cutting the value of the policy is of course collision coverage. People are used to underestimating the importance of collision coverage and overestimating their driving abilities, assuming that they will never end up being at fault in an accident. Unfortunately for most drivers, there are some cold-blooded facts that are really good for a reality check in terms of collision coverage:

• You may consider yourself as the safest driver in the world with the best defensive driving style possible. But don't forget that you're not the only one on the road, and you never know who you'll end up with in traffic. Regardless of how great of a driver you are, you can still cause an accident simply by being distracted or making a mistake because of other drivers on the road. And if you end up in an accident where you're at fault, it will be impossible for you to file claims against the other drivers and obtain coverage. This is only possible through collision coverage. And we all know how much a simple car repair or medical service can cost you when you need it.
• If you end up in an accident where both you and the other party claim being not at fault, it will take a special commission and analysis of the circumstance to determine who really caused the crash. And it could take months and even years, with a lot of additional expenses by your insurance provider. Until then, you won't receive any coverage and will have to either wait for the decision and receive coverage, or pay for repairing your car from own pocket. Having collision coverage would automatically pay for the damage done right after filing the claim.
• In case you crash into a pole, tree or fence, you have no one to claim against and it's still considered as collision. So you'll need collision coverage to pay for the repair.

The situations described above are quite common and many drivers who end up in them quickly purchase collision coverage afterwards, recognizing its usefulness. However, wouldn't it be smarter to get this coverage in the first place? The next time you get busy comparing auto insurance quotes make sure to include collision coverage as well. It won't raise your rates dramatically, however it will grant you useful coverage in a number of cases you can end up any day while being behind the wheel.
Don't forget that the amount of collision coverage depends on the market value of your vehicle. And those of you who are getting auto insurance quotes for a brand new car with many additional features may find it a bit expensive. On the other hand, those who drive mid-level cars that aren't new will have lower cost for this type of coverage. In any case, collision coverage is money well spent and you won't regret getting it when it pays for your repairs after the accident.

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Car insurance quotes for home-based enterprises

When small business owners who have their home-based enterprises think of buying a new car that is to be used by the business, they always confront with the dilemma whether they need individual or commercial vehicle insurance. In many cases the coverage provided by personal policy carried by business owners provide just the right amount of coverage to have the vehicle protected. Still, for home-based businesses the picture might be quite different
Insurance experts agree that it depends on the exact purpose of your vehicle's use in the business. If you're a real estate broker, for example, and simply drive to work from home, taking clients with you on occasion then you don't need commercial auto insurance since your personal policy will be enough to cover any costs. However, if you have a regular delivery of products with your car or take passengers all the time as a part of your job then you will have to purchase commercial auto insurance, since the vehicle will be regarded as a part of your business assets and has to be covered respectively.
For home-based enterprises it's very important to have the third party liability limits in check in order to assure that both personal and business assets are covered properly. Because of this, the amount of your liability coverage and your deductible are the main variables that will determine the cost of auto insurance for your business. The larger is the amount of coverage and the lower is your deductible, the more you will have to pay for insurance in premiums. And don't forget about your yearly mileage, driving record and the list of persons who will operate the vehicle - these factors will also affect your insurance premiums.
In order to lower the risk for your business, your liability coverage limits should be higher with a commercial insurance policy as compared to an individual policy. As a business, you may be subjected to larger claims, because the other party involved in the accident can follow you both as an individual and as a business. Because of such vulnerability, car insurance quotes for commercial auto insurance tend to be higher when compared to individual policies with the same coverage amounts.
In case your business involves taking a lot of equipment with you while you're driving the car, and you also have a homeowners insurance policy, your equipment will have a certain amount of coverage. Still, in case if the value of the equipment is rather high, your car and home insurance policy can provide too little coverage, so you'll have to buy a rider and get additional coverage amount for your equipment. A typical business owner insurance policy will cover damage and liability in the amount of up to $10,000. If this is not enough to replace your equipment in case it gets destroyed, then you definitely have to buy more coverage.
Commercial auto insurance goes by the same rules as any other form of insurance. If you want to get better rates, you should check car insurance quotes and do some comparison shopping with different companies. However, keep in mind that you will have to get car insurance quotes with respect to your higher liability limits. Don't strip down the policy to the bare minimum as your business may depend on it.

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