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Car Insurance

A Blog About Driving and Car Insurance in the USA

Wednesday, December 03, 2008

Not Having Affordable Auto Insurance Could Get Your Vehicle Repossessed

car insurance lapseIf you watch TV or surf the internet at all, chances are you have seen one of the many commercials aimed at convincing consumers to compare rates for their car insurance. Everyone says that they have the best coverage for the best price, but some companies even offer rate comparisons at their expense to help you make the right decision. All of the geckos and Jackie-O-esque spokespersons can make one shy away from actually getting the quotes because of the constant bombardment of advertising. But what if the big corporations have a point?

My husband discovered a while back that maybe all of that pushing is actually a push in the right direction. He learned the hard way that not having affordable auto insurance can ultimately lead to getting your car repossessed. It sounds like a stretch, but it really happens, as it happened to my husband Lee once upon a time.

The story goes like this: Lee was performing a juggling act with his debts, and soon realized that he simply had more expenses than he had income. The automobile insurance he had on his SUV was too high for him to keep up with, so he let it lapse. His intentions were to catch up as soon as he could and stay off the road as much as possible until the situation was cleared up. Unfortunately, he didn’t get the opportunity to put his plan to the test. Midwestern-based ALF Insurance had a different plan in mind.

The insurance company reported to Lee's credit union that he was uninsured.

In a surprising but completely legal move, ALF Insurance gave LSI Credit Union the heads up on how Lee's insurance had lapsed, which took things from bad to worse. We all know that if a lending institution holding a lien finds that the borrower does not have proper insurance, they can slap their own expensive insurance plan on them without warning. LSI Credit Union did just that, and told Lee that if he didn’t want their sky high rates he should find his own insurance. Needless to say, that was easier said than done, not because the geckos and 60s receptionists weren’t there waiting with a quote, but because he couldn't afford what he had before, much less the new payment. Now the newly imposed car insurance was attached to Lee’s car note, which put the vehicle in jeopardy. He couldn’t manage to get a new policy and pay for the one that was now attached to his car loan. After months of struggling to make the new, inflated note, he had to submit to a voluntary repossession of his truck.

As a married guy with a pretty smart wife (if I must say so myself), Lee has grown from the experience and does a different juggling act these days. Instead of juggling debts, he is a bargain shopper, always with an ear to the ground on the best deals in commodities, food, retail items, and insurance, making 'the switch' whenever it is advantageous to do so. Considering the circus that is our current American marketplace, it's an act that's a lot more fun to watch.

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Sunday, December 30, 2007

Switched to Geico

I recently switched my car insurance to Geico. Sure, this sounds like a commercial, but it's true.

The company that used to insure me, State Farm®, was adequate, but they had a problem with me and my out-of-state driver's license. I tried to get my license transferred to my new state when I moved but, in my current state of residence, the ID requirements are way too rigid, so the whole process ground to a halt. If I had moved before September 11, 2001, I wouldn't have had any problems transferring my license.

So, because of the license issue, State Farm eventually decided that they no longer want my business . I didn't shed any tears when I got the news that I was being dumped. The customer service at the State Farm office where I was insured wasn't very cordial. I often got an "attitude" whenever I would ask simple questions about how my insurance policy works, and I don't like that. The way I see it, when you are paying a company good money for a service, and they give you an attitude like you are their employee, then it's time to go. Yup.

To be fair to State Farm, I can report that there is a different State Farm office near my current residence, and from what I can tell the service there is quite good. I went into this office some months ago to get a document notarized. I had to wait for the next available agent, since at that moment there were other motorists being helped. I sat down and listened to the conversations (I'm not nosy; the office was small and I could not help but hear the chatter.) The agents were polite and they took the time to explain things in detail, which is the way it should be. An agent eventually notarized my document, and didn't charge me anything for the service. The agent seemed a bit stressed with paperwork, a constant stream of walk-in clients and a phone that just kept ringing, but she still managed to smile and provide gracious service regardless.

Since each State Farm office is independently owned, I guess you just have to find the right office if you are going to insure with them.

Another reason why I wasn't too upset about State Farm's decision: there's so much competition out there that I knew I wouldn't have any trouble finding a new carrier, even with the time pressure (I needed a policy fast because a lapse of insurance coverage is serious matter. Most car insurance companies won't even consider insuring you if you have an insurance lapse.)

So I shopped around online, and eventually ended up with Geico. I signed up online, but made a phone call to Geico before executing that final mouse click to seal the deal. I needed to be sure that they wouldn't have a problem with my out-of-state license before I finalized my order. A very helpful agent told me that he understood my situation and that Geico didn't have a problem insuring me. So the deal was done.

So I'm now a Geico customer. My premium is reasonable (I'm paying about $200 less per cycle than I was paying with State Farm) because I'm over 35, I have a good credit score and a I have a clean driving record. I've never had to file an insurance claim, and I hope this trend continues. If I have to file a claim with Geico at some point, I'll be sure to blog in depth about it here.



Friday, December 07, 2007

Insurance Claim or Pay Out-of-Pocket?

Last week, a mechanic at the dealership where I take my car for servicing told me that my car did not pass inspection because it had a problem which they could not fix. Turns out the right spring pocket was so rusted that it was ready to fall off, and, she explained, if it was to dislodge while driving at high speed, I could end up in the hospital, or worse. The fix involved some welding, so only an auto-body shop could do the repairs. The mechanic recommended a place nearby for the job, so I made my way over there.

The owner of the auto-body place -- let's call him Ed -- told me that the fix would cost me about $870. I couldn't understand how such a small welding job could cost so much. I told Ed that I needed the job done so that my car can pass inspection, and I explained that my insurance company would not be involved. I unsuccessfully pushed for a discount. My understanding was that a discount is the norm when the vehicle owner isn't going to make an insurance claim. There goes that theory.

Ed then told me that I could simply submit a claim to my insurance company, since I have comprehensive coverage. I asked if this was legal, since the damage was caused by aging and not a specific incident, and he chuckled at my ignorance. "That's what comprehensive coverage is for," he said. I thought about it for a minute, then told him that I would pay cash for the repairs. I was worried about my insurance rates going up.

In hindsight, I'm not sure if paying cash was the right move. I can't work the numbers, because I have no idea how much my premium would rise as a result of a claim. I'm not losing sleep over my decision, but next time, if the bill is $800 or higher, I'll probably make the claim.



Tuesday, November 21, 2006

A Dual of Wills At A Highway Offramp

I was on my way to pick up my daughter from school. I had just started to make my way onto a single-lane offramp when I noticed a small, sporty vehicle in my rear-view mirror that was closing in on my car really fast. I drive a large sedan, so I certainly wasn't physically intimidated by the fast-approaching car. But I've learned to be a defensive driver over the years, so any situation that has the potential of ending in a car accident causes me to go into alert mode.

I didn't slow down or move to the side, but my gaze was locked onto the car, since I wanted to be prepared for any dangerously erratic moves by the driver. I wasn't doing anything wrong, so adjusting my driving would have been the wrong move.

To my surprise, the approaching car came right up to my bumper, then tried to squeeze past me on the right side, even though the lane had already narrowed to the point that only one car could realistically maneuver safely in the lane. I glanced to my right to see if I could catch a glimpse of the driver, but all the windows had dark tinting. I came to the conclusion that I was most likely dealing with a young, brazen and possibly drunk driver (the driver didn't even have his lights on, and it was way past dusk.)

Of course, I still had done nothing wrong, but at this point, I concluded that defensive driving -- i.e. letting the nutcase pass -- was the best way to handle this situation. So I applied my brakes to let the idiot pass (I'll refer to the crazy driver as Mad Max from this point forward), and, to my utter astonishment, Mad Max applied his brakes as well, slowing his car and matching my car's pace of deceleration. The next thing I knew, we had both braked to a complete stop. He didn't roll down his window, or honk, or anything. He just sat there, as if waiting for me to make my move.

At this point, I concluded that Mad Max realized how silly he was behaving, and tried to make right by not actually passing me.

But then an alternative explanation popped into my head: maybe Mad Max was in fact an insurance scammer who was trying to stage an accident. I'm familiar with some of the scams out there, like the guy who waves you out of a parking space then hits your car, or the scam where a car full of people swooshes in front of you on the highway, at which point the driver brakes hard, causing you to bash his rear, giving the driver and his/her passengers lots of fake yet expensive injuries.

Was Mad Max's strange behavior the preliminary steps of an insurance scam I wasn't familiar with? Or maybe it was a brand new scam, and I was to be it's first victim.

I really wasn't interested in sticking around to find out why Mr. Max was driving like a jackass, so I stepped on the pedal and quickly made my way around the tight curve of the exit ramp.

At the end of this particular exit ramp, one has to merge onto a three-lane boulevard. I merged, then crossed over to the center lane, at which point I stopped at a traffic light. About two seconds later, Max pulled up next to me and, after coming to a screeching stop, started to race his engine in a way that made it clear that he was interested in a quick and dirty drag race.

So, in the end, all this fool wanted was a good old-fashioned drag race. Ha! I guess some kids see the word "turbo" on the back of a car and make certain assumptions. I was surprised that my salt n' pepper hair and extra large baby seat in the back wasn't enough to sour Max's enthusiasm.

When the traffic light turned green, Max, as expected, burned some rubber and launched his car to the next traffic light -- which was red, and was only about 20 feet away. I drove at a snail's pace to the next light where Max was waiting, and he continued to challenge me by revving his engine. I stopped my car so that my front bumper aligned with his car's midsection, a clear sign that I had no interest in dancing, I thought. But this tactic wasn't necessary in the end, because another small, tricked-out sports car pulled up on the other side of Max, and, when the light turned green, the two raced down the boulevard until they disappeared from view.

One day, Max will learn just how costly bad driving can be, and he'll recall the stunts he used to pull with some embarrassment. I sincerely hope the inevitable accident that teaches him to drive sensibly is a minor fender bender, and not a 3-car pileup, or worse.


Friday, August 04, 2006

Most Car Accidents Are Caused by Driver Distraction!

Just the other day, I was driving with some family in the car. My mother received a phone call from her sister--my aunt--and they had a brief conversation. Just before the conversation ended, my mom instructed me to take the cell phone and say hello to my aunt. I quickly turned my head away--keeping my eyes on the road, of course--and told her that there was no way I was going to talk on a cell phone while driving.

You see, I learned my lesson a few years ago, when I got into a minor accident caused by some carelessness on my part. I was driving to the airport to pickup my brother, and, as I slowly approached a bunch of cars that were stopped at a red light, I somehow arrived at the conclusion that it would be a good time to change the radio station. I took my eyes off the road for a split second to check the FM frequency I was currently listening to, and, suddenly: bam! I hit the minivan in front of me. I was only traveling at about 5 MPH, and because I hit the minivan's bumper, the only damage to that car was a small area of scratched paint. My car, on the other hand, experienced some serious damage. The hood was crumpled, my grill was mangled beyond repair and one of my headlights was smashed. If I possessed the power to take you back in time and place you at the scene of the accident, I doubt I could convince you that my car and the minivan were involved in the same accident. The damage would have cost me at least $1,000 to fix if I had taken the car to a body shop, so I decided to fix the light myself, and drive the car with the dented hood (not pretty.)

That was a very sobering experience.

Since that accident, I don't let anything distract me while I'm driving. Nothing. If I need to use the phone, I pull over, put the car in "park," and then start dialing. Or, if it's not an emergency, I simply wait until I've arrived at my chosen destination, then make the call. Furthermore, whenever I'm on the highway, and I find myself near a car that's being driven by a motorist who's chatting on the phone, I move away from that car, either by speeding up, changing lanes or by slowing down, because I've learned--the hard way--that:

Driving + Any Distraction = Accident Waiting to Happen.


Driver Distraction Is To Blame for Almost 80% of All Traffic Accidents

That's right, folks: almost 80%, according to the good folks at InsureMe (Click here to get a free auto insurance quote) and the National Highway Traffic Safety Administration (NHTSA). A recently issued press release contains some interesting facts and advice related to the driver distraction. Details below:

" Prompted by recent reports on the hazards of cell phone use and overall driver distraction, InsureMe, a leading online insurance shopping service, is offering tips to reduce one’s risk behind the wheel.

According to a recent study by the National Highway Traffic Safety Administration (NHTSA), driver distraction is the culprit behind nearly 80 percent of all traffic accidents -- a much higher percentage than previously thought. The government agency credits cell phones with causing the highest number of driver distractions.

Additionally, researchers from the University of Utah say chatting on a cell phone makes a person five times more likely to have an accident and impairs driving ability as much as drinking alcoholic beverages.

With those stats in mind, InsureMe recommends limiting phone conversations while driving. Although many are loathe to give up their phones for even a minute, the benefit of hanging up is clear: safer roads for everyone (and lower phone bills.)

Even though they top the administration’s list of distractions, cell phones aren’t the only gadgets that distract drivers from the business of driving. The ever-growing list of electronic gizmos includes: DVD players, satellite radios, hand-held organizers, iPods, and global positioning systems. According to the NHTSA, 'drivers engaging in visually and/or manually complex tasks have a three times higher near-crash/crash risk than drivers who are attentive.'

There are also the constant, low-tech distractions: kids, pets, fast food, hot beverages, newspapers, road side accidents, signs and billboards. The NHTSA’s 100-Car Naturalistic Driving Study revealed that reaching for a moving object, such as a falling frappuccino, increased the likelihood of a crash by nine times.

Limiting distractions is relatively easy and will immediately result in safer roads for all motorists. InsureMe recommends that drivers curb their cars before: making and taking calls; changing the music; wolfing down a burrito; applying makeup; writing a text message; or replaying a young one’s favorite Lion King scene.

For most drivers, avoiding accidents is its own reward. But for those who need economic incentives to be safe, InsureMe notes that a person’s driving record is one of the most important factors in determining how much he or she pays for auto insurance."


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