Saturday, July 14, 2007


Whenever you get behind the wheel of a car, you are capable of causing damage to other people’s property, and injuring or killing yourself, other drivers, passengers and pedestrians. Because most people don’t have the money to pay for the losses they might cause while driving, governments throughout the developed world require drivers to carry a certain amount of insurance (“Liability”) to cover any losses (property damage, injury, death) they might cause others to experience. Some governments, including those of every province and territory in Canada, also require drivers to carry coverage for their own medical expenses and loss of income resulting from driving-related injuries (“Accident Benefits (AB) or Bodily Injury (BI)”).
There is other insurance that you can purchase voluntarily for your car, including coverage for damage to your car (“Collision”) and protection against theft, vandalism and other perils (“Comprehensive”).

How Insurance Works

While it may seem complex, insurance is really quite simple: The payments (or premiums) of the many pay for the losses of a few. Your premiums go into a large pool, if you will, at your insurance company. The claims of the few are paid from that pool. Because there are more people contributing to the pool than there are making claims, there is always enough to pay the claims – even large single claims like when someone is permanently disabled as a result of a car collision, or many smaller claims like those resulting from a natural disaster. (The 1998 ice storm that hit parts of Ontario, Quebec and New Brunswick resulted in an estimated 700,000 claims for damage totalling $1.4 billion.) However, large disasters (such as the ice storm) do come close to emptying the pool.


TOP Tips For Cheaper Car Insurance

TOP tips for getting a cheaper car insurance:

Fit an alarm

Fit an approved alarm and immobiliser. All improvements to security should help to lower your car insurance costs. Some insurers could even insist on sophisticated tracking devices before they will insure expensive cars.

Change your excess

Change the excess you are prepared to pay on any claim to reduce the premium. With voluntary excess the more you are willing to cover yourself in the event of an accident the lower your premium.

Check your mileage

Check your mileage to make sure you are not paying extra for miles you are not covering in your car insurance. If, for example, you change jobs and have a shorter commute to work you could be saving money. Try and work out how many miles you will genuinely cover - but don't get it wrong as inaccuracy could jeopardise your claim.

Minimise your optional extras

Only select to have a courtesy car or legal expenses if you really need them, as they may increase your premium. The less your motor insurance company has to provide in the event of an accident, the lower your costs.

Be careful where you park

Keep your car parked in a locked garage overnight if you can - this can help reduce the premium. More than 50% of vehicle thefts occur during the night so if your car is safely locked away it makes sense that your insurance costs will be reduced as a consequence. If you don't have access to a garage, then parking on a driveway is generally considered a lower risk than parking on the road. It's less likely that vandalism, theft or accidental damage will occur when you're off the highway.


Car Insurance FAQ

Below are frequently asked questions and answers about car insurance

What benefits do I receive from choosing to shop for car insurance online?
When you shop online with Progressive, you can choose from a variety of car insurance coverages to fit your lifestyle and explore "what if" scenarios, such as how much will your insurance change if you move, buy a car or add a driver. It's up to you to explore the possibilities — and it takes about 6 minutes.

How can I receive rates for other car insurance companies?
To receive rates for other leading auto insurers in your state, you must get a Progressive Direct car insurance quote first. Once you receive your quote, you can answer a few more questions to compare our rate with rates from other leading car insurance companies.

Why do I need to give so much personal information? Will everyone have access to my personal information?
When you complete a Progressive quote, such as a Progressive Direct or Progressive Drive car insurance quote, we only collect information necessary to provide accurate insurance quotes. Access to your information is limited to people involved in processing this information for sales, customer service or claims service. It is not our practice to request personal information solely for marketing purposes.

Why can't I receive a quote online?
We are unable to provide an online quote in the following cases:
You have a 1980 or older vehicle.
You have more than five drivers and/or four vehicles.
You have an out-of-state vehicle.
You (or a resident of your household) are a student or in the military AND reside out of state with a vehicle.

What if I forget to tell you about something on my driving record?
The quote Progressive provides is based on the information you give in your application. If you decide to purchase a policy, we use consumer reports to verify driving and claims records. At this time, any forgotten information will be added, and your insurance premium will be adjusted to reflect the confirmed driving record.

Why must I list all household members if they do not drive my car?
For coverage purposes, all family members of driving age who are residents of the household must be listed on your policy to protect both you and Progressive. In some states, exclusions are available for family household residents who do not require coverage.

Who do you consider to be a family member?
A family member is any immediate or extended family member of driving age. This includes parents, children, siblings, grandparents, aunts, uncles, cousins, foster children, in-laws and stepfamily members.

Who are household members who do not require coverage?
Household members who do not need to be included on your quote are non-family household residents who do not drive the vehicle. For example, roommates may fall under this category.
What if I live in a dormitory?Immediate roommates who are not family members and do not drive the vehicle do not need to be included.
What if I live in a military barracks?Additional barracks residents do not need to be listed as drivers.

What if I have more than five household residents as drivers?
If you have more than five drivers, you will be unable to complete an online quote with Progressive.

What is an accident?
Progressive considers accidents to include at-fault, not-at-fault, reported and unreported collisions that you, as the driver, were involved in. Not-at-fault occurrences in which your parked vehicle was damaged in a collision also are considered accidents.


Car Insurance Realities

People who live in the city pay more to insure their cars than people outside the city. Within a state, city dwellers usually pay more for car insurance than rural residents. Cities have a higher risk for claims due to more traffic, more people and more theft, which generally means higher car insurance rates.

An accident can make my rates go up, even if it's not my fault. Accidents that are your fault have a direct effect on your car insurance rate. Depending on the circumstances, you also may be placed in a group of customers who receive higher rates, even if an accident isn't your fault.
Progressive will group drivers with others who share similar risk characteristics. Common practice in the car insurance industry is to rate drivers based on data collected for other drivers who share similar characteristics, which overall is a solid predictor for car insurance rating.
Anyone who drives my car with my permission is covered if I have insurance. If you allow someone to drive your car, that person is covered by your insurance policy. Keep in mind that if the person who drives your car doesn't have insurance and causes an accident, you could be held responsible for the damage, which could make your car insurance rate go up.

Information from my credit report is used when determining my car insurance rate.We order your credit report and use information from it to calculate your insurance score — this score is used when determining your car insurance rate. We use credit because numerous studies have shown that credit is a very powerful and independent predictor of the likelihood of future accidents or insurance claims. In fact, Progressive data shows that consumers with the worst insurance scores are twice as likely to have an accident or insurance claim as those with the best scores.


Car Insurance Myths

Red cars cost more to insure. Color is not a factor used to calculate car insurance rates — we don't even ask you what color your car is when you get a quote from us. Factors that do matter are the year, make, model, body type, engine size and age of your car, as well as drivers on your policy.

One speeding ticket will make my car insurance rates go up. Sometimes this is true, but in many cases, you have to get two tickets before your rate goes up. Your driving history, the length of time you've been insured with a company and how fast you were going when you were cited can affect whether your rate increases or not. Keep in mind that a speeding ticket may not be the sole reason your rate increases, as several factors are considered when reviewing them.

Auto insurance rates aren't regulated, so auto insurance companies can charge what they want.Each state requires auto insurance companies to file how they calculate customer rates, and insurers cannot deviate from these filed rates. Each state also has regulators who review that information and the rates companies charge.

I only need the bare minimum amount of car insurance. Many states have minimum car insurance requirements, but the minimum amount of required insurance may not cover all of your costs. If you cause an accident that results in a lawsuit and your insurance limits don't cover all of the damages, your assets could be pursued.
Cheaper cars cost less to insure. If your cheaper car has a large engine, weighs a lot or is an unusual model, it might cost more to insure than a more expensive small car. However, if you have a cheaper car, you will pay less for Comprehensive coverage, which covers damage caused by vandalism, hail, fire or animal accidents.

If someone driving my car causes an accident, I won't be held responsible.It's possible you'll be financially responsible for an accident — even if someone else is driving your car. In most states, the car insurance policy covering the vehicle is considered the primary insurance, which means that the insurance company for the vehicle must pay for damages caused by an accident. Even so, it's still possible that the driver's insurance company could be responsible for some of the damages. Why? If the vehicle's insurance limits are too low and don't cover all the damages, the driver's insurance may be next in line to pay for the remainder of the damages.
Since policies and laws differ by state, knowing how your state's insurance system works could influence who drives your car.

Older cars are cheaper to insure. Car insurance rates for all vehicles vary depending on several factors, such as who drives a vehicle and its annual mileage. For older vehicles, many drivers choose to carry only Liability (BI/PD) coverage, which covers injury or damage to other people or property, not damage to the insured person or vehicle. Liability only coverage may be cheaper than insuring a vehicle with Liability, Comprehensive and Collision coverage.

My car insurance rates will be higher if I'm a smoker. Your car insurance rates will not be higher if you smoke — we don't even ask you if you're a smoker when you get a quote from us.
My car insurance rates will be similar to my neighbor's rates. Car insurance rates are individually determined, so factors such as age, driving record, type of vehicle and marital status are considered. Each person's situation is unique, and car insurance rates will vary because of this.

Car insurance rates go down dramatically when drivers turn 25. Younger and older drivers typically have the most car crashes, and customers of different car insurance companies have different claims experiences. When determining auto insurance rates, insurers generally consider a variety of information about you, including age, vehicle information, claims history and the claims experience of other customers like you.

While it's generally true that rates will go down when you turn 25 if all information about you and your vehicle remains the same, changes in one or more of the other pieces of information used to calculate a rate could lead to you getting a higher, lower or the same rate when you turn 25.
Comprehensive coverage protects drivers in all situations. Comprehensive coverage is one type of protection available on an auto insurance policy (others being Collision, Uninsured Motorist, etc.). Comprehensive coverage pays only for damage caused by an event other than a collision, including:
Weather (hail, floods, etc.)
Vehicle collisions with animals

Rental Reimbursement coverage protects drivers who crash their rental car while on vacation. If your insured car is in the shop as a result of an accident, Rental Reimbursement coverage pays for some or all of the cost of a rental car (depending on the limits you select).
Having more than one insurance policy with the same company always results in a cheaper car insurance rate. Buying more than one type of insurance, such as auto and homeowners insurance, from the same company doesn't always mean you're getting the best rate available. Often, you can save money by purchasing different products from different insurance carriers.


Benefits of Online Car Insurance

What are the benefits of shopping for and purchasing car insurance online?

That’s a good question, as in a lot of cases it is the car insurance providers that are benefiting from the reduced costs of providing online car insurance quotes. Giving a quote for car insurance online costs a fraction of the cost of providing quotes via the telephone. Companies operating call centre businesses, i.e. a telephone business, have to staff the call centre and pay for the infrastructure that comes with that and pay for the phone calls via 0800 numbers in the majority of cases. All of this costs money, whereas to provide car insurance online, all a company has to do is develop an online quotation engine that is accessible 24/7.

Rather than pass this cost saving onto customers in terms of reduced premiums, some companies opt to use this to increase their profit margins. However, this is not true in all cases and more and more of the big name Insurance providers are now offering reduced rates for online quotes and in some cases, reduced discounts if you continue to purchase the policy online rather than calling a contact centre to buy it.

So, looking at things from a non financial perspective, the Internet does provide several benefits when looking for this essential cover. Firstly, it enables you to obtain several quotes, twenty four hours a day, three hundred and sixty five days a year without the high pressured selling tactics often experienced when dealing with a company over the telephone. What’s more, if you do like the policy and price of a particular offering, it might even be possible to purchase the Insurance there and then.

Making changes to your insurance policy can also sometimes become a bit of a drag, but certain companies, such as now allow you to amend the policy details of your car insurance online. This is particularly useful if you wish to change your car and want to replace your old vehicle on the policy, or maybe add your friend to your Insurance policy on a Friday night, when you are about to travel away for the weekend, when call centres are closed.

Basically we feel that shopping for, buying and servicing your car insurance online is the way forward, although it is also important to have good telephone customer service as a backup in case you ever run into any difficulties or have any queries that can’t be answered online.


Classic Car Insurance

What are the benefits of classic car insurance?

If you own a classic vehicle that will cover very little mileage per annum, it may well be worthwhile investigating whether you would be eligible for a classic car insurance policy, which will almost always work out cheaper than a conventional policy.

There are several specialist classic car insurance providers in the UK. Footman James are one, based in the West Midlands and have a team of over 100 trained staff who can provide advice on your classic car insurance needs. Classic policies are not only generally cheaper than standard policies but most will contain specific features that we will touch upon below;
Most classic car policies will provide “guaranteed values”. This feature is essential when insuring a classic vehicle as often the value of the car will be dependent on the condition, mileage, level of restoration etc, so one man’s MG Midget is going to be worth a lot more than another’s. A standard Insurance policy does not differentiate a vehicles value to this degree and certainly does not offer a guaranteed value.

Any driver cover is also useful for a classic policy, as is roadside recovery cover – yes some older vehicles may not be as reliable as today’s mass-produced models! The trade off for a cheaper insurance policy that actually provides better cover than a standard policy is that all classic car policies come with a restricted mileage clause. This can be from 1,500 miles per annum up to a maximum around 6,000 per annum for most policies. The less miles you do, the cheaper the cover is!

Footman James, the company we mentioned above, also offer a very unique feature. They offer a classic car insurance policy that will cover several vehicles on one policy, with the premium being based on the combined mileage of all vehicles. As they know you can’t drive all of your vehicles at once, they do not charge for on the road cover of vehicles that are securely parked in your garage. The great Sir Stirling Moss O.B.E Insures his cars with them, so can’t be to bad at all!

The value of some classic cars is astounding, for example, an E-Type Jaguar that might have cost a couple of thousand pounds when it was new in 1975 is now being offered at £37,500. There are several companies around who professionally restore classic E-Types, some also Series 3 XJ Jaguars giving them up to date handling and ride systems with improved reliability.


Car Insurance Rate

Your Car insurance rates are determined by a number of factors:

- driving record
- usage, how you are using the vehicle,work, pleasure, business
- how many drivers you have and their ages

- how many vehicles you have
- what kind of coverage limits you want
- what area you live in
- your payment history
- what color car you drive
- your insurance credit score
- your claims history
- your occupation and how many years you have
- lived at your current residence
- how fast you can solve a Rubix cube
- your daily, weekly, annual mileage

There is a lot of information about you that is used to determine your rates. You are grouped or pooled together with similar drives of the same background that way you are not paying for drivers that are much worse than you.


Car Insurance


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