Apr 04
adminArticles
A sad statistics in auto insurance industry shows fraud rates are increasing every year, causing a lot of additional costs and pushing up the rates for law-abiding insurance users. It is estimated that every year more than hundred thousand auto insurance claims are investigated as suspicious. Every fraudulent claim filed intentionally and paid by the insurer automatically raises the cost of insurance for all other customers, so in the end it’s us who pay for others’ scams. And what’s more disturbing is that under certain schemes normal drivers also become involved in scams, falling prey to their initial masterminds and forced to pay for things they shouldn’t. In order to avoid becoming a victim in such a situation it’s important for you to learn about some of the most common schemes and scams used on the road. Of course, they tend to change and evolve with time but the basis mostly remains the same with a set of schemes that are utilized the most:
Swoop and squat
Under this scheme, there are two cars working as a team to target their victim. The first one pulls in front of the victim and the second in front of the first car. When the second car pulls in does so in a way so the first car is seemingly forced to hit the brakes, making the victim’s car rear-end the first vehicle. This scheme is often executed at small narrow roads where it’s harder for the victim to avoid collision with the first car.
Sideswipe
This scam is usually applied at busy intersections with double lane left turns. The perpetrator crosses the center line and as the victim enters the same turn sideswipes him, ultimately claiming that the victim entered his lane and caused the collision.
The best way to avoid falling victim to such schemes is driving cautiously and defensively. Always make sure that there’s plenty of room to avoid collision or hit the brakes if necessary. Besides, by applying to defensive driving courses you can also opt for a discount from your auto insurance company.
Drive down
This scheme is applied when the victim tries to merge with the traffic from a minor road. The fraudulent driver gives a signal to the victim allowing him to drive but when he does so, the suspect crashes into him, subsequently denying any signal that the victim claims were given by the suspect driver.
Start and stop
The victim’s and perpetrator’s vehicles are positioned in the same traffic lane, often stuck in a jam or waiting for the traffic light to switch. The suspect’s vehicle, which is stationed in front, starts driving and as the victim follows suddenly stops causing a rear-end collision.
However, if you ended up in such an accident there are also measures you can take in order to expose the fraud. First of all, make sure to call the police regardless of your fault and insist that a report is made. Note all the information about the other party involved, including the number of passengers, their names, contacts and license number of the driver. Furthermore, write down all the damage caused by the collision as well as the state of the other party’s car. Quite often the perpetrators will claim for body injury for people who weren’t in the car and state that the victim has caused more severe damage than it was actually at the site.
Mar 29
adminArticles
Car owners of all ages are obliged to purchase auto insurance if they want to drive a car safely and legally. You can’t be too young or too old for having insurance, that’s how things work. But your age can certainly determine the amount of money you will pay for having your car insured and for some groups of drivers cheap auto insurance isn’t that easy to get through this perspective. So let’s take a closer look at the link between the driver’s age and how much he or she will pay for auto insurance.
Insurance companies use the age of the customer as an important factor when determining their rates simply because it allows them to directly predict how it is likely for the driver to file a claim. All insurance companies rely on statistic analysis and according to it different age groups tend to produce different numbers of accidents in a given period of time. Drivers aged less than 25 are considered to be the most risky to insure since they produce the most accidents due to their lack of driving experience and general risk taking behavior. That’s why teens are charged with the highest rates. If the driver is older than 25 he or she automatically gets lower rates because this group of drivers produces less accidents. The general rate trend is descending from there on to the age of 65, with a minimum between 35 and 45 years where drivers are considered to be the safest and tend to get cheap auto insurance nearly all the time. But those who are 65 and older have a drastic increase in their rates that is explained by more accidents produced due to poor health condition and reactions. So if we look at auto insurance rates from the age perspective there will be a U-shaped curve starting with teenage and ending at senior age.
What should you do if you make part of a group that has higher rates and still want to get cheap auto insurance? First of all, shopping around is a must in your case and you should be more rigorous during the process until you find exactly what you need. Discounts are another tool you can use to get cheap auto insurance as there are attractive offers for both teen and senior drivers that you should ask your carrier about. And don’t forget that switching your car to a model that is cheaper to insure is also a measure to consider.
Feb 13
adminArticles
If you ask a Libertarian for an opinion on people who hold their hands out for federal government or state aid, the printable version of the reply is likely to refer to such people as scroungers who should pay their own way through the hard times. The Tea Party is also hot on the subject, asserting the perils of Big Government. If it’s too quick to step in to help citizens in trouble, why should those citizens take any precautions. They can just sit back with their hands out and, sooner or later, the Government will put some money in it. Everyone on the right points to the private insurance industry and pushes the notion everyone should pay for cover and never be allowed to rely on tax dollars for support. There’s a slight change of tone when a disaster hits the home of a Libertarian. Then there’s criticism of the slowness of the response by federal government. Such is life for the flip-floppers.
For the more rational members of the community, there’s no such thing as too much help if there’s a disaster. The more Government or state aid, the more quickly the community can be put back on its feet. This help should not just look at the big picture of repairing roads and bridges so people can move around again. It also comes down to the individual level for those most in need. Not surprisingly, the federal government recognizes there are whole swathes of the population who either cannot afford health insurance or will end up underinsured – this includes those who think they are lucky enough never to be affected by a natural disaster. This brings us to the Federal Emergency Management Agency (FEMA). This federal agency has the responsibility for coordinating the response to any disaster. It can be man-made like an explosion at a nuclear power plant, an erupting volcano, or a hurricane producing a major storm surge. If the scale of the resulting disaster is more than a state can reasonably be expected to deal with on its own, FEMA steps in to offer its expertise.
This includes its Individual Assistance Program, designed to help those who are uninsured or underinsured. This aims to offer practical help to move home contents into storage, provide temporary housing while reconstruction work continues, and cover the cost of any medical treatment for injuries sustained in the disaster. Note you cannot claim twice under an existing policy and then under the FEMA program. If there’s overlapping cover, you have to decide which one to claim against. But if your cover is not going to be accessible because you cannot afford the high deductible or because you were underinsured in any event, the FEMA program will help bridge the gap. Indeed, the FEMA program can be the difference between having nothing and having some clothes to wear and somewhere to live while the situation is stabilized.
If you live in an area which is prone to flooding or seems to be getting more than its fair share of catastrophic weather events, you should look at the FEMA Individual Assistance Program. It may not be a substitute for conventional homeowners insurance quotes from a private insurer, but you should know what additional help is available when you getting your next homeowners insurance quotes.
Jan 16
adminArticles
You may want to believe insurers are hot competitors and never talk to each other. Except you would be wrong. There’s a steady flow of information into two central databases. The bigger and more important is called CLUE (Comprehensive Loss Underwriting Exchange) with the smaller competitor called A-PLUS (the Automated Property Loss Underwriting System run by Insurance Services Office Inc) which collect a broad range of information about you and how you relate to insurance companies. This is not just details of the claims you make. A range of factors are combined to produce an insurance score. This parallels the work done to create a credit score, and both scores are used by insurers to create a risk profile for you and set insurance rates. So, for example, both organizations record when you ask for clarification of your cover even though this does not result in a claim. It even records whether you are late in paying any of the premium installments. There’s also a positive effort made to collect public information about you, e.g. whether you are involved in litigation, have judgments against you, are subject to foreclosure orders, and so on. If any of this information is incorrect, it could mean you are only offered cover at high rates or you are refused cover. Because of this, many states have passed laws to give you basic rights. You will usually find your local rights set out on the site run by your state’s Insurance Commissioner.
The CLUE reports are sold by LexisNexis and provide information about all claims relating to your home or your vehicle. The key problem is that, if the score is very low, it could cause your home address to be blacklisted. While this might be an accurate assessment of your risk profile, it would do a significant injustice to anyone later buying your home. As an aside, all the information is stored for not less than five years so insurers use your history of claims to assess the risk you will file another.
The Gramm-Leach-Bliley Act is supposed to help you by requiring insurers to tell you when they share your information with anyone else, except CLUE reports are excluded from the Act. This brings us to the Fair Credit Reporting Act (FCRA) which does apply equally to credit and CLUE scoring. You have the right to ask LexisNexis and ISO Inc for one free copy of your insurance report every year. If you find any inaccuracies, you are entitled to have them corrected. If you feel the response of either LexisNexis or ISO Inc is unsatisfactory, you can insist a note is included in your file explaining your views. Unfortunately, you have no right to opt out of this sharing arrangement. Your insurers are entitled to continue sharing this information.
To protect yourself from higher home insurance quotes, you should routinely ask for a copy of your CLUE reports once a year. You also have a right to a free report if the insurer makes an “adverse decision” based on a CLUE report. The FCRA is there to protect your interests and, since home insurance rates can rise rapidly and without explanation, you should always find out what your insurance score is.
Jan 13
adminArticles
In the days when life was simple and there were few risks, the insurance industry was profitable and able to offer a reasonably good service to its customers. But now the world is more complicated, there are real challenges for the insurers. If you look at the market for insuring vehicles, you can see the extent of the change. Back in the 1950′s, there were not that many people on the roads but, thanks to the arrival of the Boomers, the number of drivers increased dramatically and car ownership expanded. Millions of new vehicles came on to the roads. With all the extra vehicles, the chances of being involved in an accident increased. As more people had access to credit, they were buying new vehicles which were more expensive to repair or replace. The cost of labor to do all the repairs was also rising fast. Put all this together and you have a recipe for rapidly rising premium rates.
Apart from accepting a higher deductible, the main way of earning a discount with an insurer has always been to give the insurer more business. So, if your family owns three vehicles, you insure all three with the same company. If you also insure your home, want to cover your health costs or insure your life, a bundle has always been rewarded with sometimes quite substantial savings. But, here comes the problem. While insuring vehicles has consistently remained profitable, homeowners insurance has become increasingly challenging. Even though the US is one of the countries refusing any action on climate change in the current round of talks in Durban, the US insurance industry has recognized a major change in weather patterns over the last twenty years. That’s why you will now find it very difficult to get flooding coverage if you live anywhere near where the water level is known to rise, why hurricane damage is being defined to make it more difficult for you to claim, and why sinkhole, mudslide and earthquake coverage is getting more difficult in the areas at risk, i.e. the land drying out or being affected by more than the usual amount of rain.
In the past, companies would cross-subsidize, treating their profit on vehicle insurance as support for the other divisions. That’s no longer an option. The premium rates have been forced to rise faster than inflation because of the increasing levels of fraud and the rising costs of repairs. There comes a point when the other insurance divisions of home, health and life have to become more profitable. Allstate’s answer is to make it a condition of buying homeowners insurance that owners also buy vehicle insurance. The regulator in North Carolina has just allowed Allstate to drop 45,000 existing policyholders who refused to transfer their vehicle insurance. The same is happening in Arkansas. In most states, it’s lawful for insurers to give just 30 days notice of its intention not to renew. So here’s the big question for you. How will you react if you get a letter from an insurer threatening not to renew your homeowners policy unless you bundle cover together? Will this trigger a rush to other insurers who offer unconditional auto insurance quotes? Ironically, it may force you to discover other companies actually have lower car insurance rates.
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