Nov 11
adminArticles Benjamin Franklin, Bundles Of Joy, Cause Of Death, Certainties, Childbirth, Collisions, Death And Taxes, Escape Velocity, Family Budget, Gone With The Wind, Inescapable Fact, Insurance Policy, Insurance Premiums, Jack Robinson, Margaret Mitchell, Own Insurance, Safety Record, Straight Roads, Teen Drivers, Traffic Accidents
There used to be only two certainties in life, at least according to Benjamin Franklin, namely death and taxes. Margaret Mitchell then added a third in Gone With the Wind, i.e. childbirth. Following birth, those adorable little bundles of joy start to grow and, before you can say, “Jack Robinson”, they’re teenagers and the fourth certainty hits you straight between the eyes. Every teen expects to drive. No matter how much you try to deny this reality, it’s unavoidable and the results will threaten your family budget. With the recession showing no sign of going away anytime soon, everyone is living with the threat of unemployment. If the pay checks stop coming in, keeping up the mortgage or rent is going to be a challenge. So, when you have any spare cash, you’re paying down your debts. The more flexibility you have on the credit cards or with the bank, the better. Except, there’s this inescapable fact. If you get quotes for adding your teen to your own insurance policy, your rates are going to take off like a rocket with escape velocity to reach the moon.
If you’re really lucky with where you live and have a perfect safety record, the rate might only go up by 50%. That means you live in the middle of a flat prairie with straight roads and only a few trees and fences to aim for. With little traffic on the roads, the chances of an accident are small. Nevertheless, teen drivers rapidly develop a flair for exploring off the side of roads or entering unofficial demolition derbies. Now think about those parents who live in cities and their ZIP code is not the best in the world. With such an address, you can find your premium rates going up by as much as 200%. Yes, this is unfair but it also reflects the hard reality that traffic accidents are the biggest cause of death among teens. No disease can match the lethal quality of collisions. Hundreds of thousands of our young are killed or injured every year and the insurance premiums reflect this. So what can you do to reduce the cost?
The best place to start is with a safety course approved by your current insurer. Except, this is going to be a battle. Teens tend to believe they have superpowers and cannot be injured in an accident. They will be hostile to the idea of a course when it has some twenty to thirty hours in a classroom plus time with an instructor. The longer the one-to-one time with an instruction, the higher the course fee. The most expensive are around $500. But, if your teen is certified as doing well on the course, you can expect a reasonable discount on the premium rate. So, let’s say your current premium is $1,500 a year and it will increase by 50% to $2,250 but you earn a discount of 15%, i.e. $337.50. Any course fee less than that pays for itself within the first year. This may not be cheap auto insurance, but it will hopefully help your teen drive more safely. When you get the auto insurance quotes, check out which courses are approved and what discounts are available.
Mar 13
adminArticles Accident Victims, Accidents, Actuaries, City Streets, Female Drivers, Ford Contour, Gender Equality, Insurance Industry, Last Detail, Local Newspapers, Many Men, New Moon, Pack Rats, Police Report, Premium Rate, Premiums, Red Ford, Safety Record, Sincerity, Statistical Evidence
Whenever you ask a talking head paid by the insurance industry, “How do you calculate the premium rate?” the answer is always the same. There’s a big smile of sincerity and that reassuring voice says, “We look at the driver. It’s all about who you are and what you drive.” And that, of course, is how it should be. Actuaries are paid to estimate the risk of accidents and, as they keep telling us, the statistics never lie. These actuaries are like pack rats. They collect every last detail of every accident that gets reported. It doesn’t matter whether it’s a police report, a claim to the insurers from a hospital for treating accident victims, or reports in local newspapers. They have information about accidents going back to the time we were switching over from real horses to horse-powered engines. So ask how many men aged 33 have had an accident at 2 a.m. while driving a red Ford Contour in the rain with a new moon and, with the click of a mouse, you will have the answer by return. It’s the detail that’s so impressive. More importantly it shows exactly how many claims are made by male as opposed to female drivers, and what the average value of the claims is.
All around the world, the statistical evidence shows women making fewer claims and, when they are involved in accidents, the amount claimed tends to be lower.
The reason for this is that, in general, women drive within the law. They do not try to beat the lights or drive too fast on city streets so, if there is an accident, they are traveling more slowly and the impact is less damaging both to the vehicles and the people inside. Not surprisingly, this excellent safety record has been rewarded by lower premiums. Where the risk is lower, drivers pay less. Except, in Europe, this will change next year.
The European Court for Human Rights has just ruled that men and women must pay the same premiums. At the end of 2012, there must be a new system in place to calculate premiums without relying on gender as a key factor. So what’s going on? Well, ask yourself, is it fair to charge someone more to insure their vehicle just because they are male. No one asks to be born male or female so why penalize all those who have the bad luck to be born male? Keeping this real, men don’t crash because their sexual apparatus gets caught in the steering wheel. People get into accidents because they drive badly. There’s no point in forcing people to pay more because of something they are powerless to control. There’s every reason to base auto insurance quotes on actual driving records because, if the record is bad and the premium rate is high, it gives those drivers an incentive to improve their driving. Calculating premiums should be very personal, looking at how well each individual drives. Grouping everyone together on the basis of their gender for issuing auto insurance quotes is arbitrary and unfair (at least, in Europe).
Apr 22
adminArticles Accelerator, Acura Mdx, Air Bags, Apparent Failure, Driver Error, Electrical Problems, Emergency Services, Ford Focus, Headlights, Importers, Insurance Premium, Insurance Providers, Last Ten Years, Mdx, Passenger Safety, Paying Attention, Plague, Protectionism, Safety Record, Sudden Acceleration
There have been hundreds of newpapers headlines over the apparent failure of Toyota to deal with what is called sudden acceleration syndrome. This is where you are just sitting in your vehicle with the engine running or driving it on the road and, without warning, it suddenly accelerates. If you believe the stories, we have had people unable to stop on the highways even with helpful emergency services telling the drivers to switch off the engine.
It seems some drivers are really determined to experience uncontrolled acceleration, and their experiences may make it more likely driver error is one of the main causes of the syndrome. Indeed, if you listen to the manufacturers, they all sing the same tune. With the accelerator and brake being next to each other, it’s easy for the driver to make a mistake and press the wrong pedal. In reality, the syndrome has affected almost every make of vehicle on the road over the last ten years. It was because of the scale of the problem that manufacturers introduced the shift interlock system which makes it impossible to engage drive unless you have your foot on the brake.
Let’s put Toyota’s problems in context. Every major manufacturer has had recalls with problems affecting driver and passenger safety. The air bags in the Acura MDX were defective, and a plague of electrical problems affected the headlights in the Ford Focus. One of the reasons why Toyota has attracted more attention than the others this year is a type of protectionism. You attack the safety record of foreign importers to boost the sales of locally produced vehicles. Taking the statistics overall, Toyota actually has a better safety record than most other manufacturers, i.e. fewer people are injured per mile driven. With virtually every make and model recalled, the manufacturers show they are paying attention. Your safety is important to them. But what happens to your insurance premium if your vehicle is recalled?
Insurance providers find any possible excuse to raise their premiums but it’s very unusual for rates to rise following a recall. That would be penalizing you for the manufacturer’s design defects, and most states have regulations in place to prevent increases solely based on a recall. If you think you have been victimized in this way, report the facts to your local Department of Insurance. Should you prefer to change insurers, make sure you follow the terms and conditions for cancelling the policy. Many companies impose penalties for early cancellation.
One word of warning – do not ignore a recall notice. Auto insurance companies like to find reasons to avoid paying out on claims. If you do not have your vehicle repaired and the defect causes an accident, that will be your fault and your claim will be reduced or refused. Even if there is no accident, the insurer can impose a surcharge or refuse to renew the insurance. It would be good if auto insurance companies always showed themselves in the best possible light. Unfortunately, the drive to make the maximum profit often makes them seem vicious and cold-hearted. There is no compassion in business. So always approach insurance like every other service. Shop around to find the best make and model of vehicle – one that does well in crash tests and is not popular with thieves. Then get auto insurance quotes from as many companies as possible and find the best deal. Rest assured. Recalls are the least of your problems and do not affect the premium rate over the short term.
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