Auto Insurance Handbook And Guide: March 2009

Tuesday, March 31, 2009

Prevent a Suspension For Liability Insurance Lapses in New York

You can prevent the suspension of your registration and driver license if you surrender your vehicle plates to the DMV before your liability insurance lapses. You are not required to surrender your vehicle plates for a suspension of 90 days or shorter if you pay a civil penalty. You cannot use the civil penalty option if the lapse is longer than 90 days or you used this option in the past 3 years.

The civil penalty amounts shown below are the amounts for suspensions that take effect on or after October 1, 2005. The civil penalty amount is :

$8 per day for each day of the lapse from day 1 through day 30, and
$10 per day for each day of the lapse from day 31 through day 60, and
$12 per day for each day of the lapse from day 61 through day 90.

For example, if you had a lapse of insurance for 85 days, your civil penalty is calculated as follows :

$8 x 30 days ($240) for days 1 through 30 of the lapse, plus
$10 x 30 days ($300) for days 31 through 60 of the lapse, plus
$12 x 25 days ($300) for days 61 through 85 of the lapse for a total civil penalty of $840.

Note: Motorcycles are exempt from the requirement to surrender the vehicle plate when the liability insurance lapses, but liability coverage is required when the motorcycle is operated.

Monday, March 16, 2009

Buying Auto Insurance Policy Basic Guide

Buying an Auto Insurance Policy can be so very hard and confusing if you don't have any basic guide or clue. There are so many Auto Insurance Policy you can buy out there but still you need to consider many things if you decide to buy one of them.

Some basic tips for Buying Auto Insurance Policy :

Do not forget to look at your existing Auto Insurance Policy and try to relate it with your driving record.
If you have any previous Auto Insurance Policy, then you should cancel it.
Try to make a list of the Auto Insurance Coverage you need and think about the fund you have for those list of insurance coverage.
Do some little research for Auto Insurance Quote and make some list for the quotes you have then make a little comparison for them.
Always try to find some Auto Insurance Discounts as much as you can and make a list of them.
Try to spend some of your time for having the best Auto Insurance Quotes from various insurance companies. You can do it by phone or online.
Be sure of what kind of Auto Insurance Coverage you need and make sure if you need an extra protection or cover if there is an accident happen.
If you can't find the right Auto Insurance Policy you want then you should call directly to various insurance company agents.
Beware for the Cheap Auto Insurance Policy you find and if you decide to pick one of them then you have to make sure if the insurance company is reliable and can be trusted.
Read the right and obligation of Auto Insurance Policy you decide to have before you decide to sign the contract. Read it real carefully.

New York Auto Insurance Uninsured Or Under Insured Motorist

New York Auto Insurance Uninsured Or Under Insured Motorist Bodily Injury Coverage

Auto Insurance in New York for Uninsured or Under Insured Motorist Bodily Injury Coverage is mandatory. If the policy holder of New York Auto Insurance Uninsured Or Under Insured is injured in an accident made by a driver who has no insurance coverage or has insufficient insurance coverage, then this Uninsured or Uninsured Motorist Bodily Injury Coverage compensates for the injuries. The Coverage actually covers:

Medical Expenses
Lost Income
General Damages

The Optional Auto Insurance Coverage of New York are Medical Payments Coverage or Additional PIP Coverage while The Optional Liability Coverage in new York are :

Optional Basic economic of Auto Insurance Loss Coverage in New York.
Supplementary Uninsured/Under insured Motorist Bodily Injury Liability Coverage for New York Citizen.

New York Auto Insurance Personal Injury Protection Coverage

New York Auto Insurance Personal Injury Protection Coverage (PIP Coverage)

One of Mandatory Insurance Liability Coverage in New York known as Auto Insurance Personal Injury Protection Coverage is mandatory in New York. This insurance coverage compensates for the injuries caused to the policyholder himself and to the passengers of his car by an accident. This Personal Injury Protection Coverage covers :

Medical Expenses including Surgical treatment, Dental Treatment, Optometric Treatment, Ambulance Service, Medicine Supplies, Nursing Services
Loss of Income
Accidental Death Benefits in case of death by the car accident
Essential Service Expenses

This coverage includes not only the injuries of the New York Auto Insurance Personal Injury Protection Coverage policy holder but also the injuries of the authorized drivers listed on the auto insurance policy and the passengers of the insured car who are also the residents of New York. One can get the coverage benefits for the car accident regardless of whose fault it is, as the New York Auto Insurance Law enforces No-Fault Rule. When buying Auto Insurance for Personal Injury Liability Coverage, one has to decide on the level of deductibles. Deductible is the amount that the policy holder is required to pay from his own pocket before establishing an insurance claim in case of an accident.

Maximum payment under this New York Auto Insurance Personal Injury Protection Coverage is restricted to $50000 per person, per accident. But, one can receive larger amount of payments if he opts for one of the following optional coverages :

Additional PIP Coverage
Optional Basic Economic Loss Coverage
Work Loss Coverage

New York Auto Insurance Property Damage Liability Coverage

If in any car accident happen to a New York Citizen, who hold a policy of Auto Insurance Property Damage Liability Coverage. The Auto Insurance holder is responsible for the damages. If the property of other persons is also damaged then the New York Auto Insurance Property Damage Liability Coverage also pays for the damages. This coverage actually covers:

Damage to other person’s property
Legal Cost incurred due to the car accident

The coverage limit set under the New York Auto Insurance Policy determines the maximum amount to be paid per accident by the Auto Insurance Company.
According to New York Auto Insurance Law, every car owner in New York should buy property damage liability coverage of at least $10000. Policy holders are obviously free to go for higher limit for this coverage.

New York Auto Insurance Bodily Injury Liability Coverage

If one of the New York citizen hold the policy of Auto Insurance Bodily Injury Liability Coverage becomes involved in an accident which causes injuries and damages to third party, then this Auto Insurance Bodily Injury Liability Coverage pays for the injuries. This type of coverage compensates for:

Medical Expenses
Lost Income
Pain and suffering
Legal Costs if the third party files a lawsuit against the policyholder or any driver listed under the auto insurance policy.

The New York Auto Insurance Bodily Injury Liability Coverage policy holder is required to choose a coverage limit which will settle on the maximum amount to be paid per person, per incident by the New York Auto Insurance Company. According to New York Auto Insurance Law, every car owner and driver in New York is bound to buy bodily injury liability coverage of at least $25000 per person and of at least $50000 for all persons. But these are the minimum stipulated limits. Anybody can purchase bodily injury liability coverage of a higher amount to protect own self from huge financial loss in case of severe accidents.

Saturday, March 14, 2009

California Auto Insurance Companies

California Auto Insurance Companies are obligated to distribute policies with liability coverage of 15/30/5. A lot of drivers prefer to raise this coverage with the intention of protecting their residences and other possessions. The Internet can offer vast options when deciding what type of California Auto Insurance Coverage works best. California Auto Insurance Companies also tender optional coverage such as medical payments, collision, comprehensive, and protection against uninsured motorists. Despite the fact that these California Auto Insurance Quotes may not be a state prerequisite, they could represent the distinction between someone keeping their home or filing for bankruptcy.

It is a prudent thought to include medical payment of California Auto Insurance Coverage along with the car the policy, considering the fact that medical attention can cost thousands of dollars. With this approach, consumers won't have to be anxious about an accident victim filing a lawsuit for thousands of dollars that their insurance policy doesn't include. California Auto Insurance for Collision Coverage is a critical element to any insurance policy as it covers the damages done to the account holder's own car in the event of an accident. Without collision coverage, people will not be able to meet the expense of having their own car repaired.

On the other hand, Comprehensive California Auto Insurance Covers other inopportune auto incidents such as theft, natural disaster, and fire. Uninsured motorist coverage safeguards people in case their car should meet with an accident with somebody who does not have car insurance. This type of California Auto Insurance Coverage comes in handy when people need to repair their car after an accident that was not their fault.

Cheap California Auto Insurance

If you are a new driver or experienced driver in California, shopping around for Cheap California Auto Insurance is always a good idea. It's one of those monthly bills you will always have and the sooner you can find a Good Cheap California Auto Insurance Rate, the sooner you can start saving money for the more important things in life.

As you probably know, getting a Cheap California Auto Insurance is very hard for today. With the economy being as it is, it seems everyone, even Auto Insurance Rates are rising to make up for the credit crunch being felt by everyone. However, with some shopping around, you can easily find a good Auto Insurance Company that can offer good coverage at an affordable rate. Some of the better known California Auto Insurance Companies may not be the best bet all the time, as they are known to carry higher rates because of their size and names. Do some shopping around online and look for the best deals for California Auto Insurance Rate, you will find many California Auto Insurance Companies that you may not have heard of, but yet its sometimes those companies that offer the best rate for the coverage you desire.

California Auto Insurance Guide

California Auto Insurance System

California follows a Tort system of Auto Insurance System that means someone must be found to be at fault for causing the accident, and that person and his Auto Insurance Company are actually responsible for all of the damages. The details of a tort Auto Insurance System actually vary from state to state so check with your state insurance regulator for the specifics on your state. You can visit our State Auto Insurance Regulators page for a list of links to all the state insurance regulators websites. It is important to know that California state law requires minimum Auto Insurance System for Bodily Injury Liability coverage of $15,000 per injured person up to a total of $30,000 per accident and Property Damage Liability coverage with a minimum limit of $5,000. This type of California Auto Insurance Basic Coverage is frequently referred to as 15/30/5 coverage. Personal Injury Protection (PIP) in your California Auto Insurance Coverage helps pay for "reasonable and necessary" medical expenses for both you and your passengers. While California state law does not actually require a minimum Personal Injury Protection of Auto Insurance, some insurers will offer this as optional coverage.

In addition, you can also get Uninsured/Underinsured California Auto Insurance System Coverage for any bodily injury caused by an uninsured driver. You can purchase this as an optional California Auto Insurance Coverage for added protection even though California state law does not require this coverage. You should try hard to find you the best California Auto Insurance Rates in all of California even if your driving record is less than perfect or even if you are a high-risk driver. In light of all the statistics on auto theft and auto crashes, you will want to protect yourself and your property. In many states, you have the ability to get a California Auto Insurance Quote and even purchase a policy online.

Auto Insurance Usage Based

Conventional rating systems on Auto Insurance Usage Based are primarily based on past realized losses and the past record of other drivers with similar characteristics. More recently, electronic systems have been introduced whereby the actual driving performance of a given driver is monitored and communicated directly to the insurance company. The Auto Insurance Usage Based Company then assigns the driver to a risk class based on the monitored driving behavior. An individual, therefore, can be put into different risk classes from month to month depending upon how they drive. For example, a driver who drives long distance at high speed in one month might be placed into a high risk class for that month and pay a large premium Auto Insurance Usage Based. If the same driver drives for short distances at low speed the next month, however, then he or she might be placed into a lower risk class and charged a lower premium Auto Insurance Usage Based.

Norwich Union offered a type of telematic Auto Insurance Usage Based in the United Kingdom,discontinued in 2008, called Pay as You Drive. This system employed a combination global positioning system (GPS) and cell phone in a car to monitor driving performance and communicate risk factors to the insurance company. Drivers were offered a discount if they exhibited safe driving as Norwich defined it. Trials conducted by Norwich Union in 2005 found that young drivers (18 to 23 year olds) signing up for telematic Auto Insurance Usage Based had a 20% lower accident rate than average.

In the United States, Progressive Corporation has an Auto Insurance Usage Based program called MyRate. The program gives drivers a customized insurance rate based on how, how much, and when their car is driven. MyRate Auto Insurance Usage Based is currently available in Alabama, Kentucky, Louisiana, Michigan, Minnesota, Maryland, New Jersey and Oregon. Driving data is transmitted to the company using an on-board device. The device connects to a car's OnBoard Diagnostic (OBD-II) port (all automobiles built after 1996 have an OBD-II.) and transmits speed, time of day and number of miles the car is driven. There is no GPS in the MyRate device, so no location information is collected for Auto Insurance Usage Based. Cars that are driven less often, in less risky ways and at less risky times of day can receive large discounts. Progressive has received patents on its methods and systems of implementing Auto Insurance Usage Based and has licensed these methods and systems to other companies. Progressive has service marks pending on the terms Pay As You Drive and Pay How You Drive. Other Auto Insurance Usage Based Companies are offering telematic auto insurance products in Germany, South Africa, and Japan.

Thursday, March 12, 2009

Auto Insurance History From Time To Time

Conventional methods for determining costs of Auto Insurance or Motor Vehicle Insurance involve gathering relevant historical data from a personal interview with, or a written application completed by, the applicant for the Auto Insurance and by referencing the applicant's public motor vehicle driving record that is maintained by a governmental agency, such as a Bureau of Motor Vehicles. Such data results in a classification of the applicant to a broad actuarial class for which insurance rates are assigned based upon the empirical experience of the insurer. Many factors are deemed relevant to such classification for Auto Insurance in a particular actuarial class or risk level, such as age, sex, marital status, location of residence and driving record.

The current system of Auto Insurance creates groupings of vehicles and drivers (actuarial classes) based on the following types of classifications.

Auto Insurance for Vehicle Type : Age; manufacturer, model; and value.
Auto Insurance for The Driver : Age; sex; marital status; driving record (based on government reports), violations (citations); at fault accidents; and place of residence.
Auto Insurance Coverage : Types of losses covered, liability, uninsured or underinsured motorist, comprehensive, and collision; liability limits; and deductibles.

The classifications of Auto Insurance, such as age, are further broken into actuarial classes, such as 21 to 24 year olds, to develop a unique vehicle insurance cost based on the specific combination of attributes for a particular risk. For example, the following information would produce a unique vehicle insurance cost:

Auto Insurance for Vehicle : Age - 7 years old; manufacturer, model - Ford, Explorer XLT; value $ 18,000
Auto Insurance for The Driver: Age - 38 years old; gender - male; marital status - single; driving record (based on government reports) violations - 1 point (speeding); at fault accidents - 3 points (one at fault accident); place of residence 33619 (zip code)
Auto Insurance Coverage : Types of losses covered; liability - yes; uninsured or underinsured - no; motorist comprehensive - yes; collision - yes; liability limits - $100,000/$300,000/$50,000; deductibles - $500/$500.

A change to any of this Auto Insurance Information might result in a different premium being charged if the change resulted in a different actuarial class or risk level for that variable. For instance, a change in the drivers' age from 38 to 39 may not result in a different actuarial class because 38 and 39 year old people may be in the same actuarial class. However, a change in driver age from 38 to 45 may result in a different Premium Auto Insurance because the records of the insurer indicate a difference in risk associated with those ages and, therefore, the age difference results in a change in actuarial class or assigned risk level.

Current Auto Insurance Rating Systems also provide discounts and surcharges for some types of use of the vehicle, equipment on the vehicle and type of driver. Common surcharges and discounts include:

Auto Insurance Surcharges for Business use.
Auto Insurance Discounts : Safety equipment on the vehicle airbags, and antilock brakes; theft control devices passive systems (e.g. The Club), and alarm system; and driver type - good student, and safe driver (accident free); group - senior drivers fleet drivers .

Auto Insurance Risk Selection

Auto insurance risk selection is the process by which vehicle insurers determine whether or not to insure an individual and what insurance premium to charge. Depending on the jurisdiction, the insurance premium can be either mandated by the government or determined by the Auto Insurance Company in accordance to a framework of regulations set by the government. Often, the insurer will have more freedom to set the price on physical damage coverages than on mandatory liability of Auto Insurance Coverages.

When the Premium Auto Insurance is not mandated by the government, it is usually derived from the calculations of an actuary based on statistical data. The Premium Auto Insurance can vary depending on many factors that are believed to have an impact on the expected cost of future claims. Those factors can include the car characteristics, the Auto Insurance Coverage selected (deductible, limit, covered perils), the profile of the driver (age, gender, driving history) and the usage of the car (commute to work or not, predicted annual distance driven).

In many jurisdictions it is compulsory to have Auto Insurance before using or keeping a motor vehicle on public roads. Most jurisdictions relate insurance to both the car and the driver, however the degree of each varies greatly. A 1994 study of Auto Insurance and related factor by Jeremy Jackson and Roger Blackman showed, consistent with the risk homeostasis theory, that increased accident costs caused large and significant reductions in accident frequencies.

Wednesday, March 11, 2009

Auto Insurance In Ireland

The Road Traffic Act, 1933 requires all drivers of mechanically propelled vehicles in public places to have at least third-party Auto Insurance, or to have obtained exemption - generally by depositing a (large) sum of money with the High Court as a guarantee against claims. In 1933 this figure was set at £15,000. The Road Traffic Act, 1961 (which is currently in force) repealed the 1933 act but replaced these sections with functionally identical sections.

From 1968, those making deposits require the consent of the Minister for Transport to do so, with the sum specified by the Minister. Those not exempted from obtaining Auto Insurance must obtain a certificate of Auto Insurance from their insurance provider, and display a portion of this (an insurance disc) on their vehicles windscreen (if fitted). The certificate in full must be presented to a police station within ten days if requested by an officer. Proof of having insurance or an exemption must also be provided to pay for your motor tax.

Those injured or suffering property damage/loss due to uninsured drivers can claim against the Motor Insurance Bureau of Ireland's uninsured drivers fund, as can those injured (but not those suffering damage or loss) from hit and run offenses.

Auto Insurance In Australia

In South Australia, Third Party Personal Insurance or Auto Insurance from the Motor Accident Commission is included in the license registration fee for people over 16. A similar scheme applies in Western Australia. While In Victoria, Third Party Auto Insurance or Personal insurance from the Transport Accident Commission is similarly included, through a levy, in the vehicle registration fee.

In New South Wales, Compulsory Third Party Insurance (commonly known as CTP Insurance) is a mandatory requirement and each individual car must be insured or the vehicle will not be considered legal. Therefore, a motorist cannot drive the vehicle until it is insured. A 'Green Slip', another name CTP Insurance is commonly known by due to the color of the pages the form is printed on, must be obtained through one of the seven main insurers in New South Wales.

Auto Insurance In Canada

Several Canadian provinces (British Columbia, Saskatchewan, Manitoba and Quebec) provide a public auto insurance system while in the rest of the country insurance is provided privately. Basic auto insurance is mandatory throughout Canada with each province's government determining which benefits are included as minimum required auto insurance coverage and which benefits are options available for those seeking additional coverage. Accident benefits coverage is mandatory everywhere except for Newfoundland and Labrador. All provinces in Canada have some form of no-fault insurance available to accident victims.

The difference from province to province is the extent to which tort or no-fault is emphasized. Typically, coverage against loss of or damage to the driver's own vehicle is optional - one notable exception to this is in Saskatchewan, where SGI provides collision coverage (less than a $700 deductible, such as a collision damage waiver) as part of its basic insurance policy. In Saskatchewan, residents have the option to have their auto insurance through a tort system but less than 0.5% of the population have taken this option.

Auto Insurance Liability Coverage In United States

Liability coverage is offered for bodily injury (BI) or property damage (PD) for which the insured driver is deemed responsible. The amount of coverage provided (a fixed dollar amount) will vary from jurisdiction to jurisdiction. Whatever the minimum, the insured can usually increase the coverage (prior to a loss) for an additional charge. An example of Property Damage is where an insured driver (or 1st party) drives into a telephone pole and damages the pole, liability coverage pays for the damage to the pole. In this example, the drivers insured may also become liable for other expenses related to damaging the telephone pole, such as loss of service claims (by the telephone company), depending on the jurisdiction. An example of Bodily Injury is where an insured driver causes bodily harm to a third party and the insured driver is deemed responsible for the injuries. However, in some jurisdictions, the third party would first exhaust coverage for accident benefits through their own insurer (assuming they have one) and/or would have to meet a legal definition of severe impairment to have the right to claim (or sue) under the insured driver's (or 1st Party's) policy.

In some jurisdictions: Liability coverage is available either as a combined single limit policy, or as a split limit policy:

Combined single limit
A combined single limit combines property damage liability coverage and bodily injury coverage under one single combined limit. For example, an insured driver with a combine single liability limit strikes another vehicle and injures the driver and the passenger. Payments for the damages to the other driver's car, as well as payments for injury claims for the driver and passenger, would be paid out under this same coverage.

Split limits
A split limit liability coverage policy splits the coverages into property damage coverage and bodily injury coverage. In the example given above, payments for the other driver's vehicle would be paid out under property damage coverage, and payments for the injuries would be paid out under bodily injury coverage. Bodily injury liability coverage is also usually split as well into a maximum payment per person and a maximum payment per accident.

In the state of Oklahoma, you must carry at least state minimum liability limits of $25,000/50,000/25,000. If an insured driver hits a car full of people and is found by the insurance company to be liable, the insurance company will pay $25,000 of one persons medical bills but will not exceed 50,000 for other people injured in the accident. The insurance company will pay property damage not to exceed 25,000 in repairs to the vehicle that the insured hit. In the state of Indiana, the minimum liability limits are $25,000/$50,000/$10,000 so, there is a greater property damage exposure for only carrying the minimum limits.

Auto Insurance Coverage In United States

The consumer may be protected with different coverage types depending on what coverage the insured purchases. Some states require that motorists carry liability insurance coverage to ensure that its drivers can cover the cost of damages to people or property in the event of an automobile accident. Some states, such as Wisconsin, have more flexible “proof of financial responsibility” requirements. In the United States, liability insurance covers claims against the policy holder and generally, any other operator of the insured vehicles, provided they do not live at the same address as the policy holder, and are not specifically excluded on the policy. In the case of those living at the same address, they must specifically be covered on the policy. Thus it is necessary, for example, when a family member comes of driving age they must be added to the policy.

Liability insurance sometimes does not protect the policy holder if they operate any vehicles other than their own. When you drive a vehicle owned by another party, you are covered under that party’s policy. Non-owners policies may be offered that would cover an insured on any vehicle they drive. This coverage is available only to those who do not own their own vehicle and is sometimes required by the government for drivers who have previously been found at fault in an accident. Non-owners policies are also known as Named Operator Policies. The policies are useful for people whose drivers license has been suspended and they have to have insurance for their licensed to be reinstated.

Generally, liability coverage extends when you rent a car. Comprehensive policies ("full coverage") usually also apply to the rental vehicle, although this should be verified beforehand. Full coverage premiums are based on, among other factors, the value of the insured’s vehicle. This coverage, however, cannot apply to rental cars because the insurance company does not want to assume responsibility for a claim greater than the value of the insured’s vehicle, assuming that a rental car may be worth more than the insured’s vehicle. Most rental car companies offer insurance to cover damage to the rental vehicle. These policies may be unnecessary for many customers as credit card companies, such as Visa and MasterCard, now provide supplemental collision damage coverage to rental cars if the transaction is processed using one of their cards. These benefits are restrictive in terms of the types of vehicles covered.

Personal Insurance In United Kingdom

In 1930, the UK government introduced a law that required every person who used a vehicle on the road to have at least third party personal injury insurance. Today UK law is defined by The Road Traffic Act 1988, which was last modified in 1991. The act requires that motorists either be insured, have a security, or have made a specified deposit (£500,000 as of 1991) with the Accountant General of the Supreme Court, against their liability for injuries to others (including passengers) and for damage to other persons' property resulting from use of a vehicle on a public road or in other public places. The minimum level of insurance cover commonly available and which satisfies the requirement of the act is called third party only insurance. The level of cover provided by Third party only insurance is basic but does exceed the requirements of the act.

Road Traffic Act Only Insurance is not the same as Third Party Only Insurance and is not often sold. It provides the very minimum cover to satisfy the requirements of the act. For example Road Traffic Act Only Insurance has a limit of £250,000 for damage to third party property and does not cover emergency treatment fees. Third party insurance has a far greater limit for third party property damage and will cover emergency treatment fees. It is an offense to drive a car, or allow others to drive it, without at least third party insurance whilst on the public highway (or public place Section 143(1)(a) RTA 1988 as amended 1991); however, no such legislation applies on private land. Vehicles which are exempted by the act, from the requirement to be covered, include those owned by certain councils and local authorities, national park authorities, education authorities, police authorities, fire authorities, heath service bodies and security services.

The insurance certificate or cover note issued by the insurance company constitutes legal evidence that the vehicle specified on the document is insured. The law says that an authorised person, such as the police, may require a driver to produce an insurance certificate for inspection. If the driver cannot show the document immediately on request, then the driver will usually be issued a HORT/1 with seven days, as of midnight of the date of issue, to take a valid insurance certificate (and usually other driving documents as well) to a police station of the driver's choice. Failure to produce an insurance certificate is an offense. If a vehicle has been substantially modified, the modifications must be notified to the insurer, otherwise the policy becomes invalid. In the case of a police check finding that the modifications have not been notified to the insurance companies, the driver would be prosecuted for the disclosed offense.

Insurance is more expensive in Northern Ireland than in other parts of the UK. Most motorists in the UK are required to prominently display a vehicle license (tax disc) on their vehicle when it is kept or driven on public roads. This helps to ensure that most people have adequate insurance on their vehicles because an insurance certificate must be produced when a disc is purchased. The Motor Insurers Bureau compensates the victims of road accidents caused by uninsured and untraced motorists. It also operates the Motor Insurance Database, which contains details of every insured vehicle in the country.

Tuesday, March 10, 2009

Insurance Business Model

The business model can be reduced to a simple equation:
Profit = earned premium + investment income - incurred loss - underwriting expenses.

Insurers make money in two ways:
Through underwriting, the process by which insurers select the risks to insure and decide how much in premiums to charge for accepting those risks
By investing the premiums they collect from insured parties.

Difficult Aspect In Insurance Business
The most complicated aspect of the insurance business is the underwriting of policies. Using a wide assortment of data, insurers predict the likelihood that a claim will be made against their policies and price products accordingly. To this end, insurers use actuarial science to quantify the risks they are willing to assume and the premium they will charge to assume them. Data is analyzed to fairly accurately project the rate of future claims based on a given risk. Actuarial science uses statistics and probability to analyze the risks associated with the range of perils covered, and these scientific principles are used to determine an insurer's overall exposure. Upon termination of a given policy, the amount of premium collected and the investment gains thereon minus the amount paid out in claims is the insurer's underwriting profit on that policy. Of course, from the insurer's perspective, some policies are winners (i.e., the insurer pays out less in claims and expenses than it receives in premiums and investment income) and some are losers (i.e., the insurer pays out more in claims and expenses than it receives in premiums and investment income).

Insurer's Underwriting Performance
An insurer's underwriting performance is measured in its combined ratio. The loss ratio (incurred losses and loss-adjustment expenses divided by net earned premium) is added to the expense ratio (underwriting expenses divided by net premium written) to determine the company's combined ratio. The combined ratio is a reflection of the company's overall underwriting profitability. A combined ratio of less than 100 percent indicates underwriting profitability, while anything over 100 indicates an underwriting loss.

Insurance Companies Earning
Insurance companies also earn investment profits on “float”. “Float” or available reserve is the amount of money, at hand at any given moment, that an insurer has collected in insurance premiums but has not been paid out in claims. Insurers start investing insurance premiums as soon as they are collected and continue to earn interest on them until claims are paid out. The Association of British Insurers (gathering 400 insurance companies and 94% of UK insurance services) has almost 20% of the investments in the London Stock Exchange.
In the United States, the underwriting loss of property and casualty insurance companies was $142.3 billion in the five years ending 2003. But overall profit for the same period was $68.4 billion, as the result of float. Some insurance industry insiders, most notably Hank Greenberg, do not believe that it is forever possible to sustain a profit from float without an underwriting profit as well, but this opinion is not universally held. Naturally, the “float” method is difficult to carry out in an economically depressed period. Bear markets do cause insurers to shift away from investments and to toughen up their underwriting standards. So a poor economy generally means high insurance premiums. This tendency to swing between profitable and unprofitable periods over time is commonly known as the "underwriting" or insurance cycle.

Property And Casualty of The Insurers
Property and casualty insurers currently make the most money from their auto insurance line of business. Generally better statistics are available on auto losses and underwriting on this line of business has benefited greatly from advances in computing. Additionally, property losses in the United States, due to unpredictable natural catastrophes, have exacerbated this

Insurance - Term And Principles

Insurance Term

Insurance, in law and economics, is a form of risk management primarily used to hedge against the risk of a contingent loss. Insurance is defined as the equitable transfer of the risk of a loss, from one entity to another, in exchange for a premium, and can be thought of as a guaranteed small loss to prevent a large, possibly devastating loss. An insurer is a company selling the insurance; an insured is the person or entity buying the insurance. The insurance rate is a factor used to determine the amount to be charged for a certain amount of insurance coverage, called the premium. Risk management, the practice of appraising and controlling risk, has evolved as a discrete field of study and practice.

Insurance Principles
Commercially insurable risks typically share seven common characteristics.

A large number of homogeneous exposure units. The vast majority of insurance policies are provided for individual members of very large classes. Automobile insurance, for example, covered about 175 million automobiles in the United States in 2004. The existence of a large number of homogeneous exposure units allows insurers to benefit from the so-called “law of large numbers,” which in effect states that as the number of exposure units increases, the actual results are increasingly likely to become close to expected results. There are exceptions to this criterion. Lloyd's of London is famous for insuring the life or health of actors, actresses and sports figures. Satellite Launch insurance covers events that are infrequent. Large commercial property policies may insure exceptional properties for which there are no ‘homogeneous’ exposure units. Despite failing on this criterion, many exposures like these are generally considered to be insurable.
Definite Loss. The event that gives rise to the loss that is subject to the insured, at least in principle, take place at a known time, in a known place, and from a known cause. The classic example is death of an insured person on a life insurance policy. Fire, automobile accidents, and worker injuries may all easily meet this criterion. Other types of losses may only be definite in theory. Occupational disease, for instance, may involve prolonged exposure to injurious conditions where no specific time, place or cause is identifiable. Ideally, the time, place and cause of a loss should be clear enough that a reasonable person, with sufficient information, could objectively verify all three elements.
Accidental Loss. The event that constitutes the trigger of a claim should be fortuitous, or at least outside the control of the beneficiary of the insurance. The loss should be ‘pure,’ in the sense that it results from an event for which there is only the opportunity for cost. Events that contain speculative elements, such as ordinary business risks, are generally not considered insurable.
Large Loss. The size of the loss must be meaningful from the perspective of the insured. Insurance premiums need to cover both the expected cost of losses, plus the cost of issuing and administering the policy, adjusting losses, and supplying the capital needed to reasonably assure that the insurer will be able to pay claims. For small losses these latter costs may be several times the size of the expected cost of losses. There is little point in paying such costs unless the protection offered has real value to a buyer.
Affordable Premium. If the likelihood of an insured event is so high, or the cost of the event so large, that the resulting premium is large relative to the amount of protection offered, it is not likely that anyone will buy insurance, even if on offer. Further, as the accounting profession formally recognizes in financial accounting standards, the premium cannot be so large that there is not a reasonable chance of a significant loss to the insurer. If there is no such chance of loss, the transaction may have the form of insurance, but not the substance. (See the U.S. Financial Accounting Standards Board standard number 113)
Calculable Loss. There are two elements that must be at least estimable, if not formally calculable: the probability of loss, and the attendant cost. Probability of loss is generally an empirical exercise, while cost has more to do with the ability of a reasonable person in possession of a copy of the insurance policy and a proof of loss associated with a claim presented under that policy to make a reasonably definite and objective evaluation of the amount of the loss recoverable as a result of the claim.
Limited risk of catastrophically large losses. The essential risk is often aggregation. If the same event can cause losses to numerous policyholders of the same insurer, the ability of that insurer to issue policies becomes constrained, not by factors surrounding the individual characteristics of a given policyholder, but by the factors surrounding the sum of all policyholders so exposed. Typically, insurers prefer to limit their exposure to a loss from a single event to some small portion of their capital base, on the order of 5 percent. Where the loss can be aggregated, or an individual policy could produce exceptionally large claims, the capital constraint will restrict an insurer's appetite for additional policyholders. The classic example is earthquake insurance, where the ability of an underwriter to issue a new policy depends on the number and size of the policies that it has already underwritten. Wind insurance in hurricane zones, particularly along coast lines, is another example of this phenomenon. In extreme cases, the aggregation can affect the entire industry, since the combined capital of insurers and reinsurers can be small compared to the needs of potential policyholders in areas exposed to aggregation risk. In commercial fire insurance it is possible to find single properties whose total exposed value is well in excess of any individual insurer’s capital constraint. Such properties are generally shared among several insurers, or are insured by a single insurer who syndicates the risk into the reinsurance market.

Monday, March 9, 2009

Compare Auto Insurance Rates To Get The Best Deals

Compare Auto Insurance Rates To Get The Best Deals

Do you find that you don’t have as much money as you’d like left over after all of your bills each month? Don’t you wish you could shave some of your bills so that you could afford some of life’s luxuries? There are a few ways you can cut back. You can eat less, you can go out less, you can try to save on electricity by turning the lights off as much as possible and not running your heat/air as much, and you can also compare auto insurance rates so that you can get the best deal possible. Comparing atlanta auto insurance rates is very easy and you could end up saving hundreds of dollars every year just by going with the company that offers the best auto insurance rates around. That means more money in your pocket so that you can enjoy life instead of spending all of your income on bills.

Competition
Auto insurance rates differ from company to company. The good news is that there are so many companies out there that you are bound to find one that offers auto insurance rates at a lower price than what you’re paying now. You have some choices when it comes to comparing your auto insurance rates against the competition. You can either call around to the various companies, or you can go online. The internet has made it very easy to compare and contrast companies. You can, with a few clicks of a mouse, check auto insurance rates, see which companies have the highest auto insurance company ratings, and you can even check reviews from people who are satisfied, or dissatisfied, with the various companies around.

Switching
When you find a company that offers a lower auto insurance rate than what you’re paying, you should switch to that company. These companies specialize in switching you over from your current insurer to them and it’s often very seamless. You just tell them you want to switch and it’s done. Make sure, though, that if you find a company with lower rates, you’re getting the best coverage for your money. Everyone needs car insurance, but not everyone needs to pay out the nose for it. By checking around and doing a quick comparison of each company around, you can ensure that you’re paying the lower auto insurance rates possible. That should give you peace of mind as well as a little extra money in your pocket each month.

How to lease a new car?
Whether you lease a car to get into the latest models or have better purchasing flexibility, getting a good deal is always bound to give you a lift. Use these guidelines to help you spot one. Check incentives: be on the look-out for factory –subsidized lease deals. Car manufacturers realise that consumers who lease vehicles from them are more likely to be repeat customers than those who simply purchase vehicles. Find a good auto insurance orlando company to protect your car. Through their leasing companies, they adjust the residual value and offer low financing charge. Other auto-manufacturers are also starting to give incentives on leasing, called leasing subventions. They offer these subsidies to put slow-selling models on the street, saving you even more money.

Are Affordable Auto Insurance Rates Possible?
You have many options when it comes to san francisco car insurance. Auto insurance directors know that the industry is extremely competitive and will always offer affordable auto insurance rates, no matter what the coverage. That means that, in order to find affordable auto insurance rates, you need to shop around. You should make it a point to shop around for affordable auto insurance rates every few months so that you can ensure that you’re paying the absolute lowest rates possible. It doesn’t matter if you have liability or full coverage. You should be paying affordable auto insurance rates. If not, then you may just be throwing your money down the drain.

Esurance Auto Insurance Information

Prior to the idea of online auto insurance there was piles of paperwork was needed to be completed in the car insurance agent’s office. Then you have to wait for the insurance card. This along with multiple phone calls was a big hassle to get an auto insurance. Esurance is a hassle free auto insurance company. There is a simple online application which starts with your zip code. You have to then enter all the information about your car or cars, information about drivers and that’s it.

Esurance will then provide its quote and you have to then just give your payment information. Your auto insurance card will be displayed on the screen which you can print. You can manage your Esurance auto insurance policies online and also contact the customer service center 24 hours a day, 7 days a week. Currently Esurance is available in 30 states. It is available in Alabama, Arizona, California, Colorado, Connecticut, Florida, Georgia, Illinois, Indiana, Kentucky, Louisiana, Maryland, Michigan, Minnesota, Mississippi, Missouri, Nebraska, New Jersey, New York, Ohio, Oklahoma, Oregon, Pennsylvania, South Carolina, Tennessee, Texas, Utah, Virginia, Washington and Wisconsin. There are many happy customers who are satisfied with the Esurance auto insurance process from quote to claim.

Esurance is one of the fastest growing auto insurance companies in the US. Every insurance company must have a certain amount of money in the bank to pay potential claims. Esurance financial strength is rated “Excellent” by A.M. Best, an independent assessor of an insurance company’s ability to pay claims. Esurance is owned by White Mountains Insurance Group Ltd, a holding company with billions of dollars in assets. As a publicly traded company, White Mountains is subject to the laws and regulations governing financial disclosure and performance of public companies.

Auto Insurance Premium Comparisons

Auto Insurance Premium Comparisons - Why and How

What would $100 extra do to your family budget in these trying times? If you answered "A lot!" then listen up really good. Auto insurance premium comparisons are used by many people. Some use them rightly; most use them wrongly. I'll give you tips that will help you get the most from them - Savings of a few hundred dollars. But before then, I'll explain why you should NOT ignore them... Your rates are calculated based on several factors that are indicators of the amount of risk an insurer bears by insuring you. These factors include: Sex, age, location, driving history, credit rating, vehicle type, driving skill, profession and others.

However, the loophole is: there is NO standard for a particular profile across all insurers. The reason is NOT far-fetched. Insurers are in the business of managing risks. They want to help you protect stuff you cherish but they also want to turn some decent profit. And to do both effectively, they do check their claims history. One company might have specialized so well in offering services to a particular profile that they've learned to group them a lot better. This results in a lower claims ratio. Such a company would be able to offer cheaper rates for that particular profile. But since NOT all insurers can specialize in all segments of the market, they are somewhat restricted. But does that mean they'll NOT offer auto insurance to the entire market? Most do. Only a few specialize.

This means that although they all consider the same factors, but since the data against which each gives relevancy to each of the those factors differ, differences in rates are unavoidable. This is NOT a bad thing. In fact, it's a good thing if you know how to ride it (Which brings us to doing auto insurance rate comparisons well)... First and foremost, go to insurers who specialize in offering services to your particular profile. They have a better understanding and should favor you if you're a preferred driver. But if you know you've a worse status, you might actually be better off with an insurer who'll just lump you into a more general "group". How would one know which is which without spending weeks on end on this alone? Simple! Visit a good number of reputable insurance quotes sites. Get and compare rate quotes returned - That's the first step. Then, make sure you're provided adequate coverage for the estimate. Thereafter, check the rating of your insurer. If you do this well you'll cut down a hundred or several hundred dollars!

Here are great pages for auto insurance quotes...
InsureMe Auto Insurance Quotes
Auto Insurance Quotes
Chimezirim Odimba writes on insurance.

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Really Cheap Auto Insurance

Really Cheap Auto Insurance - More Ways to Get It

Everyone is looking for ways to cut down costs in these trying times. And, getting really cheap auto insurance is just one way to do it without getting onto the wrong side of the law. How many more ways can a person cut down his/her rate? Many! Let's share a few more. I'll start on a rather funny note : If you want to save big and pay far less (especially if you're under-twenty five), get married. Getting married will bring down your rate by a huge margin. Insurers have statistical data that show that people are less reckless and much more careful on the road when they get married. Insurers will tell you that their records show that married people make fewer claims. Furthermore, when they do make those claims, they usually cost less on the average than those married by their unmarried counterparts.

You will also enjoy discounts with some insurers for being part of an auto club. Even if this discount is negligible it's still something. Carpooling is another smart way to get auto insurance on the cheap. You should get a discount if you are a member of a car pool. The simple reason for this is that it reduces your mileage. Anything that brings down your mileage considerable reduces your auto insurance premium. If young drivers can get better rates by getting married, older drivers can also save much. Retirees are offered a special discount by a good number of insurance companies. This is especially true if such an elder is a safe driver. Furthermore, you'll hardly drive as much as you used to do once you are retired. This will effectively lower anybody's mileage. Don't forget that you qualify for this discount if you're retired. You can learn more about eligibility requirements from your agent. And, if your agent tell you they don't have this kind of discount, do your best to report the dramatic change in your mileage. Unless the change in your mileage isn't significant, you should shop for another insurer if you don't get a decent discount.

This next one is due to either ignorance or negligence... Avoid duplicate and/or unnecessary coverage. If, for example, you have an umbrella policy, you should only carry the minimum liablity limits required by law. Also check your health insurance and home insurance policies. You might be surprised what you've already got covered. And, sometimes coverage types that were necessary last year would no longer be relevant with your current position. So do check if you've overgrown some. This will cut down costs by a big margin. Last but by no means the least, get and compare quotes from a wide range of reputable insurers. It does happen that some folks are able to make savings of up to $1,000 dollars by doing this right. This is because their is a huge disparity in rates returned by different insurers. The reason for this huge disparity is the subject of one of my other articles. So, if you want really cheap auto insurance? You can start right away with the easiest - Getting and comparing quotes

Cheap Auto Insurance For Women

Cheap Auto Insurance For Women - Want to Save More? - Try These

Women generally pay less than men as far as auto insurance is concerned. But what if a lady wants to drive an already cheaper rate even further down? Here are things that will make that happen. You'll pay a lot more if you live in New York City than you would if you lived in some sparsely populated town. Rural areas get far cheaper rates because they are less exposed to risks of vandalism, theft, collision and others that are usually associated with urban areas.

But take note that the main issue here is the risk perception of insurers. If you take active steps to reduce that, you'll enjoy lower rates. For example, if your car has theft-deterrent gadgets you've lowered its risk of being stolen and that should bring down your rate. In the same vein, if you take a course in defensive driving, you'll reduce the likely of being involved in a collision and by extension, your rate. This is because you've learnt to anticipate situations better and responded more positively. You might be able to bring down your rate if you take time to review your policy from time to time. It's interesting to note that a lot of people still pay for things they needed yesterday but no longer need for today. A good example is a case where a couple leave their wedded daughter on their policy for months or even a few years just because they did not remember. Such mistakes are costing families quite a bit. In this tough times, every dollar is worth saving. Nothing in life stays the same. And this is particular true of your auto insurance policy. The changes in your life might have qualified you for certain discounts or made some coverage types totally unnecessary. Unnecessary coverage is unnecessary expense.

Review your policy at least once a year or twice yearly. Finding even one thing that you no longer need on your policy and dropping it will save you something reasonable. For no reason must you allow your auto insurance policy to lapse. You'll attract very expensive rates for a long time if you let this happen albeit by mistake. This happens to many folks while they are about changing over to another insurance company. To avoid this, make sure that the new policy is fully in in force before you terminate the old. Many people are paying more than they should just because they made this mistake. So do take care so you don't become one of them. Another time this happens to a lot of folks is when, for some reason, they do NOT need to use their cars for extended periods. Rather than cancel their policy, they just forget about it. Note that forgetting about it is equal to letting it lapse. This means that whenever you decide to drive again, your rates will go up since you have a lapsed policy on your record.

Still on the issue of forgetting things...

Do you know that you might be losing money if you have a car that you've not used for months? Do you have a car that you've just forgotten about because of the headaches it gives you or something? Have you removed it from your auto insurance policy? Funny as it may seem, this is one reason some folks pay higher rates than they should. Don't make this mistake. If you decide to pay your premiums monthly, you will attract higher rates. True, paying monthly might be a lot more convenient in these tought times but it's also much more expensive. There are transaction fees that are attached to processing a check. For 12 checks (that is, your monthly premiums) you will have a total of 12 transactions. This means that you'll pay transaction fees 12 times. Besides there are also administrative costs that come with the monthly payment option. A clear example of such is the cost associated with mailing payment notices. These and more are then added to your rate thereby making it more than if you paid yearly. Before I end this, I'll like to touch two more things... If you can change to a more auto insurance-friendly occupation. I know this sounds funny -- Who would change career just because of their auto insurance rate? But if you have a choice, do it. Certain professions get cheaper rates.

Scientists, for instance, get far more affordable rates than business owners. Members of some professions make use of their vehicles a lot more and, as a group, have traits that make them higher risks. If you want to find out where your occupation belongs and what to do, ask your agent. Just note that each insurance provider might have a slightly different position. Finally, you can get even cheaper auto insurance rates as a woman by getting and comparing quotes from a wide range of insurers. The difference in rate quotes can be very huge. In addition, some insurers specialize in, or cater only for, women. Apart from being favorable disposed to the female folk, they usually also have a lot of value-added services to sweeten the deal. Here are great pages for auto insurance quotes...

Auto Insurance Handbook And Guide