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Questions About Auto Insurance and Accidents

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Comments

  • nitroclnitrocl Posts: 5
    Does anyone know when buying a new car in NJ if your name has to be on the insurance card or can you be part of someone elses policy? Do the dealers call the insurance company or do you just show your card? Will I have to get insurance in my own name (Which will cost me over $4800 a year!!!) What if i get financing outside the dealership? does how my car is insured matter to them still?
  • I have a 2003 Toyota Solara for just over a yaar now.

    When should I expect that the premiums charged for collision/comprehensive start to go down, since the value of the vehicle IS going down?

    I use Allstate. The auto was purchased 5/2003. My policy is semi-annual and so now (July 2004) I am receiving the renewal and the premiums are the same as the 1/2004 policy, which is the same as the 7/2003 policy.
  • KCRamKCRam Mt. Arlington NJPosts: 3,516
    Hi nitrocl

    Won't necessarily matter to the dealer, but it will definitely matter to the lender. Since the dealer acts on the lender's behalf, they will indeed call the insurance agent to verify that a valid polciy will cover the vehicle. If this is a situation where you are on your parents' policy, you should be ok as long as you are listed as a driver on that policy and the address matches your driver's license. I did that in NJ for years - my dad and I shared a policy for the multi-vehicle discount until I moved out.

    kcram
    Host
    Smart Shopper and Wagons Message Boards
  • nitroclnitrocl Posts: 5
    Then in the case that I get outside financing it should not matter to the dealer correct?
  • KCRamKCRam Mt. Arlington NJPosts: 3,516
    correct, but do check with the bank/credit union for their insurance requirements - it's their money and the car is collateral, so it's their rules of insurance coverage that you must abide.

    kcram
    Host
    Smart Shopper and Wagons Message Boards
  • tornado25tornado25 Posts: 279
    You should not expect the comp/collision rates to go down each year simply because the value of the car has decreased. I'll explain why.

    1) The value of a vehicle only comes into play in one claim scenario and only one: a total or potential total. For that reason, a vehicle's cost when purchased is only one of many, many factors used to calculate the premium. To carry that point a step further, it would make sense that any change in that vehicle's value would be a small factor in determining it's renewal premium.

    2) So, aside from total losses that might involve the value of the vehicle, the VAST majority of all claims are for damage that is less than a total. For that reason, things like body shop labor rates, parts costs, average damage amounts, etc have a much greater effect on the premium than anything else (aside from age). Those things do NOT go down just because the value of your car did. So, if your car is vandalized and not totalled or you're in an accident, but it's not totalled, the cost of the parts, the labor, the claim handling, etc all are the same (if not increasing each year).

    My point is, finally: The premium you pay represents your share of the risk presented to the company for that particular car. Things like theft rates in your area PLUS more importantly, the theft rate for your vehicle, the historical loss history for accidents where you live, honestly HUNDREDS, if not thousands of variables go into determining that premium and the value of the car is just ONE.
  • prophet2prophet2 Posts: 372
    In addition to tornado's explanation, the age of the vehicle plays a small role in calculating the premium charged. In my jurisdiction, current year models are placed in the highest premium group (1) for collision/comp rates. Cars then drop in the age classification for the next two years (2,3), followed by another drop (4,5), then the final rate class (6+).

    These changes occur on renewals dated on or after October each year. A 2003 vehicle would have been a "1" anytime prior to October 2003, then go the "2,3" class until October 2005.

    While a particular vehicle may "drop" in the age classification, the rates may have been raised for that age class, or the vehicle itself may have been re-classified higher (e.g. 12 to 14) due to the risk factors tornado has pointed out.
  • xiaozuzuxiaozuzu Posts: 7
    State Farm Fire and Casualty Co. mailed me a letter last week and told me they decide not to renew my Auto insurance plan which end in this August (08/27/2004)
    My insurance plan background :
    Driver : me ( 27 y/o ) my girlfriend ( 26 y/o) both of us are students
    Car: Chevy Lumina 1995
    Illinois
    State Farm fire and casualty Co
    Liability (car body, medical .towing , A, C, H U1 W)
    Starting from 01/2002 to 08/27/2004

    I had 2 accident:
    05/2002 accident (left turn collision , my fault, went to traffic school) 2 ticket were given at that time and later dropped because I took the class the Illinois Supervision ( non of the tickets were covicted and as long as you have no accident in the next 1 year, you have a clean record)

    04/ 2004 accident (hit a coming deer, damaged the very cheap iron wire -fence which separate the highway from the farm)

    Because my 10 years old chevy sometimes broke down ( Chicago cold weather) , I towed my car 3 times from 2002 to 2004 in additions to the 2 accident towing bill, which state farm reimbursed me. So State farm wrote to me and said that I had 5 claims.(@#$@#$!!!)

    Before my girlfriend and I decide to just use my car, her car were hit by an uninsured vehicle in 2002 and it is totally the other driver’s fault who got a ticket , because this driver is uninsured and can not pay back to my girlfriend, her license were revoked. Her cars were insured by state farm too, but state farm did not pay a penny to us because we only had liability.

    So state farm is dropping me because I had 2 accident ( the 2002 one and 2004 accident with a deer) and 5 claims( 3 towing and 2 accident I just mentioned)
    I am not sure about follwing questions:
    What will this dropping affect my driving history?
    Can other company see I am being dropped by statefarm and had 5 Claims.??
    Can I still get insurance from other good companies with a reasonable price??
    What is the difference between State farm mutual automobile Ins Co and state farm fire and casualty co ( the one I had policy with )??
    As statefarm said in the letter I can appeal this decision to Illinois State, Is it worth for me to hire a lawyer and appeal this??

    I was a bad driver and getting better and better each day, but I can not imagine that the recent unfortunate Deer accident can cause so much trouble, is this Deer accident considered unavoidable nature disaster?
    Thank you very much
  • prophet2prophet2 Posts: 372
    State Farm MUTUAL is for their standard and preferred risks. State Farm FIRE is their second-tier carrier with premiums 70-100% higher than standard, depending on the state you're in, even if you have a "clean" record (no tickets or at-fault claims). They also have State Farm GENERAL for DUI and "assigned risk" drivers. The rates are even higher.

    What was your driving record before you insured with State Farm? Was it the FIRE company rather than the MUTUAL company you were placed in?

    Being dropped is a function more dependent on the frequency and number of claims rather than the dollar amount of the claims. In other words, five at-fault claims totalling $6000 will get you booted, a single $10,000 claim will probably not.

    I'm a little surprised that the towing claims have been factored in. It may have been better to have joined AAA for their towing benefit rather than the insurance company.
  • xiaozuzuxiaozuzu Posts: 7
    i just get my learner's permit when i get my insurance from statefarm fire and casualty ( not the mutual), i did not recall and did not know there is such difference, it must been that it is risky to give my insurance so they only give me the fire and casualty company.

    just talk to my agent, she told me the fire and casualty is already the statefarm General ( highese risk level), so i can not get insurance from statefarm after all!

    Anyways, do you guys know whether other insurance campany will see my towing claims at all. or will they only see my accident record in DMV?

    thanks a lot
  • manamalmanamal Posts: 434
    There is something called a 'CLUE report'. If yu do a google search on 'CLUE insurance' you will learn more about it.

    Bottom line is it lists all of the insurance claims that you have made.

    Good Luck!
  • tornado25tornado25 Posts: 279
    Prophet, I can't really get into it too much here, so if you'd like to email me, that's cool; what I can tell you is unless there is a or a couple exception states out there, SF General does not do auto insurance. It's primarily a property insurance affiliate. Mutual takes preferred risks only--those with perfectly clean records or exceptional scores. All other eligible business is written in Fire. (All auto in NJ is written by SF Indemnity).

    As for the question at hand, my main thought, as was previously brought up is what caused you to be placed in Fire initially? If you had a violation or at fault loss when you started the policy and at the time of cancellation, if that incident was less than 5 years old, that may also be taken into consideration. It's not just the accident/ticket NOW.

    Re: the towing claims. The typical action there is simply removal of the coverage. The company would not cancel the policy for that alone, but it does give them a claim picture. My best guess is what really hurt you is your tenure with the company. In the 2 1/2 years with the company, you had 5 claims.

    As far as the deer hit. In terms of repairing your vehicle, if you had carried comprehensive, that would have paid for the damage to the vehicle and it's not chargeable. However, if the company had to pay to repair the fence, that's property damage liability and although I've never encountered this situation, I believe because of that payment, it would be considered chargeable. (Try not to think of it as "at fault" versus "not at fault" but rather how the company considers the payment in it's rating).

    The accident with your girlfriend's car has no affect or bearing on this situation.

    As far as appealing, what that means (likely--not 100% sure since I don't live in IL) is you can obtain coverage IL's pool plan. I highly doubt a true appeal of the cancellation is possible and if it is, it's likely to be unsuccessful. You definitely have one chargeable loss on your record and depending on the fence claim, maybe 2. It may take calls to few companies to find coverage.
  • prophet2prophet2 Posts: 372
    At least through fairly recent times (late '90s), Hawaii may have been one of the few jurisdictions in which State Farm wrote auto coverage through three different carriers. I met a GI who had applied for coverage through State Farm and the application had the three carriers listed. He had a clean traffic abstract and had been based here for three years.

    The car was being financed, but the State Farm agent did NOT write him up for full coverage and placed him in the FIRE company at $676 for six months for basic liability and no-fault medical. The MUTUAL company rate would have been $375. The lienholder would have slapped on a very costly physical damage policy (comp-coll) to protect their interest.

    We wrote him full coverge through Transamerica at $578 (basic at $405 was higher than State Farm Mutual's comparable rate).

    Back then, the GENERAL carrier was used strictly for DUI, assigned risk pool, and non-owned auto (driver-only) policies. There were drivers who sold their vehicles after their policies were cancelled, but were shocked to learn that unless they could prove financial responsibility by either posting a bond or getting insurance, they would have to surrender their drivers' licenses.

    As far as the GI went, shoving him into the FIRE company was probably State Farm's way of saying he was an "undesirable" risk. They were not the only ones as other carriers would prefer to not accept military non-coms, young drivers, etc. State Farm was one of the companies here cited and fined for using "illegal" criteria in their rate structure and risk assessment (occupation, age, gender, marital status). I myself got a call from the agency head that my book had too many military clients.

    All other companies have a second carrier in which to place sub-standard risks, but none went to the lengths State Farm did in this case. But, all of them required "clean" abstracts and claims histories to get into the prime carrier - all others were automatically placed into the second tier.

    Others whose policies I examined were found to have had a gap in coverage, which in these parts in almost as bad as a DUI. Non-continuous coverage is regarded as evidence of not being a responsible driver and the surcharge is enormous.

    I suspect that our friend may have been placed in the Fire company due to his youth (20's) as most states allow age as a rating criteria.
  • tornado25tornado25 Posts: 279
    I will defer on this point since:

    A) I don't live in HI, nor have I ever been there
    B) I don't know company guidelines for HI

    As for HI, I can be sure I will NEVER live there, since disallowing perfectly normal undewriting criteria from rating calculations means some people pay a higher rate than they should be. Just because the legislature thinks it sounds good to the voters.

    Ask an actuary once what happens when you can't use gender to rate a policy and you have a 20 year old guy and a 20 year girl to insure. It means the girl pays more than she would and the guy pays less. Gee, sounds fair to me. Guys are riskier but don't pay more. Whoo Hoo! Except not. (And for the record, I'm a guy. Single. Under 30. I'd benefit from moving to HI. I still think the law is dumb).
  • prophet2prophet2 Posts: 372
    They feel that applicants, regardless of age, gender, or marital status, should be rated the same if they both have the same driving and claims record and that increases should be based traffic violations and at-fault claims history. What is unfair is that drivers are penalized for PENDING tickets not yet adjudicated in court as if they have been convicted. I have never heard of an insurance company refunding surcharges on pending tickets after the driver was acquitted or the case thrown out.

    You mean you'd let a small thing like our auto insurance criteria deter you from living in our ALOHA state? Surely, you jest! You must really love the snow. For us, cool is 70 degrees, when the locals desert Waikiki Beach because it's getting too chilly! :>) :>)
  • steine13steine13 Posts: 2,714
    .... I understand where the insurance industry is coming from, but we're all individuals, and you can slice the pie many different ways. Gender just happens to be easy, and legal in some places.
    I'm pushing 40 (hard) and I've never had a claim against my insurance. In Germany, I'd pay just about *nothing* on car insurance...

    Here's how it works there, or at least used to.
    You get your license at age 18 (another topic). If you want to insure a car, you'll pay the nominal rate for that car, multiplied by 2.25. Drive claim-free for 6 months, and it drops to rate*1.75. Another year of no claims, 1.25. Another year, you pay the "normal rate". Every year after that, it keeps going lower.

    If you've had your license a couple of years before you get your car, it's 1.75 for starters.

    If you have a claim, things get REALLY expensive in a hurry.

    My old man pays std rate * 0.35, if memory serves. That is essentially free insurance, and a factor of six or seven less than a new driver. IOW, a discount of 85% or so. And even if he has an at-fault claim, he will be bumped up a few year's worth, and his insurance factor will still be low, like .45 or something.

    Notice I said "claims". Accidents you pay out of pocket do not influence your rates. Speeding tickets do not influence your rates. Points do not influence your rates. The only thing they care about is chargeable accidents. Great system.

    The downside is, the base rate for any car is determined by horsepower, even though it is widely acknowledged that there isn't much of a correlation. At least it keeps the young drivers out of the Camaros...

    I'm telling you all this just to throw out a different perspective.

    Long-windedly yours,
    -Mathias
  • xiaozuzuxiaozuzu Posts: 7
    thank you all very much.
    I am getting a lot of quotes and probably make a bunch of appointment with the Insurance agent.
    From now on, I will never never be bad driver!!!
    it really save your money in the isurance and prabobly save your life!!!
  • tornado25tornado25 Posts: 279
    "You mean you'd let a small thing like our auto insurance criteria deter you from living in our ALOHA state? Surely, you jest! You must really love the snow."

    Of course, I'm partially joking. I do love WI, though. We've got our own screwed up laws I'm sure people would hate--oh wait, we already hate 'em. The thing is, in my experience, when you see one law like that, it probably means there's a lot more like it out there.

    Plus, my daily meal at McDonald's is always subject to that "prices higher in HI and AK" or "not available in HI or AK". Finally, I think I'd lose the concept of vacation if I lived there--how can you "get away from it all" when you're already where you would have "getting to"? ;-)
  • janzjanz Posts: 129
    My agent recently told me that part of the discounts we are eligible for include one for a good credit rating.
  • prophet2prophet2 Posts: 372
    We've got a lot of screwed-up laws here. Don't believe the "experts" who say that our reputation as a "tax hell" is exaggerated - it isn't. The equivalent to a sales tax, the general excise tax, is pegged at 4% of all gross receipts for most activities (that includes 4% on the 4%, so car dealers charge up to 4.2%), which is lower than other states. But, we tax food and medical services, too.

    The latest proposal is to require licenses for recreational open-ocean fishermen. All beaches are public: beach-front property owners must provide public right-of-way access at selected locations. But, the city government charges an entrance fee at one particular beach.

    We already have a $25 permit fee to purchase 5000 fire-crackers for New Year's and Fourth of July celebrations. If the dealers run out of fireworks, the permit fee is non-refundable.
  • I wonder if anyone here can give me a clue on what to do about insurance when I buy my car, and before my actual coverage starts. I will only have coverage about 5 to 7 days after I submit the purchase order for the car to the insurance company (they tell me 5 days is average). In the meantime, not only do I not want to be without insurance, but I think legally I'm not allowed to be. I'm told I cannot park the car on the street in NJ without being insured. So it boils down to: I can't actually get insurance til I have a car and I'm not allowed to own the car without insurance. Heh. Catch-22 much?

    Someone told me I should be able to get temporary insurance from the dealership. Is this true? Can someone tell me what to expect in terms of price and is it negotiable?

    I don't need to drive the car during the waiting period, but I do want to be within the law with it.

    Tks.
  • xiaozuzuxiaozuzu Posts: 7
    I get a good price quote from 21st century ,
    but they don't have a local agent in Illinois,
    and i don't know about their financial strength..
    reliability..

    anyone has any clue?

    thanks
  • isellhondasisellhondas Issaquah WashingtonPosts: 20,225
    I probably pay a bit more than others but I like my State Farm agent. I'm a name and not a number.

    When I call them I hear " Oh, hi, Craig" I don't get a push button system that runs me through ten prompts before I'm finally conndected to someone I can barely understand.

    I don't worry they will be here today and gone tomorrow. Do I pay a bit more than one of these mass merchants? Perhaps, but for me, it's worth it.
  • akanglakangl Posts: 3,651
    Yup, we learned that the hard way. Left Allstate, went to AAA, they left the state, went to Gieco, then to AIG, we are back with Allstate, paying less than we've paid in years and we have a real human to go to if we have a problem. Its not a random whoever you get on the phone.
  • isellhondasisellhondas Issaquah WashingtonPosts: 20,225
    A lot of these cheapie insurance companies will drop you like a bad habit if you cause them any trouble, have a fender bender,get tickets etc.

    State Farm insures our three cars and our two houses and they have for many years. I would like to think this would mean something in case something bad should happen and our agent assures me that it does.

    When something is cheap, there is usually a reason!
  • akanglakangl Posts: 3,651
    Exactly!! When hubby had his little run in with the tree in February we were with AIG, took them a month to pay the body shop and for us to be able to get the truck back. (we thought we were going to have to pay out of pocket just to get the truck) Next renewal, they doubled our premium, I added it up, they would have gotten $6k extra over the next 3 years (had we stayed with them) for a $2k claim. We went back to Allstate, dropped our premium from $2k every 6 mos to $1200 for 6 mos.
  • tornado25atornado25a Posts: 33
    Because I've posted before in this and a couple of the other insurance boards, it's probably a good idea that I come clean. I work for a State Farm agent as a 4-line licensed staff person.

    People will get quotes elsewhere, saying "they are $130 less, why?" My initial (and correct response) is I don't know. They have a better loss ratio, they pay claims slower, they make you dial 1-800, push 1 then 6 then 8, leave a message. Any number of reasons. But the reason I've found that works the best is when they ask the question, I simply say: "This".

    When you dial a local number you get me or my boss. We both know who you are (for the most part, at least one of us KNOWS nearly everyone in our book), what you have insured with us, what you do, where you live, etc. I see our customers all over the place. It's cheesy, but when we say that paying a claim properly is "keeping the promise", we mean it and it's important to us.

    The company spends A LOT of money in making sure our technology is top notch and that our claims network is designed to pay claims quickly and easily.

    So, the question is: Do you want to pay $130 more and have your policy up on my screen before you can ask your question or do you want to pay $130 less and have no one ever know or care about your concern?

    It's like a grinder at a dealership. They'll grind you down to the last $50, screw the CSI and still complain they got screwed. Customers who incessantly complain about rates and shop every 6 months will still wonder why they have a bad taste in their mouth for insurance companies. I might not be with this job 10 years from now, but I know I'll still be insured with State Farm. Whatever the premium is, I know first hand that it's worth paying.
  • prophet2prophet2 Posts: 372
    The funny thing is that State Farm and Allstate have been the ones here that offered the lower premiums in both auto and homeowner insurance for decades. Like the example I quoted about the GI who was offered State Farm Fire instead of State Farm Mutual. The Mutual company rates were lower than what I could get him from Transamerica (TIG), but I was placing everyone with "clean" abstracts in the regular carrier, not the substandard one.

    I was also insured with State Farm for a number of years, particularly after the insurance law was changed in 1973.

    These days, a lot of people get their coverage through USAA, Hartford Underwriters via AARP, or sponsored groups (e.g. unions). I'm insured with GEICO, which does have local servicing, in-house adjustors and estimators, and "preferred" body repair shops. Since I have several decades of experience under my belt, I'm aware of what's going on and don't really need an agent's services.

    On occasion, I go on a local automotive talk radio program to speak about auto insurance. It isn't really surprising to learn how many people have no idea what their insurance does or doesn't cover. That doesn't even include the ones who are so clueless that they don't know what kind of questions to ask!

    BTW, do State Farm agents in your area have draft authority to settle claims on the spot? They did here for up to $1000.
  • isellhondasisellhondas Issaquah WashingtonPosts: 20,225
    O.K, I admit it.

    I like talking to a person who knows me than calling 1-800- INSURE ME and having to push 8 buttons before getting someone who MIGHT have a clue.

    An extra 130.00 a year? I'll pay that gladly!
  • tornado25tornado25 Posts: 279
    "BTW, do State Farm agents in your area have draft authority to settle claims on the spot? They did here for up to $1000."

    I have my own authority to pay to $1000. The agent can pay up to $5000. I think this is one of the best services we offer. Most of the claims we pay are emergency road service reimbursement, etc, but we a lot of large deer hits and claims like that. It seems even more personable to the client than getting handed off to a claim rep.

    "Since I have several decades of experience under my belt, I'm aware of what's going on and don't really need an agent's services."

    I agree. The one issue I would make is if you ever find yourself in a non-renewal/cancellation situation, the only person that will ever go to bat for you is your agent. With GEICO types, good luck appealing that. We've saved I don't how many people from non-renew/canc and they don't even know it. WE ourselves know whose battle is worth fighting and whose isn't. (I don't mean that we favor certain clients, but there are just certain situations where non-renew/canc is proper). It's the borderline calls that having an agent helps.

    isell, unfortunately, you're the exception. People like to talk the talk, but can't walk the walk. I can't tell you how many people have said "you guys are great, I really appreciate having an agent, etc, etc, but I can't pass up these savings". As much as I appreciate being TOLD that we are appreciated by our clients, switching in the face of that tells me that person DIDN'T really value what we provided. I can't do anything about THAT person, but I can still show our value to those who stay or come to us.
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