The Insurance Buyers Manual

Everything You Should Know Before Purchasing Insurance

 

It is always better to know what you are getting yourself into.

As a consumer, we sometimes forget our rights.

Our right to the best possible deal on insurance, good customer service, the works!

There is a lot to know about insurance and how we are assessed for it. Why are we charged a certain amount? Why are my premiums so high?

It’s almost like we need a manual for how to navigate getting our direct cheap insurance.

The best thing you can do for yourself and your family, is know the ins and outs of the insurance world and what it has to offer.

Do you qualify for discounts? How will your driving record affect your premium? Frequently asked questions, are frequently asked for a reason!

People want to know the basics on how to get the best deal!

Here are some facts about insurance as well as ways to save you money.

 

Car Insurance

 

The basic insurance for cars depends on what state you live in. Usually the minimum requirement for any state is attaining at least liability insurance. Sometimes you will also need property damage.

For example, in the state of California, your minimum amount of car insurance is this:

  • Bodily Injury Liability Limits: $30,000 per occurrence and $15,000 per person
  • Property Damage Liability Limits: $5,000 per occurrence

Now, if you don’t own your car outright and a bank holds the loan on it, you may also be required to have collision and comprehensive coverage.

What are the different types of car insurance I can have?

 

We all want to know what our options are. So here is a list of insurance types you could have:

  • Collision- this basically covers you and your own car if you are in an accident. You could also be reimbursed for the whole sum of your car if it is totaled.
  • Comprehensive coverage- this type of coverage covers theft and any other damages to your vehicle that are not sustained in an accident. If you live in a high-volume area and park your car on the street, this sort of coverage may be a good idea. You can also purchase more insurance that covers your valuables being stolen from inside your car.
  • Towing and Roadside Assistance- we have all been there- stranded and we need a tow. This insurance coverage can be helpful for everyone. You may be able to purchase 24- hour emergency services as well.
  • Uninsured Motorist Coverage- you may not believe it, but people drive around without car insurance. If you are hit by one of these people, you can still be covered if you have Uninsured Motorist coverage. Trust me, it happens more than you might think.

You may not realize all of the options available to you. Just ask a broker today on the ways you could save!

Motorcycle Insurance

 

Motorcycle insurance is (mostly) the same as car insurance.

Even though it is riskier to ride a motorcycle, the same amount of insurance is required as a car.

This means that you have to carry liability and property damage.

But there are also all of the other insurance options available to motorcycle riders and more.

You can buy extra medical payments coverage, funeral coverage and even cover your gear.

The motorcycle scene is full of long weekend runs and dive-hopping adventures, so you’ll want to make sure that your motorcycle insurance is up to snuff.

You can always bundle your car or motorcycle insurance with homeowners insurance or life insurance to save.

We will go over more on discounts later, but just know that motorcycles don’t have to cost an arm and a leg. Or, at least not to insure them.

 

What is SR22 Insurance?

 

Here is a term you may have not thought about in a while. Or maybe you don’t even know what Sr22 is.

This little document is filed by your insurance company and is often called a “financial responsibility form”.

These are for anyone who has had their license revoked. This usually is because of a DUI or DWI. That means Driving Under The Influence.

Yes, driving drunk.

And in the United States, that is taken very seriously.

Now, depending on what state you live in, you may not even need this form.

But in the majority of states, this form will help you to get your license back and your life back as well.

Here is a short break down of what SR22 insurance is:

  • SR22 is a form filed by your insurance company with the Department of Motor Vehicles, letting them know that you carry the required amount of insurance for that state.
  • The DMV requires you to carry this form for a minimum of three years to ensure that you are abiding by the laws and so that other people are protected.
  • You pay your insurance company a filing fee, and carry at least liability and property damage insurance for those three years.
  • This document cannot lapse and your insurance must be paid the whole time you have your SR22. If you do lapse on your insurance or the SR22 filing, your license will then again be taken away from you.

A DUI is serious business.

A DUI is when you are over the legal alcohol consumption limit and also drive a vehicle.

The state sees this as putting others in harms way. It is a serious violation and against the law.

A DUI can cost you thousands of dollars and even jail time. Statistically people between the ages of 21 and 25 are most likely to drive under the influence.

This is one reason why your car insurance may cost more until you hit the age of 25. You are at a higher risk of putting others in danger.

 

Tell Me About Discounts

We all want to get the best deal on insurance. Whether it’s car insurance, motorcycle insurance or SR22 insurance, you can save!

Having the direct cheap insurance the consumer wants is how insurance companies stay in business.

They have to keep up with the trends of society.

One of those trends just happens to be the Americans obsession with saving a buck.

 

Here area list of the possible ways you could be saving money on your insurance:

 

  • Bundling your insurance. When you bundle insurance with one company, they reward you with discounts. You could have your car insurance, renters insurance and RV insurance bundled. You could have your motorcycle insurance and homeowners insurance bundled. There are endless options, as long as your insurance company offers these insurance policies. Check with your broker on how you could bundle and save!
  • Raise your deductible to lower your premium. Now, this means that if you do get into an accident and you are at fault, your deductible will be higher. But for the month to month costs, you will be saving. You have to decide what is best for you.
  • If you pay for your insurance annually (once a year) or bi-annually (twice a year) as opposed to monthly, you could save. You could even save hundreds! It just depends, but monthly payments are where you will be paying the most.

More Discounts…

  • Take a drivers safety course. This applies to bikers as well. A defensive driving course could get you a huge discount. You are showing your insurance company that you are a safe driver and invested in being one.
  • You could save by belonging to an organization. Are you an alumni? Part of AAA?  Are you a veteran?  You could save. Tell your broker if these discounts apply to you.
  • Buy a car that is cheaper to insure. Ok, so here is the deal, every car has a different risk assigned to it. Driving a Camry will be more financially in your favor as opposed to driving a v12 Viper. I use this as an example because engine size says a lot to an insurance company. Have you ever seen those guys driving those fast convertibles, racing down a stretch of highway? I bet you don’t see that with a Prius too often. Insurance companies know this. And that is why your car could cost you more if you drive a bigger engine with a low safety rating.
  • Last but not least, where you live could affect your policy. Now, you aren’t going to necessarily get discounts for living on a quiet street in a safe neighborhood, but your rates will increase if you live in a crowded area with high theft.

Insurance is all about risk assessment!

 

Insurance is all about risk assessment. And the insurance companies have gotten good at it. If you want to save, make sure that you aren’t a risk factor.

Here are some examples:

  1. You are a 23 year old, owning a modified motorcycle with a high-powered engine while living in in Cleveland, Ohio. This is a higher risk for an insurance company because you are living in a crowded area, where your bike is most likely parked on the street. You have modified your bike to go faster than it should. Plus, motorcycles in general can be dangerous, not to mention you are young!
  2. You are a 35 year old married man living in a suburb of California, driving a Honda Accord. So this may seem pretty obvious to you, but being married is a good thing as far as insurance goes. You are less likely to take risks and more likely to come straight home at night rather than swing by a local club. You are over 25 and have been a decent driver for the past 20 years. Plus, not only is a Honda Accord one of the safest vehicles on the market, it has a V6 engine that won’t be racing the strip anytime soon.

 

Learning is Earning…

 

If you want to save more on your insurance, no matter what kind it is, you should be informed.

Knowing what your agent or broker is talking about is the first step.

It’s sort of like going to a foreign country, you want to know a little about the language so that you can navigate more clearly.

This is the same with insurance.

Here is some terminology you should know so that you can too speak the “insurance language”:

 

Actuary: Person who assess risk ratios for the insurance company. Now, these are the people who deal with statistics. Are you a good statistic? Or one that will cost the insurance company more money.

Broker: A person who compares and finds insurance policies for a consumer. They do not represent a particular insurance company but rather the consumer. This is the person working for you. You should ask them about discounts, how you can bundle your policies and if you are getting the best rate with the best company.

Bundling: Coverage that includes multiple policies such as home and auto which when combined can save the consumer premium costs. Not every insurance company does this. Not every insurance company provides every type of insurance you may need. Find one that does and bundle!

Certificate of Insurance: A written document that proves coverage is in force during a specific time period. This is basically what an SR22 form is. You need the form for three years and it will be enforced by the DMV.

Credit Risk: A person or entity which has a higher chance of default on policy premiums. Some insurance companies compare credit risk to overall responsibility of the driver and those with higher risk are generally charged higher premiums. This is just one other factor that an actuary will take under consideration when looking at your policies.

Driving Record: A detailed account of an individual’s driving violations. Keeping a good driving record is imperative when trying to receive discounts. It is also important after a DUI, when you are trying yo get your license back.

Terminology continued…

 

Driving Under the Influence: Driving a motor vehicle when you are under the effects of drugs or alcohol. Not only is this against the law, but coming back after a DUI takes time. Having SR22 insurance will help and is necessary.

Financial responsibility laws: Laws that make it illegal to not have the minimum state standards of insurance liability insurance. These are the laws in place to hold those accountable that want to carry insurance and drive after a DUI.

Lapse: A period of no coverage such as periods of non-payment or between policy effective dates. If you do carry SR22 insurance, make sure that it does not lapse. Or you will be starting the whole process over again.

Motorcycle Coverage: Coverage pertaining to registered motorcycles including liability, collision and comprehensive. Motorcycles include scooters as well. There are limitations to the modifications a motorcycle can have and still be covered with insurance.

Package Policy: A policy that offers discounts for multiple policies such as home and auto. Ask about this sort of policy and how it could save you money.

Premium: The cost of the policy that must be paid in order to be covered. Usually the higher your deductible, the lower your premium.

 

Remember that car insurance, motorcycle insurance and SR22 insurance are all types of insurances that you could save money on. You never know how much you could save until you ask!

 

Posted in Blog, Car Insurance, Insurance Tips, Motorcycle, Save Money, SR22 Insurance