Monthly Archives: August 2018

Car Insurance Costs Are Cut, But It’s Not Good News for Everyone

The seemingly never-ending rise in car insurance prices could be coming to a screeching stop thanks to proposed government changes.

New proposals will see a huge U-turn on the rate at which payouts for victims of serious accidents is calculated which is known as the Ogden rate.

The Ogden rate is set to be changed as soon as next year in a bid to provide a “fairer” system.

How does the Ogden rate work?
Set by the government, the Ogden rate is the amount awarded to victims with life-changing injuries after an accident.

The rate had been set at 2.5{ae1fd4ba451db0ddabbeda8743f29f926207e85905a47ad2948a853b655163fa} which meant that for every £1,000 awarded to a victim in a claim, the insurer would pay out £975 – with the other 2.5{ae1fd4ba451db0ddabbeda8743f29f926207e85905a47ad2948a853b655163fa} or the Ogden rate expected to be earned by the claimant through investment interest. This would then give them the full pay out they were due.

In March 2017, the rate was cut to -0.75{ae1fd4ba451db0ddabbeda8743f29f926207e85905a47ad2948a853b655163fa} or in a monetary sense, insurers would now have to pay victims £1,007.50 per £1,000 payment.

It was this increase in pay outs that helped cause car insurance prices to hit record highs* in the last 12 months.

What’s the latest Ogden rate change?
While a specific date hasn’t been announced, the Ministry of Justice have confirmed that they are revising the rules and it’s expected that the Ogden rate will be put at 1{ae1fd4ba451db0ddabbeda8743f29f926207e85905a47ad2948a853b655163fa} from next year.

The changes have been welcomed by insurers as it will reduce the amount they are forced to pay.

Huw Evans of the Association of British Insurers commented on the proposed changes:
“This is a welcome reform proposal to deliver a personal injury discount rate that is fairer for claimants, customers and taxpayers alike.”

“If implemented it will help relieve some of the cost pressures on motor and liability insurance in a way that can only benefit customers.”

What do these changes mean for drivers?
The last time rates changed it meant an increase in car insurance premiums as insurers passed on the extra costs to drivers.

Now with pay-outs to victims expect to drop, it only makes sense that the savings will be passed on to drivers by reducing the overall cost of their cover.

Changes are not expected to come into effect until next year so it may be some time before these savings can actually be seen on the price of annual insurance.

How will it affect accident victims?
While it’s potentially good news drivers, victims of serious accidents who are left with life changing injuries could be short changed.

Instead of receiving the full amount of the awarded pay-out, victims will now once again be expected to invest their money for profit.

While the assumption is that these people will be able to make up the difference comfortably, many have commentated on the unfairness of the new rate.

Speaking to The Mirror, President of the Association of Personal Injury Lawyers, Brett Dixon said:

“Someone with a life-long, life-changing injury such as brain damage or a spinal injury cannot afford to take any risks with how his compensation is invested,”

“The last thing people with devastating injuries think about when they are lying in a hospital is their insurance premiums. They think about how they are going to manage. Insurers say an increased discount rate will benefit customers through their premiums. It is of no benefit if they are severely injured and forced to take risks with the compensation they so desperately need.”

4 ways to reduce the cost of your car insurance
While you wait for rate changes to bring the cost of you cover down, there are a number of ways you can save yourself money right now.

Reduce your risk
While there are some details you can’t change, there are a few things you can do to reduce the risk you pose. Something as simple as changing your job title from an office manager to an office administrator could save you money.

You also need to consider the vehicle you’re driving. When choosing a car, you should try and get one that’s safer, slower and less eye-catching.

Increase your excess
Increasing the amount you’re willing to pay if you have an accident will reduce the price of your premium. This is a great way to reduce the overall cost but remember you should never agree to an excess that you can’t afford to pay.

Make sure your car is secure
Whether it’s adding an immobiliser to your car or locking it away in a garage overnight, increasing your vehicles security will make it less attractive to thieves and cut the cost of your cover.

Make sure you let your insurer know about your improved security as some providers will offer discounts even before you renew.

Only pay for the cover you need
If you’re only borrowing a car or just need to drive for a few days, an annual insurance policy could be a huge waste of money.

A temporary policy offers the same level of cover and financial protection as yearly insurance at a fraction of the price.

You get the cover you want without having to pay for insurance you don’t need. You can get a range of quotes in minutes and compare prices to save time and money.

Things to Consider Before Buying Car Insurance

You just have bought this car of your dreams by putting so much of earnings, time and energy on it and thinking through all the options available to you in your range. Surely it’s going to be one of your priced possessions but what is the next thing you are going to do? Of course take your family on a ride. And after that? Car insurance. It is the foremost thing you should do after buying a car. It not only protects your vehicle from damage but provides a huge support in emergency. With myriad insurance schemes on the road it is quite obvious for you to get confused. Here, these are the things you should consider before choosing one

1. Settlement of claim:

Often it is seen that companies fail to claim a good settlement. Don’t go on their words or assurances but research and choose a company with good history of claim settlement. You of course do not want hassles in any emergency.

2. Coverage:

Ask the provider of the coverage options available and how soon can it be issued. Generally, most of the companies take time in issuing coverage. However, it is our foremost need before deciding on any insurance policy.

3. Premiums:

Premium options vary from company to company. You can make this easy by reviewing the quotations of the companies you are interested in. Research thoroughly and choose the one that fits for you.

4. Customer Support:

A good 24*7 customer support should be available in case of any emergency. You can ask people around you about their experiences with the company and their conduct in managing situations with customers.

5. Cashless Option:

One cannot carry huge amount of money all the time. With advent of modernisation in our country, the need for cashless system is mandatory. It will provide you a relief in urgency.

6. Garages:

With quotations of premium, you can also ask for the list of network garages of the company. It is excellent to consider of they have ample amount of garages and especially nearby you. Ask people about their conditions, get feedback and decide.

We do not want any kind of damage to our vehicle but most of the times we become wee bit ignorant in choosing a good insurance company. Do not get trapped by choosing the company the car provider recommends but research on your own. Spend ample amount of time by thinking through all the options and then choose a best one.

How to Save on Insurance Costs When Buying a New Car

When you are buying a new car, you want to find ways to save on car insurance. There are many ways you can save on the cost of your insurance when you purchase a new car.

Check the Car Rating

Insurers charge more for cars that have high claims rates regardless of owner driving record. Some charge you less for collision and comprehensive coverage if your car scores well for durability and safety. Check the statistics on the new car you want before you buy.

Raise Your Deductible

If you can afford it, consider raising your deductible. The idea is that you can be prepared to pay for the damages yourself, so the insurance company does not have to in the event of an accident. They like this. So, if you can do it and transfer the risk to yourself, then you might be able to reduce your premiums up to 40{ae1fd4ba451db0ddabbeda8743f29f926207e85905a47ad2948a853b655163fa}. Then you can take part of those savings and put them into an emergency fund, still coming out on top.

Reduce Old Car Coverage

If you have an old car that you are replacing with the new car, you should reduce the amount of collision coverage you have. The reason for this is that insurance companies will not pay more to fix a car than the car is worth.

So, if you have an older car and the damages are $12,000 but the blue book value of your older car is only $10,000, they will not repair the car and will instead just likely give you the $10,000.

Cars more than five years old, depending on their value, but not be worth the collision and comprehensive insurance coverage. Remember that every year of depreciation diminishes the maximum claim that you are able to make with collision coverage.

Use the Same Company

If you have a car already and you are getting ready to buy a new car, be sure to use the same company to get your policy. Insurance companies will give you discounts if you put more than one car on the same policy. Often you can get upwards of 15{ae1fd4ba451db0ddabbeda8743f29f926207e85905a47ad2948a853b655163fa} off the policy for doing this. The same is true if you combine your auto insurance with your home insurance.

Avoid Installments

If you can avoid it, do not pay in monthly or quarterly installments. If you can afford it, pay your premium in a lump sum instead. Insurance companies tend to charge extra fees if you pay premiums in monthly or quarterly installments.

Better Credit Score

Insurance costs are tied strongly to your credit history and insurance claims. In many states, your credit score directly impacts the rates you are given. You should review your credit score in-depth to make sure everything is accurate and there are no errors.

If you have bad credit, work hard to systematically bring it back up as you pay bills on time, repair debt, etc… Then go back each time the score improves to ask about lower rates from your insurance company.

Top Ways to Save on Auto Insurance

When you get a car, you need to have auto insurance. It is important to get coverage that is comprehensive, but also inexpensive. While most people care a great deal about getting a good price when they first set out to get car insurance, they often fail to continue searching thereafter. Not continually looking for good deals can cost you hundreds each year.

Many people are unaware that the cost of your auto insurance can be lowered to help you save, depending on your driving record, your car, and where you are.

Increase Your Deductible

If you insurance the amount you pay for a deductible, it will reduce the cost of insurance fees. Now understand that this move is certainly one way to save on the costs month to month, but if you end up in a car accident, then yes it can end up costing you more to fix the damages.

However, if you have a history of being a safe driver, try it out and set some money aside for an emergency fund to cover unexpected car costs.

Try Carpooling

There are some insurance companies which actually track mileage, so the less you drive, the cheaper your coverage. With these policy types, if you drive less than 7,500 miles you get the lowest rate, and anything up to 13,000 is the medium rate.

Change Plans to What You Need

It is better for you to change plans to what you need, when you need them. Buying a brand new car is going to require different insurance compared to an older car. When you are paying off your car loan you will need collision and comprehensive coverage, but once it is paid off you have many more insurance options at your disposal.

You might end up with more collision insurance than you need. In fact, on older cars it is recommended that you drop collision insurance anyway because comprehensive coverage is comparable inexpensive and will give you all the coverage you need.

Combine Policies

If you have car insurance and renters/homeowners insurance through different companies, you might be able to combine your policy with one company and stack discounts.

Check for Discounts

If you have changed jobs, moved somewhere new, or anything else, keep track of your policy options. You might be able to get a cheaper policy in a new town or with a new job.

Check Your Credit

Your credit score has a small role to play in what your insurance costs are. So pay your bills on time and make sure you work hard to improve your credit score. As you are doing so, continually check to see if you now qualify for lower rates.

Other Discounts

As a student, good grades can earn you discounts. As an adult, see if you can take an adult driver safety program from better discounts. Consider avoiding a red colored car, as these come with higher insurance rates for users compared to other colors.

7 Scenarios Wherein a Car Insurance Claim Might Get Rejected

Car insurance is a mandatory investment as the law. Therefore, a large number of car owners opt to pay a premium for a car insurance policy to safeguard their cars against a possible collision. However despite this, a majority of their claims are rejected by companies. This is because people are unaware or rather ignorant to the intricacies related to car insurance. Therefore, a major chunk of car insurance claims are rejected. To stop this from happening, let’s go through a list of reasons where a car insurance claim might get rejected:

1. Intimating your insurer late or not at all: Please be informed that your claim is destined to be rejected if you fail to inform your insurance provider in the stipulated timeframe. On an average, you should update your insurance company within 48 to 72 hours from the time of accident or collision.

2. Driving under the influence of alcohol or any other drug: This one is a no-brainer but still most people are negligent about it. If you are driving when you have consumed alcohol not only are you breaking the law, but even your insurance company will refuse to cover in case of an accident.

3. If your car is being used for commercial purposes: If you have a private car and it is being used for any commercial use such as being used to carry goods or passengers than your car insurance provider can reject your claim. This is because there are different policies for Private car and commercial vehicle policies.

4. If you drive without a valid license: In case you or anyone driving your car is driving valid license and face an accident then your coverage becomes null and void. Therefore, ensure you renew your license on time.

5. Starting the repairs before inspection by insurer: When you intimate your insurer about the collision or accident, a surveyor will visit you to inspect the condition of the car and authenticate your claim. Without this inspection, the insurance company will be unable to trace the degree of the repairs and estimate the cost involved. Therefore, your claim is bound to be rejected.

6. Failing to transfer the policy from the previous owner: There is going to be some verification during the claim process. In case, the car insurance policy is not in your name then your insurer has the right to refuse your claim.

7. An Electrical or Mechanical Breakdown: In case your car is damaged without any external collision due to some electrical or mechanical breakdown then you are not covered by your car insurance policy. In this case, you will have to shell out some money from your own pocket.

Guide on Getting the Best Car Insurance Rate

Getting the best car insurance rate can seem exhausting. This is made even more difficult when you consider that lots of insurance agents are reticent to volunteer information on the discounts and deductibles they have available.

Getting the best car insurance rate, therefore, means arming yourself with the facts.

1) Compare Premiums

The first thing you want to do is compare premiums. The rates in your area might be different from one place to another or one agency to another. Sure, they might not be substantially different, but even a percentage point or two can help to save quite a bit of money for longer term.

Visit different insurance company websites and compare the rates you are offered. In state insurance offices they typically have pricing guides but the categories used by the companies you are considering might not match yours so use a guide yourself to figure out the most cost-effective insurance agents in your area.

2) Family

If you have teens in your family, anyone under 25 to be exact, manage them carefully. Young drivers tend to pay more because they are accident prone. Once they reach 25, statistically this decreases.

That said, if you have kids, encourage them to keep their grades high, at a B average or more, so that they get discounts on car insurance. Students can get between 5{ae1fd4ba451db0ddabbeda8743f29f926207e85905a47ad2948a853b655163fa} and 25{ae1fd4ba451db0ddabbeda8743f29f926207e85905a47ad2948a853b655163fa} saved. Moreover, if they complete approved drivers education courses it can get them a large discount.

Parents of students who spend part of each year at a school which is more than 100 miles from home, and need the family car to do so, might get a break on the costs too.

3) Careful Driving

Kids are not the only ones who need to be careful drivers on the road. Many insurance companies give a discount of 5{ae1fd4ba451db0ddabbeda8743f29f926207e85905a47ad2948a853b655163fa} for anyone who keeps a clean record for three years in a row, and 10{ae1fd4ba451db0ddabbeda8743f29f926207e85905a47ad2948a853b655163fa} for those who go six years without an accident or violation.

You might even get discounts, depending on where it is you live, if you are a female and the only driver in the family, a non-smoker, a senior, or a member of specific profession which is statistically less prone to accidents (usually law or medicine).

Other discounts can be had from taking defensive driving courses, carpooling, or maintaining low miles on your car. If you participate in a data-tracking program, where the insurance companies get to monitor your driving habits, then you can often get a discount for that too.

These rates all vary based on where you are and what company you use. Moreover, you might not qualify for a discount one month, then qualify the next.

You need to keep on top of the insurance company and make sure you are getting the discounts you deserve, because they will not be the ones forthcoming about what ways you can save. Asking about these programs can only help you save, not hurt you. So call your agent today.