Posts Tagged ‘assets’
Auto Insurance Myths
Auto Insurance Myths
Having vehicle insurance gives a feeling of security. After all, if something goes wrong, the insurance company will take care of things, right?
Understanding what isn’t covered in your policy is just as important as what is covered — or maybe more important if an accident catches you unawares.
Myth: Whatever dollar amount the state requires for bodily and property damage liability coverage is plenty.
Not necessarily. It depends on your assets. If you have an accident that includes bodily injury to others and you are sued, you could lose all your assets. It’s the same with property-damage liability. If you hit someone else’s vehicle, your insurer will take care of the costs, but only up to the limits of your policy. you might not be covered for the complete expense if the other person owns an expensive vehicle.
Opt for umbrella liability coverage for damage costs that run over the limits of your policy.
If a liability case goes to court, verdicts of $1 million or more could be handed down against you. Buy liability insurance with a deductible that starts where your regular policy stops.
Myth: If your vehicle is totaled in an accident, the insurance company will pay off.
They’ll probably pay something, but the amount likely won’t be what you expect, and it might not even be enough to pay off what you still owe on the car. They’ll pay based on the cash value of the car, a wholesale amount.
Opt for gap insurance to cover the difference between what your insurer will pay for your totaled vehicle and what you still owe on it.
Myth: If someone hits your car, the other guy’s insurance will pay for the damage.
Maybe, if the other driver has insurance.
Buy uninsured motorist coverage, in case another driver hits you and has no insurance.
This insurance is a cheap but valuable addition to your policy.
Check the exclusions on your policy to be sure what it won’t cover. Look for “Acts of God” such as flooding or hail, accessories you’ve added to the car such as an expensive stereo, coverage while driving someone else’s vehicle or someone is driving yours, and break-ins where expensive items like cell phones or laptops are stolen from your vehicle.
David Uffington regrets that he cannot personally answer reader questions, but will incorporate them into his column whenever possible. Write to him in care of King Features Weekly Service, P.O. Box 536475, Orlando, FL 32853-6475, or send e-mail to columnreply@gmail.com.
(c) 2010 King Features Synd., Inc.
Daw: You can save now, but pay a lot later
Buying the right amount of automobile insurance coverage could prove far more important to you and your family than buying the right new car.
You could be charged, fined and penalized by higher premiums for many years if you drove without the minimum insurance required in Ontario.
You may not be able to afford any more than the minimum coverage required by law. but if you can afford more, and you have assets and income to protect, skimping on coverage could prove costly to you and your family in the event of an accident. but you could also come to regret buying only the minimum coverage.
There is always a chance you could cause more damage to someone else than the basic policy will cover, or that you will suffer more damage than another driver’s policy will cover.
The importance of optional additional coverage will rise starting Sept. 1. That’s when Ontario will cut the base level of medical and rehabilitation coverage from $100,000 to $50,000. so you may wish to buy an optional increase in statutory accident benefit coverage.
The amount drivers will pay in future for accident benefit coverage for serious injuries will depend in part on whether other government-approved changes reduce costs.
For example, treatment of minor injuries is to be controlled by a new $3,500 cap that will also apply after August.
We won’t know the effect on prices for a while. so the best we can offer now is a look at an example of current costs for basic and optional coverage for a new car buyer.
The price you pay will depend on a number of factors: the claims experience of the insurer you choose, your age and driving record, the neighbourhood where you live, your vehicle, plus the distance and type of driving you do.
Other factors include whether you also insure another car or a home with the same insurer, and how long you have stayed with that insurer. the price of optional benefits may also depend on these many variables.
Lets look at cost of policy options for a driver we will call Tim.
We were provided sample figures by Anne Marie Thomas of InsuranceHotline.com, a sister company of the Toronto Star that is one of three free, online, rate comparison services available to Ontario drivers.
Tim is married, 35 years old, with 19 years of driving experience. He lives in the Willowdale district of Toronto. He has committed no driving infractions. He has not been at fault in a collision.
The minimum
Tim would have to pay one insurance company $1,881 to buy Ontario’s basic auto insurance policy for a 2010 Honda Civic sedan. Of that total, $1,055 would pay for third-party liability coverage, direct compensation for property loss and uninsured automobile coverage. the remaining $826 would pay for various statutory accident benefits.
Accident benefit coverage now pays up to $100,000 of medical rehabilitation, plus other accident benefits such as a couple of years of disability income, and $72,000 for attendant care after a serious injury. these two amounts can would rise to $1 million for a catastrophic injury, such blindness or loss of a limb.
The accident benefits would be paid regardless of who was at fault in a collision.
Basic liability coverage, as per current regulations, will only protect Tim or someone he gives permission to drive his car for legal claims for damages of up to $200,000, and for Tim’s legal defence. This might not be enough if the person injured could prove they lost their ability to earn an income.
Under direct compensation, the insurer would pay to repair or reimburse Tim for up to the market value of his car, but only if the accident occurred in Ontario and was caused by a driver covered by an Ontario insurer.
The amount paid to Tim would be reduced by whatever percentage he was deemed to be at fault for the collision. Fault is determined by a set of regulations that describe common accident situations.
Uninsured motorist coverage would pay Tim up to $200,000 for damages he or his family suffered as a result of the negligence of an uninsured or hit-and-run driver. From that $200,000, 5 per cent or $10,000 would be available to pay for damage to his vehicle.
Important options
To increase the protection he would enjoy if he injured someone else, Tim could buy $1 million of liability coverage for an extra $175 a year. a further $1 million would cost $83 more, and bring the total of $2 million of coverage to $258 a year.
Brokers and agents would strongly recommend to Tim that he also pay for family protection, which is described in Ontario Policy Change Form (OPCF) 44R. This option would make his $1 million or $2 million of third-party liability coverage available to him or an eligible member of his family if a hit-and-run driver or someone without enough insurance or wealth caused them to be injured.
This extra coverage is relatively inexpensive, and well worth the money. For Tim it would cost an extra $27 if he chose $1 million in liability coverage, or $43 if he chose $2 million of coverage.
Tim could further protect himself or his family in the event of serious injury with OPCF 47. This policy option would provide an additional $1.17 million of medical, rehabilitation and attendant care coverage, regardless of who was at fault in the accident.
Few drivers buy this additional medical coverage, but it could make life a whole lot easier if a family member were ever injured seriously or catastrophically. Tim’s cost would now be $70 a year.
Protecting the car
It would cost Tim $452 a year for collision coverage to insure his vehicle in the event he ever caused a collision, or if his vehicle were ever damaged outside of Ontario or by an out-of-province vehicle. He might choose to go without this coverage once his car is much older.
For $138 a year Tim could also buy comprehensive coverage to protect his vehicle in the event of theft, fire, vandalism, storm damage, falling objects or aircraft and assorted other perils.
That would be the premium cost of collision and comprehensive coverage if Tim agreed that $500 would be deducted from his compensation. If he agreed to a $1,000 deductible with either type of claim, he would save a total of $21 a year.
It’s also possible to buy all-perils coverage for somewhat more. This combines the collision and comprehensive coverage, but also covers you for the theft of your vehicle by a resident of your home or an employee at your repair garage.
The OPCF 43 option at $35 a year would ensure Tim would be reimbursed the original purchase price of his new car during the first 24 to 29 months. the duration of this coverage will depend on the insurer he chooses.
Less vital options
There are numerous other options that Tim could consider.
It would cost $50 a year to protect himself from an increase in premiums after his first at-fault accident. (Some insurers charge nothing.)
OPCF 20 for $25 a year would ensure he got compensation for a rental vehicle while his own vehicle was being repaired after a collision he caused.
OPCF 27 for $25 a year would extend his liability coverage to a rented vehicle, but only in the continental United States and Canada.
He could double the basic death benefit coverage to $50,000 for him and his wife, $20,000 for a child and raise the funeral benefit from $6,000 to $8,000 for an extra $14 a year. but Tim should really have other, more comprehensive life insurance for himself and his wife.
It would cost $23 a year to increase caregiver benefits to $325 a week from $250 to look after one dependant, and to $75 a week from $50 for each additional dependant.
The sum of all these items mentioned would lift Tim’s annual premium from $1,881 to as much as $3,014, with $500 deducted from collision and comprehensive coverage.
Beyond that, Tim could increase his basic weekly income replacement amount from a maximum of $400 to a maximum of $600, $800 or $1,000 a week. but he may already have short-term and long-term disability insurance with his job, or coverage that he bought personally. and for a further fee, he could buy inflation protection for his benefit payments.
Tim could be eligible for various discounts, or he might find less expensive coverage with another insurer.
When Tim goes shopping for insurance, he can use one of three free online rate comparison services or approach three or more brokers that represent several insurers. He could also approach agents that represent a particular company, or call certain other insurers directly.
He should decide on what coverage he will need in order to get an accurate comparison of prices.
The names of all insurers and their recent average price changes can be found on the website of the Financial Services Commission of Ontario under auto quarterly rate approvals. www.fsco.gov.on.ca/english/insurance/auto/rates/default.asp
A broker, agent or representative of an insurer that sells directly to the public should be able to provide advice on coverage options to suit your circumstances. the more helpful that person is, the better service you are likely to get in future.
Understanding Automobile Insurance (PDF)
Ontario Automobile Insurance Owner’s Policy (PDF)
Insurance rate comparison services:
Safety Equipment and Anti-theft Devices for 2010 Models (PDF)
Auto Insurance Views » Blog Archive » Cheap Car Insurance — Is It …
The idea of saving the most on auto insurance is welcome by all. The problem is not the desire but how some folks go about it. bad as that might sound, some people do even worse: they adopt a mindset that is very harmful to their financial security. We’ll consider the wrong and then propose a safe way to enjoy savings…
Some folks believe that the best way to save is to buy just enough to keep law enforcement agents off their backs. why should this mindset be discouraged? The problem with this approach is that the state minimum might NOT be sufficient for your personal needs. you can only know if you have adequate coverage after you have carefully assessed your insurance needs. going about it without knowing your peculiar circumstance is a sure way to either pay for more insurance than you need (a plain waste of hard earned dollars or get too little (a sure recipe for disaster down the road).
The other wrong mindset is that which thinks that auto insurance is just something to be done because the law so mandates it. Beyond helping you meet the requirements of the law, it helps you protect your assets and, therefore, gives you financial stability. Paying a little premium to protect your most valuable assets should be considered a very smart move — The government shouldn’t be the one to force to do this.
Yes, you might be ok with just third party coverage in most cases. what would you advise if there is a crash and the car is totalled? would taking out another car loan then look smarter than having adequate auto insurance coverage? Wouldn’t it be a relief to know that you’ll get a new car just by filing a claim?
So, it’s certainly a good thing to know why insurance exists in the first place.
Now that we’ve dealt with the wrong mindsets, here’s a superior way of saving without putting yourself at risk…
Take sometime out to research tips on how to make massive savings on auto insurance. if you visit my sites you’ll get many tips and links to sites that will give even more tips. For the moment, let’s get you started with the following tips…
1. if you want cheaper rates, ensure you maintain an excellent credit rating. Insurance companies claim that they’ve found out that profiles with poor credit ratings also represent higher risk in auto insurance.
2. if you have an excellent record, then you’re eligible for lower rates. so do all within your power to ensure that you do NOT have any traffic violations on your record.
3. take a hard look at your vehicles safety rating. if you get a high on safety rating, you’ll save a lot in premium dollars.
4. get and compare quotes from a wide range of insurers. For details on how to do this right and for many more tips, visit the links below (In the resource box).
Are serious about finding sufficient coverage at very low rates? then you have to visit auto insurance comparison and car insurance quote comparison. Chimezirim has syndicated thousands of articles that have helped many save on insurance.
Cheap Car Insurance — is it Equal to Cutting Corners? | Insurance Hub
Auto Insurance Views » Blog Archive » Cheap Car Insurance — is it …
Affordable Auto Insurance Tips You Should Know
Do you currently have car insurance that is going to expire soon? do you want to find a better rate when you renew your policy? Affordable auto insurance is not hard to find, but you will have to know the right place to look. And, there are a few hints that will help save you money when you do renew your auto insurance.
One of the first things that you will want to do is to determine what type of coverage you need to satisfy the laws of your state. States have different laws about the amount of insurance that you must carry on your vehicle in order to legally drive in that state. some states may allow you to carry only liability insurance, while others will require you to carry more coverage. if you already have auto insurance, then you may be aware of the insurance requirements of your state. still, you may find that you can get by with less coverage then you currently have and save yourself some money. if you do not already have coverage, then you will want to check on the insurance requirements of your state.
After you have determined what the minimum coverage requirement is, then you will want to identify any discounts for which you qualify. Since there are numerous types of discounts that companies give, you may discover that you qualify for some of those discounts. for example, there are discounts for insuring multiple vehicles and for having a good driving record. there are even discounts for being a student. Furthermore, if you are insuring your automobile along with other assets such as your house, you can get a multiple-coverage discount. in order to find the most affordable auto insurance, you must take into account any of these discounts for which you might quality.
Another thing that you may consider if you want to get car insurance that you can afford is to raise the amount of your deductible. With a lower deductible, you will pay a higher monthly premium. by raising the amount of your deductible, you will have a lower monthly insurance payment. if you are a safe driver, then it may work to your advantage to have a higher deductible since the chances of you filing a claim are less. Having a higher deductible means you will be able to save money each month,
If you want to save the most money on your auto insurance, then you will want to get an online quote. by getting a quote online you will be able to compare prices and determine which companies have the lowest rates. Shopping online for affordable auto insurance will save you a great deal of time since you will not have to contact each insurance company individually. in most cases, when shopping online for affordable auto insurance, all you have to do is enter your zip code and fill out a single form that requires a minimum amount of information. that one application will get you quotes from several different companies at one time.
It has never been easier to quickly find affordable auto insurance.
General Auto Insurance – Understanding What Will Be Enough For You …
Many people are wondering whether or not general auto insurance is going to be enough for their needs. they want to make sure they get insurance for a low cost. however, you need to consider whether or not the basic insurance is going to be enough for you if you have to make a claim. here is a closer look at general auto insurance and what will be enough for your car insurance needs.
If you only purchase general auto insurance, meaning that you go with the minimum cover that the law requires you to have, then if you only have a small accident, it may be enough cover for you. of course on the other hand, if you totally demolish your vehicle, then it may not be enough. There are some cases when having more than the minimum auto insurance can be important.
Why the Minimum May Not be Enough
Although many people do end up purchasing the basic cover that they have to carry in their state, sometimes minimum cover may not be enough. If you have to have $10,000 in cover for property damage, what happens if you are in an accident and you cause $20,000 in damage to someone’s property?
This means that you’ll end up being the one liable for the $10,000 over the amount of cover that you have. this can turn into a nasty legal situation when you don’t have enough cover and you are in a bad accident that ends up exceeding the cover that you have.
Now that you can see why general auto insurance is not always enough, you also need to know about some specific times when you may need to have more than basic cover for your vehicle. If you don’t have enough cover and you cause damage to property or to someone else’s car or person that isn’t totally covered by your insurance company, then that person can sue you for the rest of the damages. In this case, if you happen to have assets, savings, or a home, then you can be in big trouble.
You could end up losing your savings, any stocks you have, or even your home if this occurs. this is why going with higher coverage can be so important if you happen to have any assets. You want to make sure that no one is able to touch your assets if you are in a vehicle accident.
Going through a vehicle accident is a scary situation. Finding out that basic general auto insurance wasn’t enough to cover the accident can make this bad situation even worse. Although it can cost you a bit more to go with higher coverage on your vehicle, it can definitely be worth avoiding all of these financial problems that can happen if you are under insured. So, don’t just think about the up front cost of your insurance plan. think about the future and whether basic coverage is really going to be enough for you if something were to happen.
General Auto Insurance – Understanding What Will be Enough For You …