Some Things Your Car Insurance Company Won’t Tell You

1. How to determine the value of “total loss.”

Most companies will tell you that they use at least three methods or schemes to determine the actual a totaled vehicle’s value including value books, computer-generated quotes from dealers, and local market research. In this case, you will probably think that local area is your current neighborhood, but it is not specifically defined by the insurer. If, in any case, the company cannot find an auto replacement in your neighborhood, so they have to find it not from your “local area,” your totaled car’s value is certainly affected. For example, if you currently live in New York, replacing your totaled vehicle in suburbs will be cheaper than in the city. Insurance company will, of course, use quotes from suburbs area as the most-reasonably-priced estimates. The main purpose in totaling a vehicle is to allow the consumer (the insured person) to purchase the same car that is totaled in an accident within the local market. Since they use three different schemes to figure out real value of a totaled car, a consumer may end up with a cheaper car than the totaled one. It is impossible to be sure what value you will get when your company does not tell you how they determine it.

Fortunately, you can do some smart methods to help yourself and your company to do the value determination. First, you have to produce valid proof that your car was in good conditions when the accident occurred; car in good condition has better value than a wreck. Bring a copy of maintenance records including oil changes and inspection by an authorized mechanic. The records will tell your company that your auto was regularly maintained, meaning it was actually in great shape (in terms of appearance and performance) when the accident occurred. Moreover, you probably had special features installed such as multimedia system, anti-theft system, anti-lock brakes, rear view camera, or 5-harness seat belt. The car insurance company may charge you more because of some special upgrades, so make sure that your insurer includes that in the evaluation.

Another good thing is to find at least three dealers and get quotes on replacement from them; make sure all dealers in your local area or at least within short driving distance from your home. Present the quotes to your insurer and ask your insurer to provide a list of some car dealers who probably can provide a car for the price listed in the quotes. If you are not satisfied with the company’s value determination or you get less than you expect, you can choose to do mediation. So, meaning you present the case to third party (neutral) to get help to settle the dispute, or arbitration, or you can even request a formal inquiry to the court.

2. If you want to cancel your policy, do it officially

Most companies say that consumers can cancel their policies at any date, but you need to notify the insurer concerning the exact date you want to end the coverage. The statement is clear enough; in other words, it says consumers have to notify their companies when they want to cancel their policies. However, consumers often think that when they ignore the last bill before renewal, the company will automatically end the policy. Too bad, this is not how it is done. People can forget and deliberately miss a bill, and the company totally understands that. After this first missed bill, your insurer is going to send you one more bill for premium payment; if you don’t pay the bill, you will be cancelled for non-payment, and the record will hurt your credit score.

What you should do when you want to cancel auto insurance policy is to let the company know that you are canceling. Please make sure that you provide a specific date; it helps you avoid being totally uninsured for a certain period, time, term. The cancellation request will be sent to you, and all you have to do is to put your signature. It is recommended that you carefully check the document before signing it. Some companies may require you to provide valid proof that you indeed have another coverage before they can approve the cancellation. If you’ve financed your car, the dealer needs the updated policy information because valid proof of insurance is required in the purchase contracts.

Credit history still matters

The use of credit information to determine approval and premium rate is still common, despite the fact that some states already started to ban such practice. Some (if not most) companies use the credit history to generate risk score. They believe that it strongly linked or correlated to the likelihood of the consumer reporting a claim. More likelihood of filing a claim is exactly the same with high-risk driver that usually also pays more expensive premium fee compared to “safe-driver” or “the preferred class.” The preferred consumers are those with stable credit card history as it suggests financial stability, meaning they are not likely to miss a payment. People of this category are safer consumers to insure compared to people with shaky credit history. Auto insurance companies do not like consumer who pays sporadically or changes accounts quite frequently.

There are some credit card issuers who offer free credit score checking, but in most cases, you need to pay for the service. Unlike credit score, risk score for insurance-related matters will not be available for you, but both probably indicate the same thing which is financial stability. If you are currently in the market to purchase auto insurance, and it turns out that you have quite unusual activity on your credit history within only certain time frame, you can wait until one month to allow the credit activity to go back to its usual condition. If you cannot keep the credit score stable, prepare yourself to pay more expensive premium fee.

3. Budgeting by installments is not always efficient.

Installments can pay almost all items, and consumers think that it is indeed the best way to budget the expense. When it comes to auto insurance, you can ask the company to divide the annual premium into a monthly basis, quarterly, or on six month. Please put in mind that dividing the annual premium will cost you “fractional premium.” You can consider this additional service fee to arrange the installment. It can be as cheap as $10 per payment; the more you break it down, the most fractional premium to pay.

Most companies will probably offer you to pay in installments since it makes more money for them. When you apply for insurance, it is wise to ask whether there is any additional charge for installments option, and then you can compare the difference. If the fractional premium is not very expensive, then perhaps it is worth it. Another big difference between upfront payment and installments is that certain companies will immediately cancel your coverage if you miss one payment; even worse, they can do it without notification. It is best to pay up front if you can; the entire process will be easier, and you can indeed save few dollars.

Every vehicle model and type has certain premium rate

Of course, you all know that sport cars need more expensive insurance policies than a van, but insurance companies will not tell you the exact numbers. In general, it is true that attractive, sporty, luxurious car with turbocharged engine will go very quickly on the road, and it increases the risk of accidents, but this is not always true considering the discounts for safety features, security features, mileage (especially when you drive it less), etc. Auto insurance companies have a specific system to know the premium for all car models you can buy, based on the system rating by ISO (Insurance Service Office). Every type of car is rated from 3 to 27; higher number means a higher premium. Insurance Service Office says that it will not release the rating system for publication because its clients are insurance companies.

You will not get the rating system from your insurer; you may not even find it anywhere at all. The best thing you can do when you want to purchase a new auto is to ask the insurance how much insurance premium you need to pay for a new car that you want to purchase. If you keep a good relationship with an independent agent, he/she should be able at least to predict the price based on raw calculation.

4. Filing claim increases your premium.

People are always interested to see insurance companies reduce premium fee to attract potential customers. It is indeed one of the best things customers get from the competition in the market, but your insurer can increase the price right away after you file your first claim. The industry standard is to increase premium fee up to 40% of the base rate after first-at-fault accident. With the help of an online car insurance calculator you get a base rate of $500, your premium increases by $200. Some companies have different rules, but there is always a big chance your premium will go up after the first-at-fault claim. Some insurers offer “first-accident forgiveness,” meaning your first actual claim will not affect the premium at all, but the variable and requirement for eligibility can be different from company to company. You should ask your insurer if such discount is available and how to qualify for it.

You may think that in the event of an accident, everything inside the auto is covered by the insurance companies; unfortunately it is not. Damaged or stolen items such as compact discs or laptops are not covered. However, most home insurers cover small items such compact discs, so you can file claims to the company that handles your home insurance. If you bring expensive equipment such as laptop or camera, the process will be probably more difficult.

Getting the Best Best Car Insurance Company

Whenever you have a car, it is crucial to have car insurance. It is automatically, once the asset was assumed as well as it is more likely that you will act the best to have your asset insured properly. Before you are able to lawfully drive in some states even with a valid driver’s license, your car is must insured by an insurance company. In some states, it is a condition in particular. Based on above data, you must be supposing to have it and be completed as quickly as well as exactly as possible.

Your demands on car insurance are provided by several companies. They can offer you this need. For your car insurance, most of you are still paying a high price in the year to ensure your vehicle. You’ll require to detect the best company with these high prices. The following crucial step for you to think is to find the best company for your car.

The correct experience must be had obviously by the best car insurance company for fulfill your needs. Experience is crucial for a company because a company’s performance is calculated by the test of time. With the experience factor, the quality of services which the companies supply can be discovered and advised to us. Experienced company is a company that indicates a strong financial factors to pay insurance claims, and would assuredly stand by its promises.

For the same coverage, insurance rates can be dissimilar from one company to another. So, before selecting best rate you select, you should shop around for exploring the best auto insurance rates.

You’ll rapidly get exact quotes from diverse companies through insurance comparison sites by web.

After you have exact quotes from various companies, you are able to select the best company. You may select a company with the cheapest rates. But you have to check that the company will give you the best services.

If you want to appraise insurance companies to decide the best car insurance company, you can check Department of Insurance website in your state option. Every state has a website which is conserved by the Insurance Commissioner. The insurance Commissioner has list licensed agents and companies and each company complaint ratio. When you go to website of the National Association of Insurance Commissioners (NAIC), you can choose your state there.

So you have to check car insurance ratings from many companies. After getting these, you can evaluate each company communication efforts. You may prefer to further catch out the price of insurance policies. You as well have to appraise each company payment policies. By practicing two steps above, you will be able to discover the best rates from the best car insurance company.

Whenever you prefer to select the best car insurance company, you are able to conceive insurance companies which have the monthly, quarterly and annual premium is higher. These companies commonly have a variety of services and provides the added coverage or low deductibles. You require to be careful on some insurance companies that offer a higher premium without adequate services and added coverage.

Several insurance companies own a high price for their insurance. But in fact, several customers are searching policies in accordance with their budgets and still cover their car insurance needs. Indicators of good insurance companies are companies that are eager to direct important data concerning their insurance policies and offer sufficient time for you to consider and choose the best insurance policy and accommodate with your demands and budget.

Term Life Insurance Companies, Their Ratings And More

There are countless term insurance life insurance companies. As someone who’s been a life insurance professional for more than 20 years, I can honestly say that the best term life insurance companies, the top rated term life insurance companies, and the best rated term life insurance companies are very similar. It’s not to say they are all exactly alike but they are usually similar. To compare term life insurance companies is really a matter of what’s important to prospective insurance client.

Your priority

My experience has been that what most people are concerned with when it comes to term insurance is what it will cost them.

Clearly some term life insurance companies are more highly rated by companies such as A.M. Best, Moody’s, and Standard & Poor.

Some of the factors that determine a company’s rating are:

Financial strength
Financial stability
Ability to pay claims
Claims paying expediency
If any of these factors, among the others that are used, are important to you when you compare term life insurance companies, how important are these factors to you in comparison to price?

What if one company is considered one of the best term life insurance companies in the industry but the premium cost is double that for the same amount of coverage by one that is not considered one of the best rated term life insurance companies?

What’s your priority?

Ratings

Similar to being in school, term life insurance companies and all insurance companies are rated on an A-F basis.

Seems easy to understand, right?

Did you know that and “A” rated company can be rated anywhere from A++ to A-?

Did you know that different ratings companies, including those mentioned above use different criteria to determine ratings?

Did you know that an insurance company can be rated differently by the different ratings companies?

If an insurer receives a favorable rating from one rating company and a less favorable one from another rating company, which one do you think they’re going to make sure you’re aware of?

Underwriting

Insurance companies use the term underwriting to determine who pays how much for what. Different companies have different underwriting guidelines. Its name literally means that someone in the company places a signature on the policy saying a particular person meets the company’s underwriting guidelines.

There are three main methods used for underwriting life insurance policies:

Fully underwritten-most common-may involve medical exam (blood/urine specimen/attending physician statement).
Simplified issue-less common-no medical exam-decision regarding issue usually swift
Guaranteed issue-anyone who applies and meets certain conditions is guaranteed that a policy will be issued-(includes accidental death insurance and graded death benefit policies)
There are also different underwriting classifications. The most common:

Preferred-best rates
Standard-most common
Sub-standard, also known as rated or table
Some companies subdivide the classifications. For example:

Super preferred
Ultra preferred
Standard plus
Table can be in the form of a number (usually 1-6) or a letter (usually A-G) – the higher the number or letter, the higher the premium.

Convertibility

Some companies allow for conversion of a term policy to a permanent policy at a later date without proving insurability.

Other companies allow for conversion but require proof of insurability.

Some companies do not offer convertibility at all.

If convertibility is offered, it is often within certain time limits.

If you’re sure you want term and nothing else, then this is not something you need to consider.

Price

The main factors that affect price:

1. Health

2. Age

3. Life style

They are numbered as such because that is generally the order of priority companies use to classify prospective clients.

Poor health can and will exclude someone regardless of age and lifestyle and no amount of money will buy insurance. On the other hand excellent health can go a long way in reducing premiums.

A person’s age is the next factor. The age is compared to mortality rates. Different companies have different charts for mortality rates.

Another way to describe mortality rate is how many years someone of their age is away from death.

Statistically speaking, insurance companies know pretty accurately how many people of a certain age will die before their next birthday.

Life style is the third factor. The most common consideration is whether someone smokes but there are others as well, such as what someone does for a living. Certain professions are more hazardous than others.

A person’s hobbies have an effect as well. Sky diving, and speed racing are often frowned upon, and may not result in denial of coverage, but could result in higher premiums.

Regardless of all factors, female rates are nearly always lower than male rates.

Fully underwritten vs. simplified issue vs. guaranteed issue

All things being equal, fully underwritten is going to result in the best priced premium. However, often times all things are not equal.

Are you sure your health is as good as you think it is or is it possible a blood/urine sample, saliva swab, or doctor’s report could reveal something you’re not aware of, or if you’re not the most ethical person, perhaps something you simply don’t want to reveal?

A fully underwritten policy takes much more into consideration when determining rating class and price than a simplified issue policy.

Depending on your point of view, that can be an advantage or a disadvantage.

Assuming you’re being honest and there’s not already information reported about you to the medical information bureau (MIB), your chances of a policy being issued as applied for are as high as 9 out of 10 if you apply for a simplified issue policy.

On the other hand, there is about a 60% chance you will not qualify for a fully underwritten policy as applied for.

A guaranteed issue policy will definitely be issued. You will know if you qualify before actually signing the application. It’s either yes or no. However because it’s guaranteed, the price is usually much higher, unless it is a conditional policy such as an accidental death policy.

Conclusion

Unless you know the ropes and/or can take the time to weigh all the factors when comparing term life insurance companies, an experienced professional can steer you the best term life insurance companies for you to consider.

Having said that, if you want to be absolutely sure that you’ll get the insurance you want, it’s best to buy a guaranteed issue policy.

If you’re pretty sure you’re in good health but don’t want to go to the trouble of a medical exam or paramedical exam (blood/urine), or you don’t want to reveal certain matters that could affect your ability to obtain insurance, you should consider a simplified issue policy.

Once you qualify for a policy, assuming no fraud is involved, the only one who can cancel the policy once it’s been issued is you. The insurance company cannot cancel you as long as the premiums are paid.

Perhaps it makes sense to apply for a guaranteed or simplified issue policy first. Once issued then shop for the best price and/or the best rated term life insurance companies.

What’s best for you?

I invite any and all questions and comments.

Bob is a retirement planning and safe money professional who specializes in life insurance products and who has more than 20 years experience.

How to Research Insurance Companies

Before you subscribe an insurance you need to understand how insurance companies work. To help understand that we have provided a detailed explanation of Insurance Companies Business Model based on internet research and talking with some friends that are experts and work on the insurance professional field. Let’s breakdown the model in components:

Underwriting and investing
Claim
Marketing
Underwriting and investing

On raw terms we can say that the Insurance Companies business model is to bring together more value in premium and investment income than the value that is expended in losses and at the same time to present a reasonable price which the clients will accept.

The earnings can be described by the following formula:

Earnings = earned premium + investment income – incurred loss – underwriting expenses.

Insurance Companies gain their wealth with these two methods:

Underwriting, is the process that Insurance companies use to select the risk to be insured and chooses the value of the premiums to be charged for accepting those risks.
Investing the values received on premiums.
There is a complex side aspect on the Insurance Companies business model that is the actuarial science of price setting, based on statistics and probability to estimate the value of future claims within a given risk. Following the price setting, the insurance company will consent or refuse the risks using the underwriting process.

Taking a look at the frequency and severity of the insured liabilities and estimated payment average is what ratemaking at a simple level is. What companies do is check all those historical data concerning losses they had and update it on today’s values and then comparing it to the premiums earned for a rate adequacy assessment. Companies use also expense load and loss ratios. Simply putting this we can say that the comparison of losses with loss relativities is how rating different risks characteristics are done. For example a policy with the double losses should charge a premium with the double value. Of course there is space for more complexes calculations with multivariable analysis and parametric calculation, always taking data history as it inputs to be used on the probability of future losses assessment.

The companies underwriting profit is the amount of premium value collected when the policy ends minus the amount of paid value on claims. Also we have the underwriting performance A.K.A. the combined ratio. This is measured by dividing the losses and expenses values by the premium values. If it is over 100% we call it underwriting loss and if it is below the 100% then we call it the underwriting profit. Don’t forget as part of the Companies business model there is the investment part which means that the companies can have profit even with the existence of underwriting losses.

The Float is how insurance companies earn their investment profits. It is amount of value collected in premium within a given time and that has not paid out in claims. The investment of the float starts when the insurance companies receive the payments from the premiums and end when the claims are paid out. As it is this time frame is the duration from which the interest is earned.

The insurance companies from the United States that operate on casualty and property insurance had an underwriting loss of $142 Billion in the five years ending on the year of 2003, and for the same period had an overall profit of $68 Billion consequence of the float. Many professionals from the industry think that is possible to always achieve profit from the float not having necessarily a underwriting profit. Of course there are many thinking streams on this matter.

Finally one important think you should consider when subscribing a new insurance is that in economically depressed times the markets have bear trends and the insurance companies run away from float investments and causes a need to reassess the values of the premiums which means higher prices. So this is not a good time to subscribe or renew your insurances.

The changing on profit and nonprofit times is called underwriting cycles.

Claims

The actual “product” paid for in insurance companies industry are the claims and loss handling as we can call it the materialized utility of insurance companies. The Insurance Companies representatives or negotiators can help the clients fill the claims or they can be filled directly by the companies.

The massive amount of claims are employed by the claim adjusters and supported by the records management staff and data entry clerks within the Companies claims department. The classification of the clams are made on severity criteria basis and allocated to the claim adjusters. The claim adjusters have variable settlement authority according to each ones experience and knowledge. After the allocation, follows the investigation with collaboration of the customer to define if it is covered by the contract. The investigation outputs de value and the payment approval to the client.

Sometimes a public adjuster can be hired by the client to negotiate an agreement with the insurance companies on his behalf. On more complex policies where the claims are hard to manage the client may and normally uses the a separate policy add on for the cover of the cost of the public adjuster, called the loss recovery insurance.

When managing claims handling functions, the companies tries to steady the requirements for customer contentment, expenses of administrative and over payment leakages. Insurance bad faith usually comes from this equilibrium act that causes fraudulent insurance practices which are a major risk that are manage and overcome by the companies. The dispute between the clients and insurance companies often leads to litigation. The claims handling practices and the validity of claims are the escalating issues.

Marketing

Insurance Companies use negotiators and representatives to initiate the market and underwrite their clients. These negotiators are bond to a sole company or they are freelancers, which mean that they can rules and terms from many other insurance companies. It is proven the accomplishment of Insurance Companies goals is due to dedicated and tailored made services supplied by the representatives.

Missing Persons Investigations of a New Age

George Orwell’s novel Nineteen Eighty-Four was first published in 1949. You’d have thought that his vision would no longer be up-to-date 65 years later. The world he described was a world where Big Brother was watching people, constantly seeking information about crime think or any other kind of offence against the glorious super state of Oceania.

Edward Snowden showed us, that what Big Brothers these days are doing is not all that different from what Orwell described. Sure, the technology is quite different from what he had envisioned, but Orwell’s novel is not about science and technology, but about the horrible world where governments might monitor our every move, observe us in our most intimate moments and know about everything we do. Modern day supercomputers, satellites and all sorts of technology make that easily possible for various government agencies.

Yet there is so much information out there that is easily accessible without any spying satellites, supercomputers or without bugging mobile phones. It’s the information millions of users are putting online every day of their own free will, just to get some likes, re-tweets or shares. People tell themselves that they are doing this to stay in touch with each other, but they fail to realize how much of their personal information they are giving away every moment of every day.

With more than half of Australians being active on Facebook, it seems like this would be the most promising social network to start an investigation. The information found on Facebook is truly varied. There are photographs, comments as well as check-ins that give away a person’s current location. Furthermore there is a time stamp on everything, which makes it easy to create a collage of events a person went through at a certain time. No special equipment is needed for all of this with much of it capable of being performed with a simple smart phone.

Of course people tend to forget, that social media doesn’t mean just Facebook and Twitter. Apart from other household names like LinkedIn, Google+ or Pinterest, there are dozens of other smaller, niche websites that cater to all sorts of profiles. Finding information across all of these platforms can turn into a large investigation on its own.

Investigating social media is not only about snooping either. People tend to forget, that Facebook is first and foremost a platform for communication. As many people from the younger generations no longer even have a landline and choose not to publicly reveal their mobile number, Facebook and other social media may be an easy way of tracking them down for communication or to even serve court documents.

Being a private investigator and not knowing anything about social media is something that has become unimaginable in this day and age. While traditional methods such as surveillance are still very effective, they are considerably supplemented with comprehensive desktop investigation based on extensive social media profiling and as the next generation moves more of their life onto the internet the value of this brand of profiling is only going to increase.