Archive for the ‘car’ Tag

To Dashcam or not to Dashcam?   Leave a comment

Dashcam 3

One of my co-workers recently had a hit-and-run accident, in which the other driver pulled over briefly, saw the severity of the situation, and took off again. With no information about the other driver, my co-worker had to file the claim against her auto policy and pay her deductible.

The situation raised a question in the office that ultimately prompted several of us to purchase dashcams: “What can be done to protect ourselves against a hit and run driver?” While there is no perfect solution, a high-resolution dashcam is a great start.

Dashcam 1

The idea is simple enough to comprehend – with a high resolution video recording being created while you drive, all those crazy near-misses you experience while driving are recorded in great detail… and should you have an accident, most of the cameras include sensors that automatically lock the data for a length of time before and after impact is detected to prevent the video from being deleted.

But will a dashcam help? The answer is, unfortunately… it depends. It mainly depends on two factors – what happened, and how much information the camera captured.

Though most cameras provide high resolution and wide angle videos, they still only capture what happens in front of you – not much help if you get hit from the side or the back. While there are models that also include a rear-facing camera, that still leaves the sides of the vehicle unmonitored.

Dashcam 2

And, of course, the most important piece of the puzzle is whether or not the license plate of the offending vehicle is legible. That’s were the cost of the equipment can skyrocket quickly – not just in the camera, but also in the quality of memory card needed. For a high quality front and back camera with ultra-fast memory card, you could be looking at more than $200 … and if you have more than one vehicle that’s used regularly in your household, that cost goes up exponentially!

Ultimately, the choice to purchase and use a dashcam is very similar to choices you have to make while purchasing your insurance coverage: do you spend money up front to seriously reduce your financial risk down the road? Will the investment now protect you from headaches later? Unfortunately, it’s impossible to answer these questions with certainty, so it depends on your own tolerance for risk (vs spending more to pass that risk on).

Driverless cars – insurance for the future?   Leave a comment

Sammy driving

The Insurance Dogger isn’t sure if she’s ready to jump out of the driver’s seat just yet!

As you may have noticed, there is a lot of news coming out lately about driverless cars – Google is one of the main players in the field,  but Carnegie Mellon University made a big splash locally and nationally when it unveiled a very successful test-drive in the Cranberry area nearly two years ago.  A lot has been written in the last couple years about the various pros & cons of driverless cars, so I won’t rehash them here – a simple Google search will reveal just about anything you’ve ever wanted to know about the future of driverless vehicles.

However, as an insurance agent, one of the first things that comes to mind whenever the topic comes up is, how will the insurance policy, and the liability coverage in particular, function when it comes to insuring driverless vehicles?  This is not an easy question to answer, as there are many facets to consider, and much of it is based on speculation because the technology has not put forth a viable “ready for the public” option yet.

There are several legal considerations that, for the most part, I will set aside for now – primarily for the sake of expediency.  One of the big issues at hand is that, generally, each state has autonomy over how insurance laws & coverages are mandated.   I will address issues as broadly as possible, but the situation is still largely theoretical and developing as the technology progresses.

From an insurance standpoint, one of the largest liability concerns is the question of who is at fault (“liable”) when a driverless car is involved in an accident – is it the “driver” of the vehicle?  The engineering firm that put together the software operating the vehicle?  The manufacturer of the vehicle?  All of the above?  This is not an easy question to address, and seems to generate more questions than answers.  Was there an error in the software?  Was the driver able to manually override the vehicle and didn’t?  Did the steering system or brakes fail to receive or comprehend the instructions the software passed along?  Some of these questions will sort themselves out as the technology becomes more “concrete” and less speculative.  But the truth is, I fear, legal liability concerns will not actually be resolved until after the rubber hits the road and accidents occur.

Another concern along those lines is who is responsible for damages to the driverless car itself if it is responsible for an accident in which it gets damaged?  As above, should the software design firm pay for your damages?  The car company?  Are you responsible, as the owner of the vehicle?

A bit more disconcerting – what if your vehicle’s software is hacked?  If the vehicle is dependent upon mobile maps & directions to get from point A to point B, what if mobile/cellular service is lost?  How will the vehicles navigate, and in particular, how will it respond to the ever-changing conditions of roads and construction, closures, traffic, etc?

Lloyd’s of London published a market-watch article (along with its far more lengthy corporate report) about some of these very issues.  While the article isn’t conclusive, it does provide some key insights into considerations and factors at hand: “liability will be a key issue because autonomous and unmanned vehicles involve the transfer of control from direct human input to automated or remote control.  ‘In many cases the technology is there to create fully autonomous vehicles, but the legal and regulatory environment needs to be developed further, and public trust will also need to be fostered,’ says Maran.”

One thought I see being repeated consistently is that, ultimately, the increased safety offered by autonomous vehicles will rapidly outweigh the legal and insurance liability concerns: “Many of the routine claims that currently drive the cost of motor insurance will reduce or almost disappear entirely, explains Powell. The resulting decreased exposure for insurers would probably require underwriters to change the design and pricing of motor insurance products, he says.”

At the end of the day, because the technology is a relatively long way off, the “problems” of insuring driverless cars still bring up more questions than answers.  Regardless of the characteristics of the final product, the technology is coming, and the insurance companies that are able to quickly analyze and adapt to the new risks will be a huge step ahead of their competitors.

Some additional resources, reading, and even some videos to watch:

Insurance Information Institute study, Feb 2015

Wall Street Journal article, August 2014

Auto Insurance Center (undated)

CNBC / AllState CEO, Jan 2015

CNET / YouTube – great review of pros & cons of self-driving cars

Google self-driving car – A First Drive

Wall Street Journal YouTube article

CMU driverless car driven around Pittsburgh

Bill Shuster rides in driverless car

 

A review of personal insurance – Auto insurance (physical damage)   3 comments

Dog Blog

I’ve been waiting for a little while now….

OK OK I know that I said I’d be back to finish up auto coverages a few days ago.  Business being what it is, it’s taken me a little while.  But here we are, and off we go!

Last week we reviewed liability and injury coverages.  This week, we are going to review the coverages in place to protect the damages to your vehicle itself and ways to save on them.

  • Collision  – Even though this is “backwards” from how the coverages appear on your policy, it’s easier to explain starting with Collision.  Collision provides coverage for your vehicle when it collides with some other inanimate object, or is hit by another moving vehicle.  In the state of PA, unfortunately, that includes when your car is hit by a shopping cart.  Some examples of collision claims:  if your car is parked and gets hit by another car (or shopping cart!), you hit a patch of black ice and slam into a tree, or you are at fault in a multi-vehicle accident.  Ways to save – see note after Comprehensive
  • Comprehensive (Comp) – Comprehensive is most easily explained as “all other covered forms of physical damage to your vehicle,” hence the name.  In PA, comprehensive coverage does pick up one type of accident that would otherwise be considered a collision – hitting an animal or pedestrian.  These damages would be covered by comprehensive.  Other examples of comp claims:  if your car is stolen, catches on fire, suffers flood damage, a tree falls on it, etc.  Windshield and other glass damage is covered by comp (unless caused by a non-animal collision).  Ways to save – Easiest and most common way to save is by increasing your deductible.  Be wary of two things, though – first is that collision is far more expensive than comp, so it’s far more effective to increase your collision deductible.  Second is that you should be aware that the savings by increasing the deductible will not offset (in one year) the increased out of pocket cost in the event of a claim.
  • Comp or collision pay for a total loss of the vehicle based on the depreciated (Blue Book) value of the car.  All other (partial) losses are paid based on the actual expense of repairs (less the deductible).
  • Rental Reimbursement (RR) – RR provides coverage if you need to pay for a rental car as a result of a covered comp or collision claim.  In other words: you have a covered claim.  Your vehicle will be in the shop for two weeks.  You need a car in the interim.  You pay for a rental vehicle.  RR coverage will reimburse you for the cost, up to specified daily limits and maximum duration (typically, $30 a day for 30 days).  Ways to save – only real way to save here, outside of not purchasing it at all, is to carry lower per day limits.
  • Towing & Labor (T&L) – T&L provides coverage in the event that you need some form of roadside assistance (change a flat tire, charge a dead battery, keys locked in your car) or need to be towed for virtually any reason (mechanical breakdown, run out of gas, etc).  No real way to save here, it’s generally very inexpensive to begin with.  Only thing to consider – if you are paying for this AND AAA or some similar road service, be aware you may be paying twice for the same coverage.
  • Gap Coverage – This provides coverage for new cars that are purchased using a car loan.  As noted above, in the event of a total loss to your car, the policy will only pay for the depreciated value of the vehicle, NOT the loan amount.  Typically, the loan amount is higher than the depreciated value, creating a “gap” in coverage.  Gap coverage fills the void by paying for the difference.  This coverage can be purchased through the dealership or on your auto policy.  Compare BOTH terms and pricing before choosing where to buy the coverage!

That about does it for this review.  There are other liability and physical damage coverages available, but these are by far the most common (at least in PA).

Relax

So just relax and enjoy the ride – knowing you are well covered!

A review of personal insurance – Auto insurance (liability)   Leave a comment

Miss me

Hi everyone! Did you miss me?

Hey everyone!  It’s been too long since we’ve posted anything.  We’ll try to blend the purpose of this post between a good mix of information and ways to save.  Since our prior posts focused on business insurance, we’re going to start in a more widely useful direction – personal insurance.

Auto insurance is, at least in the state of PA, a legal requirement – but probably far less than you think.  In fact, state regulations only require that you carry liability coverage for the bodily injury and property damage of others, as well as your own personal medical expenses.  The limits required by the state are similarly low – only $15,000 per person & $30,000 per accident for bodily injury, $5,000 for property damage, and $5,000 for medical expenses.

Here are some of the coverages you can purchase, as well as ways to save on them:

  • Bodily Injury (BI)BI covers your liability for injuries people NOT in your vehicle sustain in the event of an accident for which you are at fault.  BI claims can get very tricky in PA.  If you are responsible for an accident that injures the passengers of another vehicle, typically the medical payments coverage on the policy on the OTHER (non-responsible) vehicle responds first.  It can quickly get convoluted, so in the interest of brevity, contact your agent for additional details of how coverage applies in the event of an injury.  Ways to save – see notes after Property Damage.
  • Property Damage (PD) PD covers your liability for the damage done to the property of others in an accident for which you are at fault.  For example, if you rear-ended a slower moving vehicle, back into a parked car in a parking lot, or take a turn too quickly and end up in someone’s front yardWays to save in general, liability coverages are the most difficult to reduce your costs on – the most convenient way to save is by lowering your limits.  However, especially if your driving record is clean, you won’t save as much by reducing limits as you might think.   Other ways to reduce your rates include changing driver/vehicle assignments on your policy (the youngest driver on the oldest car, for example), purchasing a safer car, or doing something to reduce your daily (commute) or annual mileage.
  • Uninsured/Underinsured Motorists (UM/UIM) – this coverage is similar to BI but in reverse.  If you or your passengers are injured in an accident where another party is at fault, and that party either does not have any BI coverage (uninsured) or they don’t have enough BI coverage (underinsured) to pay for your injuries, UM/UIM will pick up the difference (up to your policy limits).  Ways to save the best way to save without reducing your limits (if you have multiple vehicles on your policy) would be to reduce your limits and add stacking.  Stacking multiplies your UM/UIM limits by the number of vehicles on your policy.  So, if you have two cars on your policy, and carry $50,000/$100,000 unstacked limits, you can reduce your limits to $25,000/$50,000 and stack the coverage.  You will maintain the same total coverage (as long as you have at least two vehicles!) and pay less.
  • First Party Benefits (FPB) I will address these as a group, as they are typically lumped together in a batch on your policy.  Additionally, they can be combined into one large limit for the whole group of coverages, instead of having separate limits for each.  This is typically called blanketing coverage.  I digress – the four FPB coverages are medical expense, income loss, accidental death, and funeral benefits.  Each FPB coverage pays if you or your relatives (residing in your home) are injured or killed in an accident, regardless of who is at fault.  Medical Expenses operates similar to health insurance – covering your actual medical & rehab costs.  Income loss operates similar to disability coverage – covering your lost wages if you are injured in an accident and are unable to return to work.  Accidental Death and Funeral Benefits, similar to life insurance, provide coverage in the event you pass away as a result of an accident.  Ways to save in order to get higher limits for less money, consider purchasing the combination option, where you get one lump sum for all four coverages, which you can divvy up as necessary.  For example, instead of maintaining higher limits on each individual coverage, consider carrying combination coverage of $100,000 or $177,500.  Additionally, if you already have health, disability, or life insurance, consider reducing or removing the applicable coverages from your policy.

In the interest of your sanity and keeping this short, I will stop for today.  We’ll review the physical damage coverages you can purchase on your vehicle itself tomorrow.
In the meantime:

Sammy Dog Blog

Keep on riding!

4 ways NOT to save on your insurance (and what you should’ve done) – Part 4 (Severity)   2 comments

Insurance Claim

Sammy attempts to demonstrate a major claim

This week Sammy and I are going to finish up our discussion on how your claims history affects the premium you pay for your insurance policies.  As you may recall, last week we discussed how the number of claims that you file can drive up your premium.  This week, we are going to discuss how the severity (ie – total dollar value) of individual claims affects your premium.

Just a quick search on Google   and you will find there is a lot of information out there about severe (major) insurance claims – the top causes of major homeowner’s claims, other blogs about major insurance claims, and even a website that lists the top 10 biggest insurance claims ever.  When reviewing a large claim, especially in light of your future premiums, companies will generally consider a couple factors.

  • Cause – I’ll make this as simple as possible.  In the event of a large claim, the cause of the claim can be a factor that is considered with regard to premium change – although, this primarily applies to business insurance.  Basically, if you have a large claim, but it’s not something that would be considered “your fault” (ie – a weather claim, an uninsured driver hits you),your agent can make an argument with the underwriter that this large claim was something outside of your control and not easily prevented.  It’s not always successful, but it’s still worth having a discussion.
  • Prior Claims – This ties into cause, in a way.  If you have a large claim, but no prior claims, your agent can again make an argument that this was a one-time event that could happen to anyone, especially if you were not at fault.  It’s definitely not always going to be successful, but it helps.  However, if you have a couple prior claims, regardless of size, it makes it much more likely that you will see a premium increase (or potentially a non-renewal notice) upon expiration of your current term.
  • Loss Ratio – Loss ratio is the calculation a company makes to determine your “net” expense to them.  The most simple calculation takes the total dollar amount paid on every claim you’ve ever had while insured with that company (for THAT particular line of coverage – auto, home, etc), and divides it by the total amount of premium you’ve paid while insured with them (again, for THAT line of coverage).  For example, let’s say you had a $1,000 claim and a $45,000 claim.  You’ve been insured with the company for 25 years, and paid $23,000 of premium.  Your loss ratio calculation would be $45,000 + $1,000 = $46,000, divided by $23,000. $46,000/$23,000 = 2, or 200%.  Another example – the company paid out $8,000 in claims, and you’ve paid in $16,000 in premium.  $8,000/$16,000 = .5, or 50%.   Obviously, the higher your loss ratio is, the more likely it is your premium goes up.  This is one argument for having longevity with a company – the longer you stay, the lower your loss ratio will be – and thus, the greater chance that a loss, even a large one, will not have a dramatic effect on your premium.

One last thought – claim history is something which “travels” with you.  Similar to your driving record with the DMV or your credit score, ALL insurance companies provide claims information with a central database.  When you change insurance companies, the new insurance company will contact the central database and have access to basic information about all of the prior claims that were filed.

In summary – two different factors are the biggest influence on how your claims history can affect your annual premium – frequency and severity.  Obviously, the more that you do to reduce those two factors, the more favorable your insurance premiums will be!  I’ll stress filing numerous small claims – the more small claims that you file, the less flexibility there will be in the pricing of your coverage.

A little dry these last two weeks, but I hope it helps you to understand how insurance works!

insurance blog

Man, I’m worn out! That’s a lot of info

4 ways NOT to save on your insurance (and what you should’ve done!) – part 1   4 comments

expensive insurance

Got those payin’ too much blues? Sammy’s here to help!

Hello one and all, and happy Fourth of July!  Today we are going to start a four part series addressing common mistakes people make while attempting to save money on their insurance.  Rather than quick blurbs, Sammy’s idea was to go a bit more in depth each week.  Off we go!

This week we are going to cover one of the main ways that we all attempt to save money – by adjusting the coverages on our policies.  We’re going to cover both general and specific tips, and we DEFINITELY would like some feedback – questions and comments are invited!

Sammy suggested that we should title this week’s installment “Adjusting the wrong coverages,” and while it may be a bit negative, it does hit on our central focus.  There are many changes that you can make to your policy to save money.  The problem arises when the money that you save, versus the reductions in coverage you are accepting, do not make it worth while.

In general, when reviewing potential reductions in coverage, always consider what you are losing.  Does the amount of premium you are saving really pay for itself, when compared to the coverage you lose?  For example, if you are increasing your deductible from $500 to $1,000 to save $50 annually, is it worth it?  In order to make up for the extra $500 you will pay in the event of a loss, you would have to save $50 a year for ten years to make up the difference!  And that’s just to break even!

In addition, if you are looking at removing a coverage completely, make sure that you are comfortable that if you were to have a loss, you would be able to pay for it out of pocket.  For example, if you remove comprehensive coverage on your car, and it’s stolen – could you afford to buy another car to replace it?

Other things to consider BEFORE making changes:

  • If you are going to increase your deductible on your auto policy, make sure that you increase the right one.  Increasing your comprehensive deductible, in general, will not save you NEARLY as much as the collision deductible.  In addition, it will dramatically increase your out of pocket cost on smaller claims like cracked windshields.
  • If you are going to remove physical damage coverage completely, consider at least leaving comprehensive on the policy.  It doesn’t cost much, and provides lots of good coverages for the price – repairing cracked windshields (usually for free) or replacing them if necessary, hitting an animal, if your vehicle is stolen, vandalized, or catches fire.  It also covers unusual claims like if your vehicle is damaged or lost in a flood, hail damage, trees falling on vehicles, animal damage (such as a rodent taking up residence in your vehicle!), or if your vehicle gets painted accidentally by a line crew.  If you heard about the paving truck on the PA turnpike who leaked tar all over the road and damaged hundreds of vehicles – comp claim!
  • If you are considering reducing the building limit on your homeowner’s policy, you might do better by increasing your deductible.  Oftentimes, when you jump from one deductible level to the next, the building coverage rates drop dramatically more than if you just reduce your coverage.  Thus, you will accomplish two things – save more money on premium, and have better coverage in the event of a total loss – you will pay more for the deductible, but will not have diminished limits to contend with!  And, there is the nasty possibility of a co-insurance penalty – which I can address in comments, if you have questions!
  • If you are considering reducing the liability limit on your homeowners, look at a smaller reduction, but on the auto policy instead.  This one is “hairy”, though – it’s not often a good idea to reduce your liability limits – this is the protection you have in the event someone else sues you.  If you are dead set on reducing liability limits, get information on how much you would save by taking a smaller reduction on the auto policy.  In other words, you will likely save more money by reducing your auto liability limit by $50,000 ($100K to $50K) than reducing your homeowners by $200,000 ($300K to $100K).  Again, though, this is a LAST RESORT recommendation ONLY.

This is a lot of information.  Bottom line when looking to save money on your insurance, spend an extra 20 or 30 minutes to discuss your options with your agent.  Most agents are more than willing to see what they can do to keep their clients happy!  And if you end up saving money, while not losing much coverage-wise – all the better!

insurance savings

I’m tuckered out! That’s a lotta typing!

Quick hit for those who just bought a car!   Leave a comment

car insurance

Want to sleep easy? Make sure your newly purchased vehicle is listed on your insurance policy!

Did you just buy a car recently – new or used?  Doesn’t matter.  You better call your insurance agent, just to make sure that your new vehicle is listed on your policy.  A lot of times, the dealership tells people that they will call your new vehicle information in – and most times they do.  But there are occasions that it doesn’t happen for whatever reason, and the vehicle doesn’t get added.  If you don’t call it in, people like my daddy won’t know to add it.

Make sure your vehicle is insured BEFORE the loss occurs!! Call your agent.

Wanderlust Travel & Photos

Seeing the World One Trip at a Time

Take Back Roads

Seeking authentic American experiences, one back road at a time

Natalie Breuer

Natalie. Writer. Photographer. Etc.

Rare Historical Photos

And the story behind them...

coldbike

Cycling with kids, sometimes in the cold.

German is easy!

The blog for all who want to learn German...

frugalfeeding | Low Budget Family Recipes, UK Food Blog

n. frugality; the quality of being economical with money or food.

A Dog's Blog

Sammy Bo Journey, Insurance Dogger

Bucket List Publications

Indulge- Travel, Adventure, & New Experiences

The Butchered Pig

Food and musings...

Denise Minger

Rescuing good health from bad science.