Archive for the ‘new car insurance’ Tag

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

 

Christmas Outtakes   Leave a comment

As promised last weeks, here are some of the more amusing outtakes from last week’s photoshoot for our Christmas “card”:

Sammy

She just couldn’t stay awake!

These next three would’ve made an amusing gif.  It appears almost as though she’s singing “Joy to the World!” like Clark Griswold.

Sammy

JOY

Sammy

TO

Sammy

THE WORLD!

This is one of my favorites of all of them:

Sammy / Mork

Nanoo Nanoo
Oh, wait – too young for that joke?

These last pictures show just how hard it is to keep Sammy’s attention, even with treats!

Sammy steps

Who’s upstairs?

Cute bored dog

Are we done yet? Pretty bored over here…

Sammy looking down

What’s that?

Sammy treats

I’m coming to get my treat now!

Sammy housetop

Up on the housetop, click click click….

(for reference on that last one)

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 3   1 comment

insurance discount

I’m confused – why aren’t you utilizing all the discounts out there?

Discounts, discounts, everywhere!  Everywhere you look, someone on TV, some billboard, magazine ad, etc is promoting all the various discounts that their insurance company offers.   It can get confusing and even overwhelming!  Safe driver discounts, home ownership discounts, good doggy discounts…. it goes on and on and on!

And yet, one thing that we find over and over – most people aren’t taking advantage of the many discounts available to them!  I can’t tell you how many times we will talk to someone who has their auto policy with one insurance company, for instance, but their homeowners coverage is with a different company.   Multi-policy discounts are some of the most advantageous available, and yet we STILL have clients that don’t utilize them!  Almost every company offers this to their personal lines clients, but are we all taking advantage?  Are you?

The list goes on:  people do not take advantage of life policy discounts, payment plan-related discounts (pay in full, quarterly payments, etc), Triple A (AAA) discounts, burglar/fire alarm discounts, sprinklered building, etc.  There is something to be said about not always being aware what discounts are available, and more importantly – discounts offered (and their value) can vary widely from company to company and even from policy type to policy type.

Your best option is to take the time to talk to your agent about the various discounts that your current insurance company offers.  If your agent is independent (they represent more than one company), ask about what kind of discounts OTHER companies offer, and if it would make sense to get a quote from them.

Another thing to consider – make sure to keep your agent up to date with situations & changes in your household and family.  For example, how will your agent know to apply a driver safety course completion discount to your auto policy if you don’t tell him!

“But how can I know if something will save me money on my insurance?” you ask.

Sammy says, “there’s a very simple rule you can follow” –   If you’ve made a change or completed a project that you feel may save you on your insurance – contact your agent to see if a discount applies!

Quick note for business owners:  A lot of the discounts that apply in personal lines do not exist in commercial insurance.  But take heart!  The pricing structure in commercial lines is very different, and you can do things like add credits for being loss free that you cannot do in personal lines.

Ahhhh…. I got my discounts!

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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.

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