Comprehensive, at-fault and not-at-fault auto accidents are all the different categories that help define a car accident.

A tow truck may be needed if you role-play a real accident.

We have all heard someone say that they have been in a car accident at one time or another.  But, what is an accident?

Is it just damage to their car, someone getting hurt or even just damage done to someone else’s property?  Per the Webster Miriam dictionary, the term accident means “an unforeseen and unplanned event or circumstance”.

In the world of insurance, these unplanned events fall under three different categories; Comprehensive Accidents, Not-At-Fault Accidents and At-Fault Accidents.

What it a Comprehensive Accident?

There is a difference between a comprehensive claim and a comprehensive accident.  A comprehensive claim is when you file with your insurance company that you have a rock chip or a broken windshield.  A comprehensive accident is when you hit an animal or even in some cases when the animal hits you.

Most comprehensive accidents happen when you are driving along the road and a deer jumps out in front of your vehicle and you hit it.  Even though this is technically a collision as you have “collided” with the animal, the insurance companies file this under your comprehensive coverage.  This is good for you because most people carry a lower deductible on their comprehensive coverage than they do for collision coverage, meaning you will pay less out of pocket to get your vehicle fixed.

What is a Not-At-Fault Accident?

Accidents that are covered under the collision portion of your policy fall into two categories; you are either at fault for the accident or you are not-at-fault.  A not-at-fault accident is when you are hit by someone or something else.  These types of accidents do not get counted against you on your driving record or on your insurance record.

What is an At-Fault Accident?

An at-fault-accident is just what it sounds like: you are the one that caused the accident.  These types of accidents go on both your driving record and your insurance record. This means you will most likely see not only the points go up on your driving record, but you will also see your insurance premium go up.  If you have too many of these types of accidents, your insurance company may cancel your coverage because you are too high of a risk for them to insure.

Even if you are not the main cause of the accident you could still be found at some percentage of fault in the states that have what are called Comparable Fault Laws.  These laws assign fault to both drivers if it is found that both drivers both did something to contribute to the accident.

For example, in a comparable fault state if you hit someone that pulled out in front of you, you could still be assigned a certain percentage of fault if you did not do everything you could to avoid the accident.  It could be that you weren’t paying attention and didn’t apply the brakes soon enough or that you were going too fast.  The percentage of fault that you are assigned will determine how much your insurance company has to pay for the amount of damages to your vehicle and how much the other company has to pay for your vehicle.

What the insurance actuary does, how car insurance premiums are calculated and how discounts are added later.

It's dry work, but someone has to do it.

You get your car insurance bill every month and pay it without question. It’s what the agent said you’d pay, right? So you do it.

But have you ever thought about how those premiums are actually calculated? Who’s in charge of that, anyway? As it turns out, there is a department in the insurance company responsible for just that.

Imagine that.

Meet the Insurance Actuary

Auto insurance is a business heavily dependent on statistics. It therefore follows that a statistician is somewhere in the mix. Enter the insurance actuary. Like an adjuster, an actuary is an insurance company employee or third party contractor who is never an agent. Instead, he or she has a specific job for the company: analyze loss data and determine premium accordingly.

While it’s true that the insurance company board and the state insurance commission have to approve premiums, it’s nevertheless the actuary who has the most say in how much gets charged for car insurance. The actuary almost never interacts with the public and rarely gets a lot of credit, even among insurance agents, but the job he or she does has a profound impact on not only how much you pay for insurance, but ultimately on how much the agent makes in commission.

How Auto Insurance Premiums are Calculated

As the auto insurance industry has evolved over the past century or so, it has looked at more and more variables when it comes to pricing its premiums. Today it’s not unusual for auto insurance company actuaries to consider thousands of variables including varying degrees of age, geographic location, make, model and so on. This shouldn’t surprise many people.

In other words, an actuary will look at loss history in a particular county or ZIP code for a particular demographic driving a particular type of vehicle, and do it again and again. Yes, it’s dry work, but the insurance companies consider it absolutely vital. The same actuarial work, by the way, is also done for every other type of insurance, including homeowners, commercial, life and all other lines.

What might surprise people is that auto insurance companies only look at their own loss histories. In other words, State Farm isn’t concerned with the loss ratio seen at Farmers in a certain area, or vice versa. It’s therefore theoretically possible for rates to be significantly higher in one area for one company over another because one company experiences significantly higher losses. This is one reason why auto insurance rates are different from one company to another all other things equal.

How Discounts are Factored In

Actuaries work exclusively with a base premium calculated before any discounts are factored in. Given that in today’s competitive car insurance market just about everyone qualifies for at least one car insurance discount, it’s therefore unlikely you’ll actually pay what the actuary says you should. Car insurance companies know this and build the discounts around the actuarial premiums accordingly.

Three different types of insurance adjusters and how they are involved in the claims process.

An Insurance Adjuster works off an estimate to pay for damages.

What is an insurance adjuster and what exactly do they do?

Insurance adjusters have one of the hardest jobs in the insurance industry.  They are responsible for making sure that an insurance company’s legal obligation to their insured is satisfied by paying out legitimate claims that the insured may have.

They also try to offer an acceptable offer of repair or settlement to the insured or other party and at the same time trying to keep the cost of the claim low so that the insurance company can still make a profit.

Property Damage Insurance Adjusters

An adjuster in the field of property damage views the amount of damage done to a vehicle or other property and then assigns a monetary value to it.  Most times in the case of a car accident the damage assessment is actually done by a body shop and then they submit their estimates to the adjuster for payment.  The adjuster reviews the estimate to make sure that the damage being fixed pertains to the accident, the work being done is restoring the vehicle to the condition it was in prior to the accident and not improving the vehicle and that the prices for the parts and labor are acceptable.

The assessment of damage done to a home is similar to the way damage to a vehicle is assessed and paid.  The only difference between a vehicle and home is that most of the time it is the adjuster that comes out to assess the damage to a home — not the contractor that will be doing the work.

In the case of a theft, the adjuster is given a list by the insured of what items are stolen and they are responsible to make sure that the items are covered under the policy that the theft is being claimed under.  They also research the value of each item to compile a payment that is made to the insured for the current value of the items or replacement value, depending on the type of coverage that the insured paid for with their policy.

Bodily Injury Insurance Adjusters

A Bodily Injury Adjuster is responsible for the injuries that mostly arise out of an auto accident, in some cases it can also be a homeowner’s insurance claim in the case of an injury from negligence.   They gather medical bills, assess treatment making sure that it is relevant to the injury that the insured is accused of causing and then at the end of treatment settling the claim.  They also work on the medical bills for the insured or other injured parties that were in the insured’s vehicle at the time of the accident, if the insured has the coverage.

Settlement for a bodily injury claim is not just adding up the medical bills and making payment on them.  It also includes a monetary amount for pain and suffering that was caused by the accident.  The settlement of the pain and suffering part of the claim is where there is usually the most disagreement.  The insurance company does not want to pay out more than it has too and the person that had the injury is feels that their pain and suffering is worth more than what is offered.

If the injured party and the adjuster cannot reach an agreement through their own negotiations, legal counsel is called in and the settlement is either negotiated then or it heads to court.

What license requires provisional car insurance, what it really is and how can you keep the rates lower for this type of coverage.

Applying for a provisional driver's license means you are ready to drive alone.

Provisional car insurance is a bit tricky.

Provisional insurance is not an actual insurance policy for a vehicle, it is extra coverage for a new driver that holds what could be considered a “learners license”.

The License that Requires Provisional Car Insurance

Provisional car insurance is for drivers that hold a provisional license.  A provisional license can be held by either a new teen driver or a driver that has had their unrestricted license revoked due to bad driving activity.  Because most provisional licenses are held by new teen drivers, that is the provisional license group we will concentrate on right now.

In the past it used to be that a new driver went straight from a learner’s permit to a driver’s license once they had reached a certain age or successfully completed driver’s education.  Today, a number of states require a new driver to earn a provisional driver’s license.

A provisional license adds a restricted step in between a permit and the freedom of a driver’s license.  It requires that the new driver gain additional experience behind the wheel without having to have a licensed driver in the vehicle like a permit, but with added rules that are not required with a regular driver’s license.  These can include rules such as: a driving curfew, driving during daylight only, or restrictions on who will be allowed to be in the car with the provisional licensed driver.

What Provisional Car Insurance Really Is

As we already discussed, provisional car insurance is not a policy in itself, it is just the insurance coverage that is available for a new driver with a provisional license.  It is needed because the driver with the provisional insurance is an increased risk for your policy and the insurance company wants to make sure that they are collecting the extra premium needed to cover the increased chance that one of your vehicles will now be in a car accident due to this driver.

Not all insurance companies have specific provisional insurance available to add, to find out how your insurance company will handle a new driver with a provisional license in your household contact your insurance agent.

Keeping the Rates Lower for Provisional Car Insurance

Adding a new driver to your insurance policy is expensive whether it is for provisional coverage or as a regular driver.  As new drivers are usually teens here are some tips on how to keep the rates down on your new driver.

• Make sure that your new driver keeps their grades up to earn a good grade discount.
• Enroll your new driver in an accredited driving course.
• Notify your insurance company that your new driver has a provisional license and not a full privilege license.
• If your insurance company insists on placing the provisional driver as a rated driver on one of your vehicles, have your new driver driving your oldest and least expensive vehicle – if the company will allow it.
• Check to see if you can cover your new driver with non-owner coverage.  This coverage is for drivers that do not have their own vehicle and rarely drive your vehicle.

What cars need performance car insurance, the options available and what you can do to increase your odds of getting coverage.

The potential for dangerous speeds is why performance cars are hard to insure.

It is said that Americans have a love affair with vehicles. And there is usually none more desired than the elusive performance car.

We love the look, the smooth feel of the body and the way our heart beat resets itself when the engine is revved.

But, what cars actually qualify as being labeled as a performance car and with how expensive these cars are, how does the owner make  sure that they have performance car insurance?

What Cars Need Performance Car Insurance

Cars that qualify as a performance cars all have one thing in common, a high performance engine.  So if you have a car that is all souped-up on the outside, has a killer paint job and modifications to the body, but the engine belongs in a station wagon…you don’t have a performance car.

Performance cars have high horsepower engines (more so than a normal car), possible super or turbo chargers, can rev higher than a normal car and has specialized braking and suspension installed to handle the higher performance engine.

Performance Car Insurance Options

Insurance companies have a love-hate relationship with these cars.  They love it because it brings them the prestige of saying that they insure a higher class of car and also the premiums that a performance car can possible bring in for them.  On the other hand they hate them because if they have to pay out on a performance car claim, it is going to be exponentially higher than a claim that involved a regular vehicle.

Because of this insurance companies usually take one of two routes with performance car insurance.  One, the owner has the option to insure the vehicle the same way a classic car is insured.  This means that they have a cap on how much mileage can be put on the vehicle over the course of the year and the vehicle has to be kept in locked storage when not in use.

Two, the high performance vehicle is insured in a high risk market.  This doesn’t mean that the driver is a bad risk like most of the other drivers in this market are.  It just means that the insurance company feels that insuring a high performance vehicle, due to the high expense it would incur if damaged, is a high risk for them and they require a higher premium to be able to insure it.

Avoiding Roadblocks to Getting Performance Car Insurance

A performance car owner can do a number of things to make themselves more attractive to insure and also possibly keep their premiums at a decent level at the same time.

• Wait to buy a performance car until you are 30 or older – the older more mature driver is a safer insurance risk for a company to take.
• Make sure that your performance car is street legal- this means all safety equipment such as headlights, windshield wipers, a horn, etc., are all installed.
• Don’t add modifications that an insurance company cannot inexpensively replace if damaged- consult an insurance agent with the list of modifications you have added to your vehicle when getting a quote.  Some modifications will automatically get you an insurance denial by some companies.
• Keep your driving record clean
• Install an anti-theft device

All of these precautions may make insuring a performance car a little less costly when the insurance bill comes due.