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Why Do My Car Insurance Rates Keep Going Up?

Written by Michele Wilmonen. Posted in Ask An Insurance Question Last Updated: 08/05/2017

Q: I don’t have any accidents or tickets, but my car insurance rates keep going up. Why? It doesn’t make any sense.

A: What most people don’t understand is that insurance is literally a group effort and there are a lot of factors that play a part of your insurance rate that really have nothing to do with you.

Insurance explained in its simplest form is that a group of people pay insurance premiums into an account and when one of those people have a claim money is paid from that account to pay the claim. There has to be enough money in the account to be able to pay the amount of the claim or the whole system will not work. So to determine how much each person should pay the insurance company has to take into account how much vehicles cost to replace and fix today, how much medical bills are, how much rental cars cost, how much towing a car costs, and how much wages are to pay for the employees that service your claims and policies.

If any of those things increase, then everyone’s car insurance rates have to go up to compensate.

Another factor out of your control when it comes to your car insurance rates is the risk factor. For example, recently car insurance companies increased rates because the price of gas went down. Because gas prices dropped people started driving more, the more time people spend driving on the road the higher the chance they will be in a car accident.

If you feel you are being charged too much for your insurance after a car insurance rate increase, it may be time to do a policy review or to start shopping other insurance companies.

Does My Car Insurance Cover my Pizza Delivery Job?

Written by Michele Wilmonen. Posted in Ask An Insurance Question Last Updated: 08/06/2017

Q: I do pizza delivery with my vehicle, will my car insurance cover me if I am in a car accident?

A: No vehicle used in the course of business is covered under a personal car insurance policy unless there is a clause in your policy that specifically allows it.  Most likely there will not be. Delivering pizzas increases your time on the road and increases the chances that you will be in an accident, making you an undesirable risk to car insurance companies.  In order for your vehicle to be covered, you will need to have a commercial car insurance policy or the company you are delivering pizzas for will need to provide car insurance coverage on your vehicle for when you are on the clock with them.

If you get into an accident and your car insurance company finds out that you have been delivering pizza and you do not have any other coverage, they will cancel your policy. Not just a warning, you will be cancelled or non-renewed without conversation or exception. If you quit your job and stop delivering pizza before the cancellation, that would be the only thing that may stop a cancellation. Be prepared to provide proof that you quit your pizza delivery job though or the car insurance company may still go through with the cancellation or the non-renewal.

The DMV and Your Car Insurance Proof

Written by Michele Wilmonen. Posted in Ask An Insurance Question Last Updated: 08/06/2017

Q: After I switched to another insurance company, they told the DMV I had an uninsured vehicle months ago. Nothing I could show them could convince DMV and the Driver License Office that I had had insurance until my vehicle title was changed over because the insurance company lied. It cost me $150.

A: First, insurance companies are not out to get you and don’t purposely lie to the government.

If you can produce proof of coverage there should be a refund of the fee you paid, but I am not sure exactly the story behind why they would not accept your proof of coverage. When I have worked with my insurance clients and the DMV for proof of coverage I have rarely had an issue with them accepting a faxed copy of the client’s declarations page from me.

Now if the title was not in your name with the DMV, then yes, they would have trouble matching up your proof of coverage to the vehicle as the information does not match. But if your title was changed over and you had proof of coverage from the time the title was in your name, you are owed a refund.

I would escalate this to higher up in the DMV if you did indeed have coverage that you are not getting credit for. On the other side, if your car insurance company is not providing proof for the correct days talk to a supervisor there.

Car Insurance for Another Driver’s Work Use Vehicle

Written by Michele Wilmonen. Posted in Ask An Insurance Question Last Updated: 08/06/2017

Q: My boyfriend injured his leg and can’t drive his work truck (it’s a manual) because the constant shifting hurts. Can I put him on my insurance for 2 weeks -1 month max (muy car is automatic and has cruise control) so he can use it while he is on the mend? I just bought the car brand new off the lot and it is obviously fully covered.

A: You can actually put anyone you want on your car insurance policy if they are driving your vehicle on a regular basis, regardless of if they are living in your household with you or not. The only exceptions to this are drivers that your insurance company deems too dangerous to drive because of a bad driving record. These are the drivers that the companies see as just too high of a risk to want to insure.

Now, the other issue in this is how your boyfriend is planning on using the vehicle. You say that it is to replace his work truck, so will he be using the vehicle for work? If the vehicle is used for business it is usually not going to be covered under a personal car insurance policy, but it depends on the business usage. This is something you need to talk to your car insurance agent or car insurance company about to make sure you have adequate coverage on your vehicle while he is driving it and that his usage activity is not something that is excluded from your policy. If it is excluded from your car insurance policy and he is in an accident, the insurance company has the right to deny paying for the claim.

Need an SR-22?

Written by Michele Wilmonen. Posted in Ask An Insurance Question Last Updated: 07/02/2017

Welcome to the world of needing an SR-22, not that you are going to enjoy being here.

Sr-22 filingAn SR-22 is not an insurance coverage nor is it part of your insurance coverage. It is a filing that your insurance company does on your behalf to the state telling them that you do indeed have insurance coverage. Things usually get to this point because you have seriously misbehaved behind the wheel and now the state is going to keep an eye on you for a few years to make sure that you at least have car insurance coverage.

Not all States Have SR-22

An SR-22 is a financial responsibility verification and it is not called the same thing in every state. Some states call it an FR-44 and other states call it an FR-19. Your state will tell you exactly what you need in the documents they provide you when they tell you that you now have to have a financial responsibility filing on your policy.

The Cost of an SR-22

There is no set cost for an SR-22 filing. The average cost is about $25 per policy period, but that varies by state. It’s really not the SR-22 filing cost that is going to get you though, it’s what you did to earn the need to have to have an SR-22 filing. People that need a financial responsibility filing have usually earned a DUI/DWI or other very serious infraction. Once whatever you did shows up on your driving record and your insurance company finds out about it, that’s when you will see your rate increase and usually increase by a lot, on top of the SR-22 filing fee.

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