Gap Insurance protects your finances if your new vehicle is a total loss.

Gap insurance is a special insurance coverage that is available for your new vehicle to protect you from financial hardship in the event of your vehicle being a total loss in an accident.

It is a coverage that is only offered in certain circumstances and can vary in price depending on who sells gap insurance. If your new vehicle qualifies for Gap coverage it is best to shop around for the coverage and not accept the first offer.

What is Gap Insurance?

If you were to get into a car accident and the damages to your vehicle exceed a certain percentage of the value of the vehicle (usually 80%) the insurance company will total out your vehicle and pay you for the value of the vehicle instead of fixing it.

Sometimes though the amount that they pay your does not meet the amount that you may still owe on your car loan. For example, the insurance company may pay you $8,000 for your vehicle, but you still owe the bank $10,000. This $2,000 dollar gap is exactly where gap insurance comes in handy.

If you purchased gap Insurance on your new vehicle, it would step in and pay for that $2,000 left over on your car loan so that you were not still paying on the loan even after you no longer had the car. Gap can only be purchased on new vehicles and certain used vehicles depending on the insurance company and the coverage always has to be purchased within a certain frame right after buying the new vehicle.

Car Dealers Sell Gap Insurance

When you purchase a vehicle from a car dealer and sign the finance papers with them, one thing that they will offer to you is gap insurance. It is part of the paperwork that they go through with you when they are trying to get you to add warranties, extra interior packages and whatever else they may be able to throw in to increase the price of the vehicle.

If you add gap coverage at this time it will be added into the total amount of your vehicle that you are going to finance. Even though the gap coverage does not seem like a lot when you break it down into your monthly car payments, the total amount that you are paying is quite high and you could possibly get gap insurance cheaper from other sources.

Finance Companies Sell Gap Insurance

Just like when the dealership sets up the financing with you and offers gap insurance so do auto loan financing companies. If you plan on getting a loan through your bank or other source and purchasing your vehicle that way, they too are going to offer you gap insurance when you sign the loan papers. Again, just like with the car dealerships the price that they offer their gap insurance for could probably be found at a lower price elsewhere.

Insurance Companies Sell Gap Insurance

The least expensive way to purchase gap insurance is to purchase it through your insurance agent. The gap coverage can be added to your current insurance policy when you add your new vehicle to the policy. The cost to do this is considerably less expensive than adding it to your car loan. For more information and to find out the requirements to have this coverage, contact your insurance agent.

Sign giving fair warning to would be red-light runners that they are being watched.

No matter how much of a hurry you are in or how impatient you are, running a red light is dangerous. Per the Insurance Institute for Highway Safety, red light runners cause 22 percent of all traffic accidents in the country.

Because of this and the increase in the amount of red-light violations that are ticketed by police officers, cities have started putting cameras on traffic lights to catch and hopefully deter red light runners from continuing this behavior.

How Cameras on Traffic Lights Work

Cameras on traffic lights are mounted high above the intersection so that they have a clean view of the vehicles going through the intersection. You can usually spot them mounted on a street light or even on the traffic light itself and are usually placed in intersections that are the busiest or have the highest percentage of red-light runners.

There are four per intersection and each single camera is set up to view one of the four directions that come through the intersection. When a person runs a red light a sensor is triggered and the camera takes a picture of your license plate.

What Happens if You get Caught on Camera?

If you run a red light and the camera gets your license plate, the police can gather all of the information that they need from these cameras to issue you a red-light violation ticket. After they have processed all the evidence, you will receive a ticket and even a picture of you committing the violation in the mail a month or two after you ran the red light.

What Happens to Your Insurance if a Traffic Camera Catches You?

Getting caught by a camera on a traffic light has the same negative effect as any other ticket on your insurance. The points added against your driving record are no more and no less than if you were to have been caught running a red light by a police officer. Because there is no difference, the amount that you insurance premium may increase will be just the same.

Why are Cameras on Traffic Lights Needed?

Cameras prevent cities from having to post a police office at an intersection at all times to catch red light runners to keep other drivers safe. This makes it so that the officers can be used in other needed areas that require a police presence rather than a camera.

Other Devices on Traffic Lights

Not all devices above traffic lights are camera’s that are taking pictures of red light runners. Some devices are simply sensors that gather data of traffic flow through a certain intersection and others are sensors that tell the traffic light to change when there is someone waiting for a green light. But, if you just make it a habit not to run red lights, you won’t have to be concerned as to which one is a camera and which one is not.

For more information on red light cameras visit the Insurance Institute of Highway Safety.

The GEICO phone tree impressed this policyholder.

A few days ago, I had the annual pleasure of taking our Hyundai Sante Fe in for the state inspection. The time had come to spend $29 to get a sticker on my windshield that says my car is safe to drive on Texas roads. Granted, at least I’m not paying the exorbitant fees of some other states, but it was money out of my pocket at a not-so-convenient time.

So I thumbed through my glove box for my insurance cards and sure enough, I hadn’t replaced my old cards when my renewal came in the mail. Having worked in a few insurance offices, I know a lost insurance card is the most common reason customers call an agent’s office or insurance company. So I didn’t feel so bad NOT having it handy. (I’m just glad I didn’t discover it when a cop pulled me over.) But I still needed an updated card for the inspection.

I called the GEICO number listed on my expired insurance cards. Listening to the phone tree, I navigated pressing 3 or 4 options to get a replacement insurance card. They asked for my email address or fax number. Since I’m not the best at texting, I opted for the garage’s handy fax number. Within 3 minutes, GEICO had faxed my updated insurance cards to the garage. And I never spoke with anyone at GEICO.

I know some people are more comfortable talking with a live person to get a new insurance card. Had that been my option, I would have gladly taken it. But in most cases, it would have taken longer for a customer to get new insurance cards after talking with a customer service rep. People get busy, fax machines jam, and other things tend to delay a simple fax. To me, the phone tree is the most efficient use of my time – and the company’s time. I’m just glad the options were easy to understand and it worked.

Kudos to GEICO on getting me an insurance card in a timely manner. I don’t call them often, but when I do, they seem to be able to handle things well.

When you lose your insurance ID card...

Have you ever lost your insurance ID card? It’s the one you get in the mail every 6 months or so with your policy. Most of us have misplaced our insurance identification card – also known as ‘proof of insurance.’ It’s not uncommon. Reality is, most of us don’t think about our ID card until a police officer stops us and we’re thumbing through the glove box.

Getting A Replacement ID Card

It’s not the end of the world if you lose your insurance ID card. You get it directly from your insurance company and there’s usually no hassle. It’s easy to get a new ID cards.

First off, call your insurance company. You can get their phone number online or on your policy. Some companies provide this service on the internet. However, you will need your policy information to login to their online system.

Second, once you get a customer service representative on the phone, just ask them for it. Since it is a service request, you don’t even need a licensed agent to send you your ID card. These days, cards can be emailed, faxed, or snail-mailed to customers.

One caveat to this process – some companies may charge you for replacement ID cards. It’s usually just a nominal fee. In my opinion, this is an unnecessary charge. Such nickel-and-dime operations cause the insurance company to lose more goodwill than what they gain from a $5 service charge. If you’re with one of those companies, it’s probably time to shop around. You don’t want a company that sticks it to you every chance they get.

My Experience with ID Cards

When I was an insurance agent, I took many phone calls where my customers probably threw away their policy (and ID cards) before looking in the envelope. It happens. In fact, that was the main reason people customers called our office – a lost insurance card. Whatever happened to it, it got lost in the shuffle and the customer needed a replacement.

I recently called my current insurance company, GEICO, for a new set of ID cards. The representative was very polite and said she could send them out, no problem. That’s exactly the service I expect. Don’t make me feel bad because I misplaced something – just put it in the mail and be done with it. The next time I lose my ID card, that’s the treatment I’ll expect.

Did this thief find one of the most stolen cars?

Is your car one of the most stolen cars in America?

Every year, over 1.3 million cars are reported stolen. According the National Insurance Crime Bureau (NCIB), many of the same cars rise to the top in their annual list. Surprisingly, the most stolen cars are usually the most common on the road. Every 24 seconds another car is stolen – will yours be next?

Thieves Prefer Common, Japanese Cars

You may be shocked to discover Porches and BMWs don’t top the list. No Lexus is in the top ten. Evidently, thieves aren’t looking for cars with the most prestige. Most likely they want the more available cars. Simply put, there are more Honda Civics on the road than Lotus Elises.

Moreover, thieves don’t prefer American-made vehicles. In fact, the three most stolen vehicles in the United States aren’t made by US companies. Reviewing the Top 10 most stolen cars, this particular crime of opportunity lends itself more to Japanese-made automobiles than those made in Detroit.

Coverage for Stolen Cars

In case you’re wondering, comprehensive insurance usually covers a stolen car. If it ever happens to you, contact your insurance company. Your adjuster should be able to take care of the loss, minus your deductible in a timely fashion. If not, you can always leave a review for how they treated you: Customer Reviews

Check out the list. If your car is listed below, you might want take extra precautions to keep it safe. Otherwise, you could be looking for a new ride sooner than you’d like.

Rank	Most Stolen Cars In 2007
1	Honda Civic (2005)
2	Honda Accord (1991)
3	Toyota Camry (1989)
4	Ford F-150 (1997)
5	Chevrolet C/K 1500 (1994)
6	Acura Integra (1994)
7	Dodge Ram Pickup (2004)
8	Nissan Sentra (1994)
9	Toyota Pickup (1988)
10	Toyota Corolla (2007)

*The NCIB publishes the most stolen cars list. According to their website, the NICB “is the nation’s leading non-profit organization dedicated exclusively to preventing, detecting and defeating insurance fraud and vehicle theft through information analysis, investigations, training and public awareness.”

She likes her insurance company.

We’ve collected one hundred plus consumer reviews for auto insurance companies. Each review comes from actual customers, collected over many months, and time-stamped. Reviewers post actual experiences they’ve had with insurance companies. Sometimes they’re current customers – often they’re former customers with bad experiences.

Consumer Reviews for Car Insurance Companies

Consumer Reviews for the Big and Small Insurers

Consumers review the big names. Sometimes you’ll hear about large insurers not keeping their promises. Problems from Katrina and other natural disasters often suggest those guys are just out for themselves. But read how they treat regular customers – from the customers’ own words.  

Not only that, but we also provide consumer reviews for many smaller insurers. If you’re shopping for car insurance, you need to see what other customers have said – before you buy. This is especially true for smaller carriers.

Leave A Review About Your Own Experience

One more thing: you can help other consumers as they shop for insurance. If you have an experience with a particular company, feel free to leave a review – even if it’s a negative experience.

I’ve included links below for all the insurance companies we have reviews for. If you don’t see the company you want to review – no problem. Send me a message. Write up a short review and give them a 5-star rating for Overall Rating, Price, Service, and Claims. I’ll post it as soon as possible.

As always, everything on Car Insurance Guidebook is FREE.

AAA Customer Reviews

AIG Customer Reviews

Allstate Customer Reviews

American Family Customer Reviews

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Commerce Insurance Customer Reviews

Eastwood Customer Reviews

Empower Insurance Customer Review

Erie Customer Reviews

Esurance Customer Reviews

Farm Bureau Customer Reviews

Farmers Customer Reviews

GEICO Customer Reviews

Guide One Customer Reviews

Liberty Mutual Customer Reviews

Nationwide Customer Reviews

Plymouth Rock Customer Reviews

Progressive Customer Reviews

Shelter Customer Reviews

State Farm Customer Reviews

Sun Coast General Customer Reviews

Teachers Customer Reviews

The Hartford Customer Reviews

Travelers Customer Reviews

USAA Customer Reviews

Wawanesa Customer Reviews

Will Some Insurance Companies Crash In 2009?

As we wrap up 2008, we look back at a horrendous year for the U.S. economy. The markets have suffered their worse declines in a generation. Unemployment is higher than any time since the early-Reagan Administration (and climbing), and businesses are folding left and right. Even gigantic insurance companies are struggling to keep business.

Economic Problems Will Affect Auto Insurance Companies

The insurance sector is not immune to economic turmoil. This year brought one of the worst hurricanes in recent memory when Hurricane Ike slammed into Texas. Insurance losses mounted for the major insurers. In addition, we’ve suffered through the most challenging market environment since the 1930s. Insurance companies are now looking forward to a dismal year in 2009.

Standard and Poors (S&P) rates financial services companies in the United States. They recently released their outlook for 2009. According to Insurance Journal,

“S&P notes in its report on North American insurers that in 2008 its outlook on several U.S. insurance sectors was revised to negative, meaning that over the next year to 18 months, more downgrades than upgrades are anticipated.”

These problems relate to the reserves held by insurance companies. Just like small businesses have cash in the bank for a rainy day, insurance companies exist for the rainy day. They must keep cash, bonds, and other securities on hand in case of claims. Most companies hold reserves in the stock market. As the market declined throughout the year, insurance companies’ reserves were depleted. This could pose some challenges for many insurers. Some could struggle – others could fail.

What Insurance Company Problems Mean To Consumers

These challenges are more pressing to those consumers who purchased annuities and other long-term insurance products. For instance, if an insurance company fails, the retiree who bought an annuity from them could lose everything. This is one risk many insurance agents don’t tell you about. According to Annuities for Dummies, 3^rd Edition “If the company fails (a rare event, fortunately) and isn’t absorbed by another carrier, you can lose your money.” (p.137, 2008). That’s bad news for the person responsible for receiving benefits from the annuity, or annuitant.

However, I see a far less risk with a failed auto insurer. For one thing, you’re only out the money you paid in advance to the company. If you normally pay your premiums 6 months in advance, then the worst you could lose is 6 months of premium. Not painless, mind you, but still not as bad as losing $250,000 from a worthless annuity.

What To Do About Your Auto Policy

If you are concerned about the financial well-being of your car insurance company, then you should either switch to a monthly payment plan, or switch carriers. Don’t ignore the problem. At the end of 2008, we may not be through with the credit crisis. Keep an eye on the news to see if your carrier is having solvency issues.

Bear in mind: all of the bank failures in 2008 started out as rumors. We will see problems with more insurance companies in the coming months. The question is when and where they will arise. Thank you S&P for letting us know.

Any thoughts about troubled insurance companies?
Feel free to leave a comment.

Can running a red light jack up your car insurance rates with a simple picture?

Red light cameras can be an annoying invention. For those of us who grew up driving without these mounted traffic cops at every intersection, it can be unnerving for a ticket to show up in the mail a month after you drove down a particular street. No, I’ve never been ticketed this way (at least not yet), but I have fought a red-light ticket and won. But that’s another story. Today, it’s all about red light cameras.

Red Light Cameras

A red light camera is a complex camera system triggered by a car running a red light. The camera does not take continuous pictures, but begins capturing images when a car crosses a “red lit” intersection (is that grammatically correct?). Some cameras even allow a split-second grace period after the light turns red, but I wouldn’t count on it if you’re aiming to beat the system. Red light cameras have been around since the 1960s, but did not become widespread until more recently.

Do Red Light Cameras Make Streets Safer?

Which driver hasn’t thought twice about running a red light because of these cameras? I know I have. Evidently, I’m not alone. According to the Texas Department of Public Safety, red light cameras have reduced collisions by 30% in a sample of 12 cities. This means that more drivers stopped before dangerously rushing through intersections with a red light camera, than in those without a camera.

Whatever annoyances they may cause, I can’t argue with the numbers. Not only do the cameras seem to be reducing collisions, but they also may be reducing traffic related deaths. In 2006, the Insurance Institute for Highway Safety reported almost 900 people were killed in crashes related to running a red light. An estimated 144,000 were injured in the same sorts of accidents. If red light cameras reduce collisions, no doubt they are saving lives too.

Running Red Lights Can Affect Your Auto Insurance

If you get ticketed for running a red light after the camera caught you, your car insurance premiums could be affected. Insurance companies can count moving violations against you in the same way they count an at-fault collision against you.

Most of the time, it only affects drivers who are shopping for auto insurance. Companies pull driving records for shoppers and the prospective company usually finds red light violations. However, those tickets could also affect premiums with your current insurer. Sometimes auto insurers pull driving records at your renewal. If that’s the case, they could find a red light violation and rate you accordingly.

If you find yourself with a red light ticket, then take Defensive Driving to get it dismissed. If you can’t do that, then hope your insurance company doesn’t see it. You’re not obligated to report the violation to your company. Drive safer, keep a clean record, and that ticket will fall off the insurance company radar in 3 years.

But those cameras are not just about car insurance rates. Even if they seem annoying, they’re there for everyone’s safety. Who knows? They may have even saved your life.

Have you ever been ticketed for running a red light or by a red light camera? Leave a comment about your experience.

AmPm Insure

I’m a member of an insurance forum called AmPmInsure. The forum members are all very knowledgeable about the various aspects of insurance including car insurance. I even learn from the contributors. There’s a lot to know in this business.

One of managers at the forum asked if our readers might be able to use a few insurance calculators. Even though they don’t directly relate to auto insurance, I thought someone might find them helpful.

Here’s the list:

1) Life Insurance Calculator

2) Disability Insurance Calculator

3) Home Insurance Premium Savings Calculator

4) Sports Injury Calculator

5) Body Mass Index Calculator (for Health Insurance)

To see these calculators on their website, check out:
AmPm Insurance Calculators