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Car Insurance for Women

Written by Todd Clay. Posted in Research Last Updated: 11/08/2010

Why auto insurance is cheaper for women and how companies rate different groups of drivers

Young woman in car

Will she really pay less money for car insurance than her brother?

Like it or not, women are charged different rates for car insurance than men.

That said, throw any negative preconceptions you may have about women drivers out the window. All things being equal, car insurance for women is less expensive than men.

Why is that?

Statistically speaking women are involved in fewer accidents. Ask any insurance actuary – the person responsible for setting premium rates.

Why Premiums Are Different for Women

Though it sounds like insurance companies are discriminating against men, rest assured they are not. Companies favor or punish different groups based on cold, hard statistics alone.

Here’s how it works:

Every insurance company employs at least one actuary. This is a person with a mathematics background who analyzes losses incurred by that company. They also determine if any particular group of drivers are causing more or fewer claims than others. The company then bases its premiums based on the actuary’s study.

It is important to note that insurance companies only consider their own loss experience when compiling these numbers – with only a passing interest in what their competitors are doing. What’s more, different companies place a different emphasis on different outcomes.

For the most part pretty much every company comes to the same basic conclusions: drivers under 25, as well as drivers over 74, cause a disproportionate amount of claims. In addition, women cause fewer claims then men. Thus, car insurance for women is cheaper than car insurance for men – though the rates don’t vary wildly.

The Gender Gap In Rates

The gender gap in insurance is most apparent at the high school ages. While insurance for a teenage girl is still expensive, it’s not as expensive as it is for her brother or boyfriend.

However, by the time she turns 25 rate differences between her and her male counterparts tend to level off. By the 50s rate differences between men and women are often negligible, but even at that age there are still differences in the woman’s favor.

Insurance is fundamentally a business of statistics. While by definition these statistics drive the business and prefer some groups over others, no reputable company will prefer or discredit anyone based on anything else.

When it comes to car insurance for women, the buying and servicing process should be absolutely no different for them than it is for men. If it is, you should probably take your business elsewhere.

Bike Insurance for Your Motorcycle

Written by Todd Clay. Posted in Definitions, Research Last Updated: 03/23/2011

How bike insurance is similar to a car policy, why there’s a difference in premium, and when to carry full-coverage

green bike / motorcycle

Why you need a special policy to cover a cool ride.

Bike insurance has hit the big time. Only a few short years ago, insurance companies were squeamish about insuring Harley-Davidsons and Kawasakis. They’re now stepping over each other to add motorcycles to their policy rolls.

It has finally dawned on many of these companies that motorcycle insurance makes sense for both them and the rider. However, there are a few unique things to consider when writing a bike insurance policy.

Is it Similar To A Car Policy?

On the surface, motorcycle insurance operates in much the same way as automobile insurance. State minimum liability limits for motorcycles are the same as for cars. Motorcycles can also be insured for collision and comprehensive coverage.

However, on the whole bike insurance is considerably cheaper than car insurance. Indeed many companies are now advertising $100/year policies, an amount that can easily be a monthly payment for auto insurance. That said, as with automobiles it’s not always the best idea just to go for the lowest possible price when it comes to bike insurance.

Why Liability Coverage is Less Expensive for Bikes

A motorcycle is smaller than a car. The damage it’s likely to cause to other people’s property is less. For this reason, individuals with bike insurance can get away with lower liability limits than those who drive cars, but it is still not recommended to go just with state minimums.

Remember state required liability limits for property damage are outdated and quite low. Limits for bodily injury can be lower than for automobiles as well, but one shouldn’t skimp on those either for much the same reasons. While there’s no need to go crazy with liability limits, it is always a good idea to have limits high enough to cover the worst-case scenario.

Covering Injuries on Your Bike Policy

The real risk involved with motorcycle accidents is to the motorcyclist himself. For obvious reasons, regardless of fault, a motorcycle driver is much more likely to be seriously injured in an accident than an automobile driver.

It’s important to cover yourself, either with a good health insurance plan or with a generous medical payments on your bike insurance policy, preferably both.

Material Damage on Bike Insurance

Full coverage for bike insurance works the same way as it does for auto insurance. However, full coverage on motorcycles costs less because motorcycles usually cost less than cars.

That said, assuming there are no lienholders the question regarding full coverage for motorcycle insurance remains the same. If the bike stolen or seriously damaged, will it hurt you financially? If your answer is ‘yes’, you should probably keep full coverage.

How bike insurance is similar to a car policy, why there’s a difference in premium, and when to carry full-coverage

Cheap Van Insurance For Your Van

Written by Todd Clay. Posted in Research Last Updated: 08/18/2010

How van insurance is different from normal auto insurance, getting the extras covered, and how RV insurance may make more sense

yellow delivery van

Good, cheap van coverage is easier than you think.

Getting cheap van insurance is very similar to getting cheap car insurance. After all, a personal van policy is no different from a personal auto policy – but that’s different from commercial van insurance.

If you’re trying to keep your premiums low, treat it the same way you would normal car insurance. For inexpensive van insurance, you’ll want to go with the lowest liability limits and highest full coverage deductibles to limit costs. Just make sure you’re getting adequate coverage in the process.

Shopping around doesn’t hurt either. Different companies look at different things when calculating premiums so rates can vary dramatically.

However, there are other things one should consider when insuring a van. There are a lot of extras generally not found in the run-of-the-mill sedan. Cheap van insurance isn’t just about getting the best price.

Additional Coverage for Van Extras

But a standard auto policy won’t always cover a van’s extra stuff. Vans often come with extra items – these items can usually cover with an ‘inland marine’ rider. The term ‘inland marine’ is a quaint 19th Century throwback, originally referring to insurance for items transported along canals. Today it refers to coverage for items not covered by the standard auto insurance.

Extra items on vans include third-party installed car stereos and other valuable aftermarket items. Agents or brokers may forget to tell you that if an item is not factory installed, it may not be covered on a standard automobile policy for theft or vandalism. The inland marine rider fills that gap by covering those items separately.

In addition, most inland marine coverage is based on stated value. In other words you tell the agent how much it is worth and it’s covered for that amount less any deductible – though that amount may diminish over time due to depreciation. Bear in mind, this coverage isn’t just for vans. Any vehicle with aftermarket upgrades installed would benefit from inland marine coverage.

RV Insurance for Really Big ‘Vans’

The cheapest van insurance may not be “van insurance” at all. If your van qualifies, you may want to consider insuring it as a recreational vehicle instead of as a personal automobile.

In addition to liability and material damage coverage, RV insurance often comes with extras such as coverage for personal property, liability coverage at vacation sites, emergency expense coverage (such as for a hotel room if the RV breaks down), and other enhanced benefits not found in a typical personal auto policy.

Check with your agent or broker to see if your van qualifies for RV insurance.

How Much Does Insurance Go Up After An Accident?

Written by Todd Clay. Posted in Research Last Updated: 03/17/2015

*Please note: We cannot tell you if your car insurance will go up after an accident or if you will lose your license.  Only your insurance company can advise you of any increases to your personal insurance policy and only your local authorities or state DMV can offer advice on your driver’s license.

blue car hit utility pole

How much will this driver’s insurance go up?

How much does insurance go up after an accident?

It depends. Largely on the nature of the accident and how your insurance company views it.

Sometimes your rates are unchanged. In another situation, your policy will be dropped from the company – a bad situation. Oftentimes, the answer is somewhere in between. That’s why it’s often hard to answer how much insurance goes up after an accident.

Before delving into specifics on whether post-accident insurance increases, you should understand one of the immutable laws of auto insurance:

Drivers with Incidents (Accidents/Tickets) Pay More

In general, people who have tickets pay more than people who don’t have tickets. In addition, people who make claims pay more as well. On the other hand, safe drivers with no tickets or accidents pay the lowest premiums.

That’s just how it works in Insurance Land.

How Insurance Companies Rate An Accident

So if you have an at-fault accident and there’s a large claim, the rule is you will pay more for your insurance premium. If the accident involves gross negligence (think DWI), your insurance policy could even be canceled. Ultimately, that means you will pay more for your insurance since you’ll need high risk insurance.

So how much more will you pay?

Assuming you don’t get canceled, you may get a surcharge on your policy. These surcharges can be 10% or more. They’re also stackable – meaning you can have more than one surcharge if you have more than one accident.

Surcharges are also different from company to company and usually last 3 years. If you get one, plan to pay an increased rate for awhile. Bottom line, if you have an at-fault accident with a big claim, your insurance will go up.

But there are exceptions to the rule of increased premiums after an accident.

Some companies overlook a minor accident. If the company pays out a small claim, (a few hundred dollars) rates may be unchanged. In addition, claims under the comprehensive (i.e. “other than collision”) portion of your insurance generally do not affect your rates either, regardless of how large or frequent they are. In other words, fixing the ding in your windshield should not affect your insurance premiums.

It’s also possible to have a bad accident and not have your insurance rates go up at all. The important factors are if you got a ticket and if your insurance company had to pay a claim.  For instance, if you’re in an accident, are not found at fault and don’t make a collision claim, chances are your insurance company won’t even know it happened. In that case, your rates will be unchanged.

Your At-Fault Accidents Will (Probably) Be Discovered

If you’re concerned about increased premiums after an accident, you may be thinking about trying to hide the incident. Bear in mind, it’s hard to hide accidents – especially if you’re shopping for a new auto policy.

While writing new business auto insurance companies check your record against a shared database which includes your motor vehicle and auto insurance claim record. If the agent doesn’t do it, the underwriter at the main office will. Don’t be afraid to ask for a copy of this report as errors can and do occur.

In addition, your current company will sometimes run internal audits on existing customers. It’s best to be up front with your agent or broker so they know what’s going on.

Accidents Are Usually Forgotten – In Time

One nice thing about accidents they don’t stay on your record forever. For underwriting purposes, most companies disregard anything that happened more than five years ago, no matter how serious.

Some companies overlook accidents at the three-year mark. Rates can also go down at renewal on existing policies as accidents drop off in time. Keeping track of when your accidents drop off can save you money, especially if you’re currently in a high-risk company and can qualify to go back to lower standard company rates.

When Will Rates Increase After An Accident?

Another thing to consider is that an insurance company cannot change your rates mid-term for any reason. Any rate increase must come at your next renewal. Therefore several months may pass between an accident and any corresponding rate increase.

This can give you time to find a less expensive insurance company. However, that company will see your accident and rate you accordingly right away – they sometimes even change your rate later if you hid an incident during underwriting. Just be honest with the new company if you’re shopping because of a pending cancellation.

High Risk Insurance for New or Bad Drivers

Written by Todd Clay. Posted in Definitions, Research Last Updated: 03/23/2011

Why you may need high risk can insurance, what are the options, and how long do you have to carry the policy

red car upside down after accident

This car's driver may need high risk insurance pretty soon.

High risk insurance is not a pleasant experience. When insurance companies deem drivers ‘risky’, they send them to a special division (company) or refuse to write a policy altogether.

High risk auto insurance is not cheap. It’s not pretty. But the good news is it’s also not permanent.

Drivers with spotless driving records are typically placed in a ‘standard’ auto insurance company. These are companies that advertise on TV. Most people can stay in a standard company if they have a minor accident or a single ticket, but after that they’re forced to insure with a high risk company.

High Risk Insurance For Two Types of Drivers

High risk companies can be affiliated with the higher-profile standard companies or operate separately. Naturally, they are more expensive. High risk insurance companies to two types of drivers:

  • People with no (or recent) driving records.
  • People with less-than-perfect driving records.

Drivers With No Driving Record

Insurance companies typically define ‘no driving record’ as not having driven for the past 3-5 years. These drivers are often put in high risk insurance companies to establish their auto insurance history. These drivers tend to be genuinely new drivers who just got their license, or perhaps those who were licensed in the past but haven’t driven recently.

The potential of getting stuck with high risk insurance is yet another good reason to keep continuous coverage on your auto insurance.

Most people in this category can move to the standard companies in 6-12 months provided they maintain a clean driving record – though each company is different on when you can move.

Drivers With Bad Driving Records

Drivers with bad records are usually consigned to the high risk insurance companies for a longer period of time. If you have a driving violation that requires you to file an SR-22, which is basically a proof of minimum liability insurance coverage sent to the state, you’re almost certainly going to a high risk company for your auto insurance needs.

Don’t worry about the SR-22 itself though. High risk insurance companies are all quite familiar with them and will file them on your behalf for a nominal fee, or perhaps no fee at all. Just make sure to tell them you need it.

There’s one final thing to remember about high risk insurance companies. There’s no need to stay in them if you don’t have to. If you’ve been continuously insured and haven’t had an accident or claim in a few years, you don’t need to be there. A good insurance agent or broker will review your coverage periodically and let you know when it’s time to go back to the standard company. If you don’t have a good agent, it’s time to shop around.

Assigned Risk: Can’t Get High Risk Insurance?

But what happens when not even high risk insurance companies will insure you?

If you can’t get insurance with an insurance company, you have to get it from the state – also called the assigned risk pool. Since even the worst drivers are required to carry automobile liability insurance in all 50 states, it follows that they have the right to obtain that coverage.

Assigned risk means the state government takes the driver and assigns him to an insurance company that does business in that state. That company is then legally required to write a policy on that driver.

The state in turn subsidizes the program and sets the premium, which protects both the insurance company and driver to a certain degree. This allows even the worst drivers to legally stay on the road, at least until their driver’s license is revoked. Assigned risk is also expensive, and the coverage available is sparse, but for some drivers it’s the only option.

One nice thing about auto insurance is that nothing is forever. Most insurance companies only consider the last three to five years of a driving record. This means even the worst driver who has no hope of obtaining insurance outside the high risk pool today can eventually repair his or her record and go back to the standard company and its cushy safe driver discounts.

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