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When to Drop Car Insurance

Written by Todd Clay. Posted in Research Last Updated: 04/20/2011

High rates, bad service, discounts not being applied, and unfulfilled claim contracts all tell you when to drop car insurance.

A Broken Car Insurance Contract

When an insurance companies doesn't live up to their end of the contract, it is time to drop car insurance.

Sometimes it is just easier to stay with an insurance company even when you are not happy. Finding a new company takes time and most people know very little about insurance so trying to make sure that that they have the right coverage for them can be a daunting task.

But when things get bad enough with your current carrier there are just certain times you need to know when to drop car insurance.

Drop Your Insurance When the Rates Get too High

Every six months your insurance premium seems to be creeping higher and higher. While it may only look like a little bit of an increase on this renewal compared to last renewal, how high has it gone up since you first started with this insurance company?

Maybe you have had a couple of tickets also or even an at-fault accident and now your rates have really jumped. If you have had enough of the rate increases, no matter what the cause may be, you can always start shopping around for rates with other insurance companies.

When you do shop around to get new quotes with other agents or right here on our site, make sure you are getting rates for the same coverages that you have right now so that you can see if you are really saving money or not with a new carrier. Also always keep your current coverage in place, just in case you can’t find a better rate. If you do find a new policy, purchase the new less expensive one and cancel your old more expensive one as soon as possible.

Drop Your Insurance When the Service is Bad

There is no excuse for bad service with an insurance company – it doesn’t matter if you are working through an agent or directly with the insurance company. If you are doing business with a company, you expect to be treated with respect and dignity because you are making it possible that they have income. So when the service is not what you expect it to be and is consistently bad no matter how much you complain, it may be time to move to a friendlier insurance company.

Drop Your Insurance over Discounts

Good driver, multi-car, multi policy and good student discounts are just some of the car insurance discounts available out there to decrease your insurance policy. If you are not sure if you have these discounts, talk to your agent.

Now, if your insurance company does not offer any discounts or says that they offer them and fails to provide them for you, this is when to drop car insurance.  Insurance companies are in the business to make money, but if they are doing so at your expense they do not deserve your money.

Drop Your Insurance When They Fail to Deliver

You purchase car insurance for one reason and one reason only, to be covered in the event of an accident. If you have had an accident and your insurance company does not follow through on its end of your mutual binding contract, this is how you know when to drop car insurance. But, don’t drop it until you have fought your insurance company and got your claim paid (if it is a valid claim).  If you need help contact you state’s Insurance Commissioner and file a complaint.

Once the issue has been resolved, find a new insurance company and drop the old one as quick as you can.

When Your Auto Insurance Drops You

Written by Michele Wilmonen. Posted in Research Last Updated: 04/05/2011

Why insurance companies drop clients, what you can do if you are dropped and when it is just time to go to a different company.

Young insured getting a insurance being dropped letter

The bad news of cancelled insurance usually comes from a letter.

The jaw drop is a classic reaction to the letter that you are currently reading in your hand right now. The letter is from your insurance company and they have decided to not renew your policy. You may have had too many accidents, too many tickets or any number of reasons could be listed on that letter.

So what do you do when your auto insurance drops you?

Why Insurance Companies Drop Clients

When we talk about insurance companies dropping a client it is not in regards to your policy being cancelled because you didn’t pay your premium. A client that has been dropped by an insurance company gets a letter from the company that something has changed about the client or their driving record that the company doesn’t like and now they no longer wish to insure them.

The most common reasons for a client being dropped is too many accidents or too many points on their driving record from citations and accidents. Other reasons can be your credit score has become too low, there are too many high risk drivers in your home or you have been late paying your bill too many times.

What Can You Do if You are Dropped

If you get a letter from your insurance company that they are dropping you, read the letter very carefully to find out why. Then call the insurance company to speak to them about the reason. If they are dropping you because of too many accidents, request that they tell you exactly what they found on your CLUE report. The CLUE report is the report that insurance companies use to verify the number of and nature of accidents that someone has been in. CLUE reports are notorious for being wrong so make sure that they are dropping you based on correct information. If the information on your CLUE report is wrong, you will have to contact the company that submitted the information.

A letter stating that you have too many points on your driving record also needs to be verified to make sure that the citations and points on the record are correct. If they are not, contact the DMV that reported the information to your record. No matter the reason always verify that the insurance company is dropping you based on accurate information.

Moving On After Being Dropped

After checking to make sure that all of your information is correct and that there is nothing left to be done to stop from being dropped, it’s time to move on. Start calling around to your local insurance agencies to get quotes and also to insurance companies directly – or get quotes on our website.

Be honest as to why you are looking for new insurance and as to what is on your record. These new companies are going to pull up the same reports that your old company pulled up when they dropped you so there is no use in hiding information.

You will find that each insurance company has different criteria that they insure people under and your new company may be a little more forgiving than your last one.

2017 Auto Insurance Rates by State (updated)

Written by Michele Wilmonen. Posted in Rates, Research Last Updated: 08/13/2017

How the crime rates, number of uninsured motorists and the weather in your state can determine your auto insurance premiums – plus car insurance rates by state.

Moving this car to a different state will change its insurance premium

This vehicle will see a change in its insurance premium if it moves from one state to another.

The price of auto insurance is determined by many different factors. It can go up or down depending on your age, driving record, credit score, the type of car you drive and also your gender. But, did you know that how much you pay for car insurance also depends on where you live?

When an insurance company sends a request for the base premium for a state or specific area to the state Insurance Commissioner, they are using the statistics of claims filed or potential for claims being filed in a location. They want to make sure that they are not going to pay out more in claims payments then they are going to be collecting in premium. So if a certain location has a higher chance of having a claim, they want to make sure that they are charging a high enough premium.

Crime Rates

The crime rate in your state can have an impact on your insurance premium, specifically car thefts and vandalism. If you live in a state where you have a higher chance of getting your car stolen or damaged, the higher your insurance premiums will be to offset the claim payout of having to fix or replace your vehicle.

Liberal Monetary Awards

We have all see commercials for personal injury lawyers advertising their services to obtain financial compensation for those that have been injured in an accident. The high awards that these lawyers get for their clients end up increasing the premiums for everyone.

In the states that have judges that award higher monetary compensation and also have more lawyers advertising their services to help obtain these high awards, like Louisiana, they see the highest premium increases due to this factor.

Weather

You never know when Mother Nature is going to get ugly and cause damage. Statistically there are states, such as Oklahoma, that have a higher chance of seeing this happen than others and insurance companies keep track. States that are in “tornado alley”, flood prone states and severe weather states all have their premiums increased to compensate for the likelihood of a weather related claim.

Uninsured Drivers

Even though there are laws protecting those of us that are insured from them, uninsured drivers are everywhere. Not only are they a higher danger to us on the road, they are also one of the causes of our increased auto premiums. Because a driver that is not insured has no insurance company to pay for the damages that they cause, the victim’s uninsured motorist or collision coverage has to pick up the bill. This uncompensated claim payout then is spread out through all of that insurance companies customers for them to pay for in the form of higher premiums. Statistically some states have higher numbers of uninsured motorists driving up insurance premiums.

State by State Case (2017 updated)

While the insurance premiums can even vary within a specific state due to all of the above factors, there isn’t the room or the time to cover every single town and city across the nation. So instead we have provided the chart below for you to compare where your state stands in average premium rates.

National average $1,318
1 Michigan $2,394
2 Louisiana $1,921
3 Connecticut $1,897
4 Rhode Island $1,848
5 Florida $1,840
6 DC $1,696
7 California $1,673
8 Wyoming $1,538
9 Delaware $1,526
10 Texas $1,506
11 Oklahoma $1,476
12 Georgia $1,440
13 Arkansas $1,409
14 New Jersey $1,375
15 West Virginia $1,369
16 Kentucky $1,365
17 New York $1,352
18 Colorado $1,351
19 Arizona $1,348
20 Nevada $1,342
21 Maryland $1,327
22 Mississippi $1,326
23 Pennsylvania $1,313
24 Oregon $1,308
25 Hawaii $1,294
26 North Dakota $1,291
27 South Carolina $1,286
28 Massachusetts $1,242
29 Minnesota $1,241
30 Alabama $1,226
31 Montana $1,217
32 Washington $1,216
33 New Mexico $1,201
34 Kansas $1,192
35 Tennessee $1,186
36 Illinois $1,159
37 Wisconsin $1,154
38 Alaska $1,132
39 New Hampshire $1,124
40 Nebraska $1,112
41 Missouri $1,107
42 Utah $1,068
43 South Dakota $1,058
44 Virginia $1,040
45 Indiana $1,021
46 Iowa $1,017
47 North Carolina $1,010
48 Vermont $948
49 Idaho $942
50 Ohio $919
51 Maine $864

 

Most Expensive States , Least Expensive States (2011 data)

Most Expensive States

1. Michigan, $2,541

2. Louisiana, $2,453

3. Oklahoma, $2,197

4. Montana, $2,190

5. Washington, D.C., $2,146

6. California, $1,991

7. Mississippi, $1,896

8. New Mexico, $1,896

9. Arkansas, $1,836

10. Maryland, $1,807

11. North Dakota, $1,794

12. Connecticut, $1,786

13. Rhode Island, $1,747

14. Wyoming, $1,714

15. Hawaii, $1,707

16. South Dakota, $1,707

17. Georgia, $1,670

18. New Jersey, $1,663

19. West Virginia, $1,633

20. Kentucky, $1,629

21. New York, $1,627

22. Minnesota, $1,614

23. Washington, $1,584

24. Missouri, $1,563

25. Indiana, $1,518

26. Colorado, $1,508

Least Expensive States

1. Vermont, $995

2. South Carolina, $1,095

3. Maine, $1,126

4. Wisconsin, $1,128

5. Tennessee, $1,146

6. Ohio, $1,152

7. North Carolina, $1,154

8. Iowa, $1,179

9. Virginia, $1,237

10. Utah, $1,272

11. Arizona, $1,280

12. Illinois, $1,290

13. Nevada, $1,300

14. Oregon, $1,306

15. Alabama, $1,306

16. Idaho, $1,325

17. Massachusetts, $1,328

18. New Hampshire, $1,334

19. Alaska, $1,454

20. Kansas, $1,461

21. Pennsylvania, $1,468

22. Nebraska, $1,470

23. Florida, $1,476

24. Delaware, $1,489

25. Texas, $1,492

Data courtesy of Insure.com

How to Cancel Auto Insurance

Written by Michele Wilmonen. Posted in Research Last Updated: 03/27/2011

What you need to do before you cancel your auto insurance, dealing with the left over billing and finally cancelling your policy.

A Cancelled Policy

Before cancelling your old policy, get new coverage in place.

Regardless of how long you have been with an insurance company, there comes a time that it is just better to say goodbye and to part ways. It could be because you are tired of paying such high insurance premiums.

It’s possible that the customer service you have had to deal with recently is not exactly friendly. No matter what your reason may be, you are not obligated to stay with your insurance company. But, before you cancel your policy for greener insurance pastures, there are certain steps in how to cancel auto insurance.

Shop Around Before you Cancel

If you are getting ready to blow a fuse due to the conversation that you are in the middle of with one of your insurance company’s rude call center agents, summon all of the strength you have left and refrain from yelling out, “Cancel my policy right now!” Instead calmly finish the conversation, hang up the phone and immediately start shopping around for a new policy.

Have a copy of your policy in front of you so that when you are getting quotes you can make sure that you are getting the price for the same exact coverage that you have now. If you don’t know your coverages, you may be getting a cheaper quote from a different company because they are quoting for less coverage. Also ask around to friends to see who they are insured with and find out what their customer service and claims experience have been like with their companies.

Settle the Billing Before you Cancel

Go back to your insurance company or agency and find out how your billing is set up.  If you are a “full pay” customer, you are paid in full until your policy comes up for renewal. If you are on a “two pay plan” or a “monthly payment plan” your insurance could be paid up to any date of your current policy term. If your insurance company or agent cannot tell you exactly what day you are paid up until; at least find out if you are paying ahead or behind on your policy.

Knowing when you are paid up until will help you decide when to cancel your insurance policy. You can opt to have the new policy start when the old policy expires instead of renewing it or if you want to leave the company right now, knowing that you are paying behind will prepare you for getting a bill for coverage up to your cancellation date.

Replacing Coverage Before Cancelling

Go back to the new insurance company that you decided to go with and purchase your new policy. You have now decided when you want it to start and you are ready to get it in place. This is a very important step as most states will track when you have cancelled your insurance and you can be fined or lose your license if you don’t get a policy to replace the one you have. By doing this all in advance you will save yourself the trouble of any of this happen.

Finally Cancelling Auto Insurance

Once your new policy is in place, contact your old insurance company and let them know that you want to cancel your policy and when. Most companies will cancel your policy for you over the phone, but some will require that you visit your insurance agent and sign cancellation papers. No matter what they require, just follow the directions that they give you and move on. It’s that simple.

Full Coverage on an Old Car

Written by Michele Wilmonen. Posted in Research Last Updated: 03/21/2011

What is the definition of “full coverage”, should you drop it on an old car and what old cars should you drop it from.

An Old Car Past its Prime

It would be a good idea NOT to carry full coverage on this hunk of metal.

Sometimes there are investments that you make that are just not financially sound and having full coverage on an old car may be one of them.  Cars start losing their value as soon as you drive them off of the lot and the value just continues to decline from there.

There is a point in a car’s life that the cost to repair any damages that may happen to it actually exceeds the worth of the vehicle itself and when a car gets that old it may be time to stop paying for full insurance coverage.

What do you Mean “Full Coverage”?

When you hear people in the insurance industry talking about “full coverage” what they are talking about is the combination of your liability coverage and the property damage coverage for your own vehicle (comprehensive and collision).  So when some someone tells you that it may be not worth having full coverage on your old vehicle, they mean that it may not be worth having the Comprehensive and Collision coverage.  They are not telling you to cancel your whole insurance policy as you still need your Liability insurance no matter how old your vehicle may be.

Why Should I Drop Full Coverage?

When a vehicle is in a car accident the insurance company will compare the value of the vehicle to the amount of money it will cost to repair the damages to the vehicle.  If the cost of the damages exceeds a certain percentage of the value of the vehicle the insurance company will deem the vehicle a total loss and will pay you for the value of the vehicle. No matter how much you pay in insurance premiums for your vehicle the insurance company will never pay out more than the value of your vehicle (don’t forget they also subtract your deductible from this amount).

So if the value of your old vehicle is not very much, you need to sit down and compare how much you are paying in insurance premiums to keep Comprehensive and Collision coverage on you vehicle, to how much your vehicle is worth.

If the premiums exceed the value of your vehicle it may be a better financial decision for you to drop the full coverage and put what you would be paying for that premium in a savings account.  Then if you are ever in an accident you will have cash set aside to pay for the damages to your vehicle or for a down payment on a new car if your old vehicle is totaled.

By putting what you would be paying in premiums into a savings account, you are not only saving more money by keeping it instead of paying an insurance company more in premiums than what they are going to pay out for your vehicle, you will also be earning interest on this money.

Should Full Coverage be Dropped on All Old Vehicles?

Short answer: no. Full coverage should not be dropped on all old vehicles.  The age of the vehicle should not be the reason that you drop full coverage on a vehicle, but the value of the vehicle should be.   The reason that people refer to old cars not needing full coverage is that as the older a vehicle gets the less that it is worth.

The exception to this is classic cars.  Classic cars are vehicles that are so old that people start collecting them and restoring them back to the point that the vehicles value is increased.  These types of cars need to have full coverage on them to protect the money that has been invested in their restoration.

What Happens if I Drop Full Coverage on my Old Car?

If you drop full coverage on your vehicle your insurance company will not pay for any damages that you may have to your vehicle in the case of an accident.  This also includes damages caused by hitting an deer or any damages to your windshield as you will also no longer have Comprehensive coverage.

This means that you will have to pay for the damages out of your pocket and if you didn’t put aside the money that you had saved from dropping the full coverage on your vehicle, you may have to drive around a damaged vehicle or be completely without a vehicle if the car was totaled.

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