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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.

Does Car Insurance Cover Hitting A Deer?

Written by Michele Wilmonen. Posted in Research Last Updated: 08/21/2012

What to do after hitting a deer, car insurance coverage that fixes the damage, and how to prevent it in the first place.

Deer Running from Oncoming Car

Comprehensive coverage will repair the damages to your car if you hit this deer.

Between 2005 and 2008 the National Highway Traffic Safety Administration estimated that there were about 275,000 accidents in the United States that involved a vehicle hitting a deer.

Deer are fast and are easily hidden in the trees so they are hard to see until you are just about to come in contact with them.  So if you do hit a deer what do you do and is there any way of preventing it from happening in the first place?

Or more importantly, does car insurance cover hitting a deer?

What to do After Hitting a Deer

Once you have hit the deer pull over to the side of the road to make sure that everyone in your vehicle is okay and then call 911. Do not try to move the deer out of road or you could be hit by a car yourself. You also never know when a deer is actually dead or just stunned and if you try to move them and they are only stunned they may end up injuring you if they wake up.

Never take the deer home with you!  This is considered poaching in most states, especially if you do not have a hunting license and it is not deer season.  If you want to take the deer home as a trophy and are caught you will be slapped with a huge fine, lose your hunting privileges and Fish and Game will seize your trophy.  It’s just not worth the risk.

What Insurance Covers Hitting a Deer

Even though you have had a “collision” with a deer it is actually your comprehensive insurance that will cover the damages to your vehicle, not your Collision coverage. This is good news for most as this also means that you will only have to pay your Comprehensive deductible and most people carry a lower Comprehensive deductible than they do Collision deductible. Other coverages may also be available for you in this case, like towing and rental car coverage, but only if you purchased these coverages on your policy in advance.

Tips to Decrease your Chances of Hitting a Deer

An accident involving hitting a deer is just something cannot be avoided most times, but here are some ideas that may at least decrease your chances of hitting one:

  • If you can, do not drive after sunset.  Deer are out in the highest numbers at night.  Also combine this with the interference in vision from the setting sun and the lack of light at night and your chance of getting into an accident with a deer increases.
  • Don’t assume that it is only the one deer.  Most deer travel in herds so keep on the lookout for more.
  • If a deer is running alongside your vehicle, get in front of it to prevent it from having the chance to jump out on the road in front of you.
  • If the vehicles in front of you are slowing down keep an eye out for what they are slowing down for.

Hit and Run Insurance

Written by Michele Wilmonen. Posted in Research Last Updated: 03/20/2011

What covers a hit and run accident on your insurance policy, and steps to take if you’re a victim in a hit-and-run accident.

Hit and Run Insurance Needed for Damage Done to This Car
The not-at-fault party is often left paying the damages because of a hit and run driver.

If you look at your insurance policy carefully there are no coverages that actually say “hit and run insurance”, this is because there is no insurance coverage available that exclusively covers hit and run accidents.  The damages caused by a hit and run accident are instead covered under either your collision coverage or, if you purchased it, your Uninsured Motorist coverage.

Hit and Run Uninsured Motorist Coverage

If you are in a Hit and Run accident, Uninsured Motorist coverage covers damages to your vehicle and also bodily injury done by uninsured drivers, underinsured drivers and hit and run drivers.  This coverage is an optional coverage on an insurance policy in most states so don’t assume that you have it on your policy.  Uninsured Motorist coverage also has limits on how much they will pay out for damages to your vehicle and may not cover the total cost of repairs.

Talk to your insurance agent if you feel that you need to have this coverage and also to find out what exactly your insurance company covers under this coverage.

Hit and Run Collision Coverage

Your Collision coverage acts as your safety net in the case that you do not have Uninsured Motorist coverage on your policy and are in a hit and run accident.  You purchased Collision coverage to protect you from having to pay out a lot of money to fix your vehicle if it was damaged and now after all the of the premiums that you have paid, the coverage will kick in to do what it was purchased for.  This doesn’t mean that nothing more will come out of your pocket though.

In the case that the other party cannot be identified, the insurance company is not going to be able to recoup any of the money that they are going to be paying for the damages to your vehicle so you will be responsible for part of that cost in the form of your Collision coverage deductible.  If the at-fault party is later identified, the insurance company will include the amount that you paid out of pocket for your deductible in the recovery amount that they pursue the other party for.

If you are the one that caused the accident and are later found after you leave the scene of the accident, the damages of your vehicle will also be covered under your collision coverage.  The damages to the other party’s vehicle will be covered under your liability insurance, just like it would for any other accident.  The difference with a hit and run accident caused by you is the legal issues you will have from the criminal charges that will be filed for leaving the scene.   In addition, both your driving record and your insurance record will be marked with a Hit and Run accident.

Identifying a Hit and Run Driver

  • Call 911 immediately after an accident and describe the fleeing vehicle to the dispatcher and which way the vehicle fled.
  • Write down the other person’s license plate number.
  • If you have a camera within reach take as many pictures of the other vehicle that you can as it leaves the scene.
  • If you do not have a camera, write down every little detail that you can remember of the car and the driver.  If you wait until later your memory is not as good and you may not remember an important detail or your brain will fill in details of its own that are not true.
  • Always file a police report in the case of a hit and run accident.  This will protect you legally and once provided to the insurance company will keep the accident from getting listed as an at-fault accident on your record.

When to Drop Car Insurance

Written by W. Lane Startin. Posted in Research Last Updated: 03/09/2011

How to drop car insurance, dropping a car you’re no longer driving, switching companies, and what to do if there’s a problem.

When this happens, it's time to drop your car insurance.

Much is written on how to get car insurance in the most expensive manner possible. However, little is out there on when to drop car insurance, and how to do it.

It’s a relatively simple process, but it’s not always straightforward. The most important part about dropping car insurance is to keep good records.

How to Drop Car insurance

Logically, the main reason to drop car insurance is when you’re no longer driving the car in question. This can be for any number of reasons including you’ve sold or otherwise transferred ownership of the car, if the car is no longer driveable due to a prior accident. The other reason to drop car insurance is if you’re switching companies. What you don’t want to do is simply assume your insurance will cancel itself. You have to be proactive.

Car insurance is typically paid 30 to 45 days in advance. By simply letting your coverage lapse, you’re effectively covering a car you’re not driving for that period of time. Regardless of whether you have a personal or commercial policy, you want to let your agent and company know of the change ASAP.

Dropping Insurance on a Car You’re No Longer Driving

When dropping car insurance, make sure you inform your agent of the make, model and VIN of the car in question so it matches up with his or her records. Tell them the exact date you wish to no longer cover the car as well so you can be refunded correctly. Agents add and drop vehicles all the time, so don’t feel like you’re putting them out with your request — after all, it’s their job.

If your car is totaled in an accident it may (and should be) be dropped automatically, but don’t simply assume it is. Consult with your agent to be sure. Also make sure that any other vehicles you have stay on the policy. It’s a good idea to review your coverages periodically even if you don’t have any problems or changes.

Changing Companies

In an instance where recent car insurance advertising campaigns actually speak the whole truth, car insurance indeed does not have to be canceled at renewal. You have the right to cancel at any time for any reason or for no reason at all. To that end if you find a better deal, there’s no reason not to go for it.

Canceling mid-term can be a bit messy, however. You won’t get a refund on your unpaid premium from your old company right away, but your new company will expect its startup premium right away. Be sure you have enough to compensate for this

If You Have Problems

If you find your agent is unresponsive to your car insurance cancellation requests you can contact the company directly. If necessary you can fill out the consumer sections of an “Acord Cancellation Request/Policy Release” form and present it to the company. This form is a generic insurance cancellation form all companies and most agents are familiar with. Failing that, you should take the matter to your state insurance commission, however that should be an extremely rare occurrence.

What Makes Auto Insurance Go Up

Written by Todd Clay. Posted in Research Last Updated: 03/07/2011

The drivers and vehicles listed on your policy, new driving statistics, and other things will affect your auto insurance rates.

What Makes Auto Insurance Go Up and More Money out of your Pocket

Certain changes to your auto insurance will mean more money paid by you

People already don’t like paying their insurance premium so when something happens to make that premium increase it makes it all that much worse.  There are many different things that you can do to try and keep your premiums down as low as possible, but let’s take a look at some of the things of what makes auto insurance go up in the first place.

Drivers Make Your Auto Insurance Go Up

The drivers on your policy and their driving records play a big part in the premiums that you pay for your insurance.  Any negative changes such as an at-fault accident or traffic violations added to these records can make your auto insurance go up.   Once a driver reaches a certain age (sometimes even over 50), they are considered an increased driving risk and will cause an increase in insurance premiums.

Drivers being added to your policy can also increase your premium.  Added drivers mean addition time that your vehicles will be on the road exposed to a potential accident, it also means that you will most likely be adding a new car for that new driver, which also will increase your premiums.

But, the steepest increase that you will see in your insurance premium is when you add a new teen driver.  These drivers are inexperienced and are still learning how to be a responsible adult behind the wheel.  They are also the driving group that has the highest number of accidents per year and insurance companies charge high premiums for them to try and collect as much money as possible to cover the accident that they will most likely have.

Vehicles Make Your Auto Insurance Go Up

Adding a new vehicle to your policy will increase your premiums if one of two factors exists.  One, you are adding a vehicle to your life instead of replacing an old one.  Even with a multi-car discount the premium will still increase due to the additional risk that has been added to your insurance policy.

Two, the new vehicle that you now have is newer and/or more expensive than the one you are trading in for it.  New and more expensive vehicles generally cost more to fix and the insurance company wants to make sure that the premium that they collect is appropriate compared to the cost of repair in the case of an accident.

Statistics Make Your Auto Insurance Go Up

Insurance companies are all about the statistics.  Which driving group is statistically more likely to have an accident?  What vehicle statistically causes more damage when in an accident?  So when new statistics come out that a driving group or a vehicle was a higher risk than first thought, insurance companies adjust rates.  What this means to you is that if you are one of those drivers or own one of those vehicles, you will see an increase in your premium at your next renewal.

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