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Import Auto Insurance for Your Foreign Car

Written by Todd Clay. Posted in Research Last Updated: 02/21/2011

What foreign cars need import auto insurance, why the premium is so high and how you can bring that premium down.

A red Italian car

A foreign car like this needs special insurance in the U.S.

When we watch movies that are set in other countries, depending on the type of movie, the cars look sleek and sporty or they look funny and interesting to drive.

But, trying to get import car insurance for a foreign vehicle that you have managed to buy and get to the United States can be anything but fun.  Insurance companies have special markets for import cars and some companies won’t insure them at all.  Don’t give up on your dream of owning an import – there are ways to get them insured.

What Foreign Cars Need Import Auto Insurance

Import auto insurance may be needed on any car that you have brought into the United States from a different country.  This does not include what people normally think as import cars, that you can buy on a U.S. car lot from Toyota, Hyundai or Honda.  While these are import names, they do not meet the specifications of being an import car.  In fact, some of these import names have plants here in the United States where they make the vehicles that we drive here.

Import autos are the ones that you have brought over or are from another country and do not have to meet the same specifications as vehicles in the United States do before they are sold.  These specifications are along the lines of safety equipment that is required by law in the United States, emissions and that the speedometer shows speed in MPH in addition to kilometers.  The largest difference in import cars from most countries is that the steering wheel is located on the left hand side of the vehicle instead of the right side that is standard in the United States.

Why is Import Auto Insurance so High?

Import auto insurance is expensive because of the vehicle itself.  Import vehicles generally do not have parts available here in the United States making it expensive for an insurance company to repair if it was ever in an accident.   Also, because the import does not fall into the same category as all other domestic vehicles, it requires a specialized policy where the policy is centered on the individual value of the vehicle, similar to a collector car policy.

The rate for an import car also depends on the type of import that you choose to purchase.  For example, an imported sports car is going to be much more expensive than a small import that you purchased for the excellent gas mileage.

Keeping Import Auto Insurance Premium Reasonable

  • Get quotes on the insurance before you buy your import.
  • Make sure that the import is modified to legally drive on the road in the U.S.
  • Install car alarms and lock your car in a secure area when not in use.
  • See if the insurance company will insure the vehicle as a collector car if you don’t drive it all the time.
  • Ask your current insurance company if they offer import insurance so you can keep your longevity discounts.
  • Shop around to different companies to see if they even offer import insurance and to get the rates of the ones that do.

Over 50 Car Insurance

Written by Todd Clay. Posted in Research Last Updated: 02/20/2011

The good and the bad of over 50 auto insurance and how to take the bite out of increasing premiums.

Over 50 couple enjoying a drive

Over 50 doesn't mean the end of fun driving.

Life changes after 50. You’re getting closer to retirement (if you aren’t there already), your body is aging and your insurance is about to go through some changes of its own.

While the early years after 50 bring lower premiums, you will find that this is only for a short period of time.  The higher your age gets the higher your over 50 car insurance is going to start getting.  But, there are steps that you can take to slow down this premium increase.

The good news and bad news about over 50 auto insurance

The older a driver gets the more experience they obtain being behind the wheel.  For most, unsafe driving is a thing of the long-ago past and insurance companies reward you with lower rates as you age past your 50’s.

However, over 50 auto insurance does not continue to be a good thing as you reach further and further beyond your 50th birthday.  As you get older, your senses deteriorate and your reflexes slow. Insurance companies know from the statistics that this also makes your driving not as safe.  This is not due to any fault of your own, it is just your body getting older and you do not react as quickly to different situations on the road as you did when you were younger.

Unfortunately, this also gives insurance companies a reason to increase your auto insurance premiums and the older you get the further down the safe driver categories you will fall.  You finally fall so far down that you are rated no higher than a new teenage driver and are considered a high risk.

Decreasing Your Over 50 Insurance Premium

Just because you now have auto insurance doesn’t mean that you have to stay with the rates that your current company is charging you.  If you are not happy with your premium contact your agent or company and see if there is anything they can change or update for you to decrease your premium.  If they are still not able to decrease your rates or are unwilling to work with you, it is time to start shopping around with other insurance companies.

Start with companies that specialize in servicing seniors. Companies like AARP may be able to offer a better deal.  Also if you are computer savvy, don’t forget about the additional discounts some companies offer if you purchase their instant car insurance online.

Additional ways to save on over 50 auto insurance

  • Combine all of your insurance needs with one company for the multi-policy/multi-car discounts.
  • If you drive a collector car, look into restricted collector car insurance.
  • If you are retired and don’t drive as much, make sure that your insurance has your annual mileage listed correctly.
  • If you store your car for a long snow bird vacation, see if your insurance company can drop your coverage to comprehensive only while it is in storage.
  • Take a senior safety driving course.

Where Your Auto Insurance Premium Dollar Goes

Written by W. Lane Startin. Posted in Research Last Updated: 02/15/2011

Where your premium dollar goes, who does what with it, and why large cash reserves are important to auto insurance companies.

Here at Car Insurance Guidebook, we followed the money...that is your premium dollars.

Auto insurance, it’s part of most people’s monthly bills. Most people pay that insurance bill without giving it a second thought. But what if you did? What if you asked yourself where that money actually goes, and what does it do?

It just so happens we asked the same question.

The following is a generalized discussion of where your premium dollar goes at an auto insurance company. Please remember exact figures vary from company to company, but most follow this formula fairly closely.

The Agent’s Cut

Around 10 percent of your car insurance premium goes to your insurance agent as commission. Agents typically get higher commissions for new business and lower commissions for renewals, but when it averages out it comes out to right around 10 percent with most companies.

Agents are almost always contractors with the insurance company, rarely employees. They are therefore responsible for paying for much if not all of their overhead with this commission. In other words if you like your agent, by all means stick with him or her. That agent sees a direct benefit from your loyalty at least once a year.

But what if you bought your policy online and you don’t have an agent? Well, then that 10 percent either goes back to you as savings, to web sites for referral fees, back to the company, for something else, or a combination of any of the above. Check to see if getting auto insurance through an agent is really that much more. If not, it may be in your interest to have a human on your side rather than a computer.

Keeping the Lights On

Around 25 percent of your insurance premium goes to the insurance company itself to account for its day to day operating expenses. This includes salaries for executives, front office staff and other employees such as claims adjusters. It also includes other overhead such as front office utilities, company fleet vehicle maintenance, and something called “re-insurance,” which is effectively insurance for insurance companies. Pretty much everything the company does except for one very important function falls under this category.

All They “Claim” to Be

That leaves us with around 65 percent left of your premium dollar. Where does that go? Well, what is the most important function of any auto insurance company? Indeed, what is the main reason an auto insurance company exists in the first place? That’s right. To pay for claims!

Like all insurance companies, auto insurance companies are required by state law to keep substantial amounts of cash on hand in what are called “loss reserves” so that they can pay any and all legitimate claims that come their way in a timely manner. In fact, when insurance companies do go into state receivership, failing to comply with this rule is by far the most common reason.

Even for small, regional companies, required loss reserves can easily run in the tens of millions of dollars. Despite that, many companies keep loss reserves well in excess of state requirements to prove financial security with independent agencies such as A. M. Best and others. Suffice it to say, auto insurers take loss reserves very seriously – thus the large amount of your premium dollar they apply to them.

Performance Car Insurance and the Car Lover

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

What cars need performance car insurance, the options available and what you can do to increase your odds of getting coverage.

Performance Car Insurance and the More Powerful Engine

The potential for dangerous speeds is why performance cars are hard to insure.

It is said that Americans have a love affair with vehicles. And there is usually none more desired than the elusive performance car.

We love the look, the smooth feel of the body and the way our heart beat resets itself when the engine is revved.

But, what cars actually qualify as being labeled as a performance car and with how expensive these cars are, how does the owner make  sure that they have performance car insurance?

What Cars Need Performance Car Insurance

Cars that qualify as a performance cars all have one thing in common, a high performance engine.  So if you have a car that is all souped-up on the outside, has a killer paint job and modifications to the body, but the engine belongs in a station wagon…you don’t have a performance car.

Performance cars have high horsepower engines (more so than a normal car), possible super or turbo chargers, can rev higher than a normal car and has specialized braking and suspension installed to handle the higher performance engine.

Performance Car Insurance Options

Insurance companies have a love-hate relationship with these cars.  They love it because it brings them the prestige of saying that they insure a higher class of car and also the premiums that a performance car can possible bring in for them.  On the other hand they hate them because if they have to pay out on a performance car claim, it is going to be exponentially higher than a claim that involved a regular vehicle.

Because of this insurance companies usually take one of two routes with performance car insurance.  One, the owner has the option to insure the vehicle the same way a classic car is insured.  This means that they have a cap on how much mileage can be put on the vehicle over the course of the year and the vehicle has to be kept in locked storage when not in use.

Two, the high performance vehicle is insured in a high risk market.  This doesn’t mean that the driver is a bad risk like most of the other drivers in this market are.  It just means that the insurance company feels that insuring a high performance vehicle, due to the high expense it would incur if damaged, is a high risk for them and they require a higher premium to be able to insure it.

Avoiding Roadblocks to Getting Performance Car Insurance

A performance car owner can do a number of things to make themselves more attractive to insure and also possibly keep their premiums at a decent level at the same time.

  • Wait to buy a performance car until you are 30 or older – the older more mature driver is a safer insurance risk for a company to take.
  • Make sure that your performance car is street legal- this means all safety equipment such as headlights, windshield wipers, a horn, etc., are all installed.
  • Don’t add modifications that an insurance company cannot inexpensively replace if damaged- consult an insurance agent with the list of modifications you have added to your vehicle when getting a quote.  Some modifications will automatically get you an insurance denial by some companies.
  • Keep your driving record clean
  • Install an anti-theft device

All of these precautions may make insuring a performance car a little less costly when the insurance bill comes due.

Military Car Insurance: Helping Those Devoted to Protecting Us

Written by Todd Clay. Posted in Research Last Updated: 02/12/2011

What you need to qualify for military car insurance, who provides it, and why you should look into it.

Military Family Together

Military car insurance is needed to protect the whole family.

Military car insurance is a way for insurance companies to support those that are in the armed forces by making at least their insurance needs a little easier to deal with.

It can come in the form of discounts on the insurance premium, special coverage adjustments for when active members are deployed or even whole companies devoted to the insurance needs of military members.

Requirements to Qualify for Military Car Insurance

The qualifications for military car insurance vary depending on the company that you are looking at going with.  Being active duty military is the only military status that is a guaranteed acceptance across the board at all companies.  Most companies also accept spouses, retired military and minor children of active duty military that are of driving age.  Other companies accept adult children whose parents are already signed up with them for insurance or have been in the past while the parents were active duty.

There are even companies that will allow you the military car insurance and all of the benefits that go along with it as long as you are affiliated in some way or a member of an organization affiliated with the armed services, such as a credit union.  But, to quality for military car insurance by affiliation is not as common.  It is best to talk to the company that you are getting insurance quotes from to find out what their specific requirements are.

Who Provides Military Car Insurance

Military car insurance is provided in two ways.  One, by companies completely devoted to the military personnel and their family’s needs, such as USAA and Armed Forces Insurance (AFI).  These companies provide more than just car insurance also so you can bundle all of your insurance policies together with one company.

The second way to obtain military car insurance is through a regular insurance company that is in business.  Usually the policy is written as a normal policy that is available to everyone that drives, but includes the military discount rate for the premiums.

Benefits of Military Car Insurance

The most common benefit that comes with military car insurance is that you will receive a discount on your insurance premiums.  This discount varies from company to company, but can be as large as 15%.

Other benefits can range from a special customer service number being available 24 hours a day for military personnel deployed around the world in other time zones and being able to easily change coverage on your vehicle to comprehensive only while it is in storage during a deployment.

Things to Keep in Mind about Military Car Insurance

  • Always shop around for your car insurance to get find the best rates for the coverage you need. On top of that, talk to other people that you know in the service about who they are covered with.  They can tell you not only who they found had the best rates, but also which company was the easiest to deal with when they needed help with a claim or when they needed assistance with their policy while they were deployed overseas.
  • If you decide to go with a company that does not deal exclusively with military personnel, don’t forget to tell them that you are or were in the military.  If you don’t let them know, they don’t know to apply any discounts or benefits that you may be entitled to.
  • If you are unmarried and are active duty, you need to have a power of attorney in place and filed with your insurance company.  That way if you are overseas and something happens, the person that you have as power of attorney can take care of your insurance without any problems from the insurance company.

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