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Understanding Insurability

Written by W. Lane Startin. Posted in Definitions, Research Last Updated: 08/04/2011

What insurability is, how it’s determined for both the vehicle and the driver, and the differences in insurability from company to company.

Insurability for a Sports Car

Check with your agent to make sure this baby is insurable.

As part of the larger property and casualty line of insurance products, auto insurance shares some basic characteristics with other forms of insurance. One of these characteristics is insurability.

What is insurability, and how does it impact you the auto insurance consumer?

At a basic level, if an insurance company deems a certain risk to be acceptable to its business, it is considered insurable. Otherwise, the risk is considered uninsurable and therefore ineligible for coverage.

This is true regardless of whether you’re talking about auto insurance, homeowner’s insurance, life insurance or any other line of insurance you care to name.

When it comes to auto insurance, insurability is dependent on two factors: the auto and the driver. Both must be deemed insurable before an auto insurance policy can be written. This is accomplished in the underwriting process.

Insuring the Auto Itself

With most auto insurance companies, the auto meets insurability requirements if it is built by a recognized manufacturer and has a vehicle identification number, or VIN. This includes the vast majority of cars on the road today. Autos that do not meet insurability requirements with most standard companies typically include kit cars, exotic sport cars and models with particularly poor safety ratings. Your insurance agent will be able to tell you if your vehicle meets insurability requirements, but barring unusual circumstances you’re probably in good shape.

Model year does not have much of an effect on insurability itself, but it does have an impact on overall premium. For the most part, newer vehicles cost more to insure than older vehicles all other things equal.

Trailers and RVs are subject to similar insurability requirements, but remember that it is not possible to insure a trailer for full coverage. You can only get comprehensive and collision with them.

Insurability on the Driver

From an insurance carrier’s standpoint determining insurability on the vehicle itself is pretty easy. It’s either insurable or it’s not. Determining insurability on the driver, however, takes many variables into consideration. These include age, sex, marital status, driving history and past insurance history.

Further, if a vehicle is driven by multiple drivers then all drivers must be considered for insurability. Generally speaking, auto insurance on a vehicle is rated for the highest risk driver in any given group of drivers. This is why teenage drivers can cause their parents’ insurance premiums to dramatically increase.

Driver insurability is periodically reviewed by the company, and a driver may be dropped by the company if he or she no longer meets the company’s insurability requirements. Remember an insurance company can only drop a driver at renewal, so you may have time to shop around for a new policy if you find yourself uninsurable with your current company.

Driver insurability on commercial auto insurance policies takes into consideration a slightly different set of criteria. For example, drivers under 25 or over 74 are often deemed uninsurable on commercial policies regardless of other circumstances.

Insurability is Not Uniform

If your vehicle and/or you do not meet insurability requirements with one company, don’t fret. One company’s definition of insurability is always at least slightly different than another’s. Chances are there is a company out there that will take you. While many standard auto insurance companies shy away from kit cars and sports cars, there are other auto insurance carriers that specialize in them. Your agent may have access to one of these companies through a brokerage.

If a standard insurance company says you’re uninsurable, a non-standard or high risk company will probably take you instead. You might have to get an SR-22 or join an assigned risk pool to get insured, but auto insurance is available for just about anyone driving just about anything.

The Best (and Worst) Insurance Companies in U.S.

Written by Michele Wilmonen. Posted in Research Last Updated: 12/29/2014

Every year insurance companies are ranked by outside sources to provide you with information to make an informed choice in which are the best insurance companies to do business with.

Ratings for the Best Insurance Companies

Using research and consumer opinion brings the best insurance companies to you in an easy list.

Which are the best insurance companies to purchase car insurance from?

This is a question that is wondered by all drivers. Everyone wants the lowest priced premium that has the best customer service and claims process. But, you can’t trust the advertising from the insurance companies so how do you know which are the best insurance companies?

Here at Car Insurance Guidebook we have collected the rankings of the best insurance companies (and the worst car insurance companies) for you to view and make a decision for yourself. These are nationwide lists of the best insurance companies so keep in mind you may not have heard of the ones that don’t write insurance in your area.

Fortune 500 – 2011 Best Insurance Companies

Let’s start with the best insurance companies that are making the most money.  The rankings of these top 10 best insurance companies on the Fortune 500 list are more based off information that a business person or an investor would be interested in. They are not based off anything that we as insurance consumers look for in our best insurance companies such as premium, customer service or claims services.

However, as an insurance consumer, going with an insurance company that is a solid company all around does protect us. It protects us from paying a large amount of premium to a company that may not be around to pay our claims if that time ever comes.

The following listing is the rankings of the best insurance companies in the “Insurance: Property and Casualty” category.  The numbers listed after is their ranking on the complete Fortune 500 list with all of the business categories combined.

  1. Berkshire Hathaway (7)
  2. AIG (17)
  3. State Farm (37)
  4. Liberty Mutual (82)
  5. Allstate (89)
  6. Travelers Cos (106)
  7. Hartford Financial (117)
  8. Nationwide (127)
  9. United Services Automobile Association (145)
  10. Progressive (164)

Top 3 Insurance Company Mascots

Company identification is very important in the insurance industry.  The better known an insurance company is the more likely people are going to seek them out for an insurance quote.  More insurance quotes lead to more business.

Insurance mascots can help an insurance company achieve this recognition. The mascot helps by making the insurance company that they represent stick in a potential client’s mind. So every time a consumer sees the mascot, they think of the insurance company. To test part of this advertising gimmick, a TV study was done to see the effectiveness of insurance advertising on consumers.

When study participants were provided with insurance TV ads these were the top three most recognized insurance company mascots:

  1. The GEICO Gecko (Geico is a subsidiary of Berkshire Hathaway)
  2. Flo from Progressive
  3. Allstate’s Mayhem

If you will notice the companies of all three of the most recognized insurance company mascots are listed above in the Fortune 500 best insurance companies list.

Best Insurance Companies for Customer Service

Customer service is essential in the insurance industry. If you treat your customers rudely and do not try to be flexible to their needs, there is very little keeping them from leaving for another company.

Each year awards the best insurance companies that exceed customer service expectations for their clients.  The following is a list of the 2011 Customer Service Champions for the best insurance companies in the industry:

(A full listing of all the best insurance companies that earned the Customer Service Champions award can be found at www.

Best Insurance Companies for Claims Service

The whole essence of insurance is the claims department. Insurance is a promise that is made by the best insurance companies to you that they will pay your claims for the coverage that you buy. If an insurance company does not hold up their end of the promise, they are not an insurance company that is worth paying premium to.

Below is the list of the best insurance companies for claims service from JD Power’s 2010 Auto Claims Satisfaction Survey:

  1. Auto-Owners Insurance
  2. American Family*
  3. Amica Mutual*
  4. California State Automobile Association (CSAA)*
  5. Erie Insurance*
  6. The Hartford*

*Numbers 2 – 6 all tied for 2nd best “Overall Satisfaction” rating for Claims Satisfaction.  These companies all earned a 4 out of 5 ranking on the study.

Worst Insurance Companies Based on Claims Service

An insurance company that is rated poorly on claims service is a lot of times a combination of bad customer service and also a claims department that clients just don’t think is keeping their claims promise to them. In JD Power’s 2010 Auto Claims Satisfaction study there was no one company that stood out as the worst in the rankings.

These insurance companies on the Auto Claims Satisfaction study were rated on: First Notice of Loss, Service Interaction, Appraisal, Repair Process, Rental Experience and Settlement.

In “Overall Satisfaction” these companies tied at the bottom of the list only earning a 2 out of a possible 5.  In alphabetical order, the following three companies graced the bottom of the list:

  • 21st Century
  • Commerce
  • Mercury

So there you have it, the best insurance companies and the worst in the insurance industry as ranked by businesses and consumers like you.

When Do I Get My Money After I Cancel My Policy?

Written by Michele Wilmonen. Posted in Ask An Insurance Question Last Updated: 08/04/2011

Getting an insurance refund of your unearned premium from the insurance company should happen automatically when you cancel your policy, here’s what to do if it doesn’t.

Company and Insured Fighting Over Refund

If the insurance company won't send your refund, it may be time to contact your insurance commissioner.

When you cancel your policy with an insurance company, you may be due an insurance refund of the unearned premium. Unearned premium is simply the amount of premium that you have already paid to the insurance company that they have not “earned” yet. The insurance company earns the premium you paid by providing insurance coverage to you for a period of time.

For example, if you paid insurance premium for 30 days and you cancel your policy on day 20, there is 10 days’ worth of unearned premium that should be refunded to you.

Find the Status of your Refund

If you feel that there is unearned premium left on your cancelled insurance policy, contact your insurance company directly or talk to your agent about an insurance refund. If they admit that they do owe you a refund, demand (nicely) where it is.

If you are told that it was already mailed, ask the exact date that it mailed. If it has been a while, advise them that you want a new refund check sent or you want a copy of the cashed check provided to you.

Contact the Insurance Commissioner

If both the insurance company and your agent are saying that you are not owed a refund, make them prove it. It is your money and your policy and you have the right to know what your money went to.

Make them provide you with a billing breakdown of how much they charged you daily for insurance. This breakdown should also have how many days the premium you already paid to them covered.

If they refuse to provide this or to issue you a refund, contact your state’s Department of Insurance or Insurance Commissioner’s office. These are the governing insurance entities in your state and the best place to file a complaint with.

LSVI Accidents: An Automatic Fraud Flag

Written by Michele Wilmonen. Posted in Research Last Updated: 07/24/2011

An accident is categorized as an LSVI when the injuries are more serious than the damages to the vehicles, leading the insurance company to think fraud.

A Lady wih a Potential LSVI Fraudulant Claim

The history of exaggerated and fake injuries with an LSVI is why the fraud department is automatically notified when these types of claims are reported.

There are just some insurance claims that make an insurance employee immediately think of one word – fraud. Claims where the person’s vehicle was found at the bottom of a lake, but there was no police report that it was stolen and the insured claims not to know how it got there, brings the fraud word to mind. Injuries for multiple people in a small car all treated by the same doctor for an accident that has no police report or other party involved also begs for the fraud word. Out of all the possible fraudulent claims though, the one that is the most frequently reported is the LSVI accident.

What is an LSVI?

A LSVI is just the insurance industries internal word for Low Speed Vehicle Incidents.  These are accidents that happen at a low rate of speed and there is hardly or any damage to the vehicles that were involved in the accident. What automatically flags these types of accidents for the fraud department is not what happened in the accident itself, but the result.

With these accidents, people claim to have serious injuries that should not be seen with this type of accident. Injuries such as: sprains, pulls, strains and soft tissue injuries. Whiplash being the most common of these injuries that are claimed. Conveniently, these types of injuries cannot be recorded with a machine by any doctor, like a broken bone or other serious injury can. Meaning that there is no evidence other than what the person is complaining about to the doctor and the doctor’s diagnosis from an exam and taking the patients word for it.

Are All LSVIs Fraud?

No, not all LSVI accidents are fraud. There are some very legitimate injuries that can happen as a result of an LSVI accident. The limited damages to the vehicles may be a result of a well-made car or the way that the vehicles hit each other. Injuries can also happen very easily to people that are fragile, already have injuries that were just exacerbated by the accident or to minor children and the elderly.

Are LSVI Fraud Criminals Stopped?

Yes, some LSVI fraud claims are caught by fraud investigators before any money is paid out to the people trying to collect on the claim. Then the wheels are set in motion to charge them with insurance fraud. Catching people in a fraudulent claim early is the result of vigilant claim CSRs and claim adjusters that have worked on the case.

However, there are times when the claim is paid out before catching the fraud. In cases like these the insurance company then goes after the criminal through legal recourse to get their money back and to file charges. Other times, the fraud is not caught or the insurance company is not able to find enough evidence to accuse the person of fraud. In cases, like these, the criminals get away with committing fraud through a LSVI.

Driver’s Safety Courses

Written by Todd Clay. Posted in Definitions Last Updated: 10/21/2011

Known as many different names, driver’s safety courses help drivers learn to be safer behind the wheel and can offer some money saving perks as well.

An Off Ramp to a Driver’s safety courses

Sometimes drivers need to take the exit off the main road into a driver's safety course.

Driver’s Safety courses, also known as defensive driving courses or traffic school, help drivers who may have forgotten the safe way to operate a vehicle. These courses are designed as a quick update of driver laws and techniques for the driver. They can be mandatory for bad drivers and voluntary for older drivers just looking for a car insurance discount.

Driver’s Safety Course Education

Basically  driver’s safety courses are a very summarized version of Driver’s Ed. Most courses are only for about 8 hours and can be broken up into a handful of small sessions or one full Saturday session.

What you will learn in your driver’s safety courses:

  • Accident Avoidance Techniques
  • Proper Lane Changing
  • Stopping at Red Lights
  • New Driving Laws for Your State
  • Safety Restraints
  • Post-Accident Tips
  • Speeding Laws

These are just some of the subjects that your driving school instructor may go over. The final subject matter will depend on the state that you live in. They will present the information to you in the form of lectures, worksheets, and reading material.

If you are lucky there will be a comedy driver’s safety course for you to take in your area. This new form of traffic school offers everything that the regular course does, but is presented in a comedic fashion by the instructor.

The Perks of Driver’s Safety Courses

Driver’s safety courses not only make you a safer driver (yes, this is a perk), it also helps to decrease your insurance premium. If you have tickets and accidents on your driving record, this course could decrease the number of points that are charged on your record for these violations. The lower amount of points means that the insurance company won’t charge you so much for your premium.

Back to the becoming a safer driver. Safer drivers enjoy the perks of not having accident and ticket surcharges on their insurance policies. This means that they are paying less for the same insurance coverage that you have. By paying attention in this class and driving safer than you have been, after your tickets and accidents have fallen off your record, you also can enjoy this low premium perk.

Eligible driver’s safety courses can also add a discount to your insurance policy if you are an older driver. This discount will help to decrease the premium that the insurance company is charging you for your age. The driving classes for older drivers have nothing to do with traffic school and are not because of tickets or accidents.

Locations of Driver’s Safety Courses

The locations of driver’s safety courses vary by your state and even by the area of the state that you live in. In some states you can take your driver’s safety course online from the convenience of your home. To find out when and where the driver’s safety courses in your area are offered, contact your local Department of Motor Vehicles or local police department. You can also check online for the driver’s safety courses near you.

If your driving record is bad enough, the authorities will tell you where to go; you won’t have to ask. This is because your driver’s safety courses will be mandatory.

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Car Insurance Guidebook Unravels the Car Insurance Mystery

Unless you work in the car insurance industry, the topic is probably a mystery to you. The words deductible, comprehensive, collision, liability, premium, loss of use and bodily injury are all gibberish when they reach your ears.

Unfortunately, insurance is something that you are required to have by law if you want to drive. Because of how confusing it is many people go around in almost an insurance daze while they get car insurance quotes from the auto insurance companies that they have heard of. In reality, they are completely lost as to what they are actually buying.

Instead of looking at what each insurance company offers in the terms of protection for both themselves and their car, they are instead looking for cheap car insurance. Finding the cheapest car insurance coverage makes having to buy the required product all that much less painful, but misses the whole point of having insurance.

Learning about insurance through your insurance agent or websites like Car Insurance Guidebook will give you the upper hand when you looking for car insurance. You can take your knowledge and not only find the best price for insurance, you can use it to find really great insurance to protect you and your assets. Then you aren’t stuck settling for just average car insurance that can hurt you financially if you ever need it because there isn’t enough protection.

For example, when looking for insurance the car insurance rates are just the first of many factors that need to be taken into account when you are shopping around for car insurance. You also need to take into account the type of vehicle that you are driving. Many people don’t know this.

Are you driving around a vehicle that is a new sedan and can be protected under any blanket insurance policy? Or do you have an old car that you fixed up that needs special protection and could be better covered under classic car insurance?

Don’t just assume that when you compare car insurance that it will be a one-size-fits-all policy. This is where the insurance knowledge will come in handy; you will know what you need to protect yourself and your vehicle.

You will understand what your insurance agent is talking about when they use insurance terms and you will actually be able to make an informed decision. This is much better for you instead of the “nod and smile” approach people take in their insurance agent’s office.

Also just like your life changes your insurance needs will change. This year you may just need to learn about the best deductible to have. Next year you may need to educate yourself on car insurance for young drivers. As the years pass, motorcycle insurance may be something you will need to know.

Many wise people say that you never stop learning, so take their advice and educate yourself on the insurance that you spend a lot of money on and can’t get away with not having.